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May 31, 2019
OECD and International Bar Association report proposes global conduct guidelines for lawyers working on commercial structures
On 20 May 2019, the Organisation for Economic Co-operation and Development (OECD) and the International Bar Association (IBA) co-published a report1 (the report) laying out a set of eight principles that they recommend for governing lawyers and law firms engaged in or undertaking work associated with commercial structures, particularly those of an international character.
The report is the work product of the Task Force on the Role of Lawyers and International Commercial Structures (the Task Force), a collaboration of the IBA and the Secretariat of the OECD. The Task Force, formed following release of the Panama Papers and the Paradise Papers, focused on developing general principles of conduct for lawyers and related recommendations for governments in policy formation.
The report does not duplicate existing international or domestic guidelines for the legal profession with respect to how a lawyer should act or not act in certain circumstances. Rather, the report lays out high-level principles that are intended to assist governments in policy formulation and to guide lawyers as to how they should conduct themselves, consistent with the underlying domestic legal and ethical obligations. Additionally, the report covers anti-money laundering and counterterrorism financing laws, obligations and disclosure duties that exist in many countries.
The Task Force recommends the eight principles laid out in the report to national bar associations and law societies, encouraging them to adopt the principles and also to engage with their governments on how the principles can help in administering justice and upholding the rule of law.
The Task Force also advocates that where the principles are adopted and reflected in domestic law or professional regulations, violations of them should result in proportionate disciplinary measures. As stated in the report, these measures should include, where appropriate, disbarment, which should also be recognized in foreign jurisdictions.
The eight principles in the report are summarized as follows:
The report also includes discussion of the rationale underlying these principles.
Given that commercial structuring is a common activity of a multinational company’s tax department, companies should be aware of this report and the principles laid out in it. If the bar association in a jurisdiction that is relevant to a company chooses to adopt the principles, they could have implications for the company’s relationship with both its in-house lawyers and its outside lawyers. Multinational companies also may wish to consider whether to incorporate the principles in their internal policies, including their policies with respect to global tax strategy, tax control framework, and corporate social responsibility strategy.
For additional information with respect to this Alert, please contact the following:
Ernst & Young Law GmbH Rechtsanwaltsgesellschaft Steuerberatungsgesellschaft (Germany), Berlin
HVG Law LLP (The Netherlands), Rotterdam
Ernst & Young LLP (United Kingdom), London
Ernst & Young LLP (United States), Washington, DC