KOROR, Palau – The Palau Bar Association (PBA) is urging lawmakers to exempt attorneys from stringent anti-money laundering (AML) screening and reporting requirements, arguing they conflict with client confidentiality obligations and could stifle investment.
In a letter to the speaker of the House of Delegates, the PBA expressed concerns that the requirements under the Money Laundering and Proceeds of Crime Act create ethical dilemmas for lawyers bound by client confidentiality. They pointed out that the U.S., recognizing the importance of this principle in Palau’s legal system, has opted out of applying similar AML rules to the island nation.
The PBA also raised economic concerns, arguing that the compliance costs associated with AML reporting would translate to higher legal fees, potentially deterring investment in Palau. They emphasized that despite the absence of AML regulations, they have implemented adequate safeguards to prevent money laundering within their practices, citing a lack of encountered suspicious activity.
With a March 1 deadline looming for attorneys to submit AML compliance policies to the Financial Intelligence Unit (FIU), the PBA urged the Olbiil Era Kelulau (OEK) for swift action on their proposed legislation.