Legal Professional Privilege

The Anti-Money Laundering Regulation (AMLR) does not define legal professional privilege. It writes its own exemptions into specific duties. The recitals give the reason: information obtained before, during or after judicial proceedings, or while ascertaining a client's legal position, is covered by legal privilege, so legal advice should stay subject to professional secrecy.

This leaves two layers. Privilege itself comes from national law and from the rules of each profession. The AMLR sits on top. It applies in the same words in every member state and names the anti-money laundering duties that give way, subject to options it leaves to member states.

Under Article 3(3)(b) notaries and lawyers are obliged entities when they act for a client in a financial or real estate transaction, or help plan or carry out listed transactions. Article 3(3)(a) adds legal professionals whose principal business or professional activity is advice on tax matters. A lawyer who does neither, and only defends a client in court, is outside the AMLR for that work. The exemptions matter for mixed work, where advice and a transaction sit in one file.

It covers information obtained in two activities: ascertaining the legal position of a client, and defending or representing the client in, or concerning, judicial proceedings. Advice on starting or avoiding proceedings is included. Under Article 70(2) it makes no difference whether the information is received before, during or after the proceedings.

For that information the professional is exempt from Article 69(1), which holds both the duty to report suspicions and the duty to answer requests from the financial intelligence unit. Article 21(4) of Directive (EU) 2024/1640 says the same from the unit's side: a firm is not obliged to comply with a request that concerns such information.

Two more provisions carry a matching exemption. Article 21(2) concerns a firm that cannot complete customer due diligence. The usual rule is to refuse the transaction, end the relationship and consider a report. That rule does not apply to the extent the professional is ascertaining the client's legal position or representing the client in proceedings. Article 24(4) lifts the duty to report discrepancies in beneficial ownership registers for information obtained in the same way.

Lawyers are not the only ones covered. The same articles name notaries, other independent legal professionals, auditors, external accountants and tax advisors.

In three situations set out in Article 70(2), and in any further ones a member state adds. The exemption does not apply where the professional:

• takes part in money laundering, its predicate offences or terrorist financing;
• provides legal advice for the purposes of money laundering, its predicate offences or terrorist financing; or
• knows that the client is seeking legal advice for those purposes.

Knowledge or purpose may be inferred from objective factual circumstances. Articles 21(2) and 24(4) carry the same three exceptions. The recitals add a limit in the other direction: legal advice sought in relation to ongoing judicial proceedings is not to be treated as advice sought for the purposes of money laundering.

Member states may go further. Article 70(3) lets a member state decide that the exemption does not apply to types of transaction with higher risks, and add reporting duties for them. The recitals require such decisions to comply with Articles 7 and 47 of the Charter of Fundamental Rights, on respect for private life and on the right to an effective remedy and a fair trial.

Almost everything except report. The exemptions attach to particular duties and to particular information. They do not take the client, or the firm, out of the AMLR. The table shows which duties give way.

The record matters most where no report is made. Article 77(1) requires a record of each assessment of a possibly suspicious transaction, with the information considered and the result, whether or not a report followed.

Advising a client against a course of action stays open to the lawyer. Under Article 73(6) an attempt to dissuade a client from illegal activity is not a prohibited disclosure.

The financial intelligence unit, or a self-regulatory body where the member state has chosen that route. Article 70(1) lets a member state allow lawyers, notaries, auditors, external accountants and tax advisors to report to a designated self-regulatory body, such as a bar association. That body must forward the information to the financial intelligence unit promptly and unfiltered.

The recitals call this first-instance reporting an important safeguard for fundamental rights where lawyers are concerned, and refer to the case-law of the European Court of Human Rights.

A report made in good faith under Articles 69 and 70 does not breach professional secrecy. Under Article 72 such a disclosure is not a breach of any restriction on disclosure imposed by contract or by law, and creates no liability of any kind.