In the world of finance, gatekeepers such as lawyers, notaries, accountants, auditors, tax advisers, real estate agents and company-service providers are meant to safeguard against financial crime. Yet, these very players can sometimes become unwitting””or even complicit””partners in money laundering schemes. The expertise that makes these professionals indispensable to businesses also provide opportunities for criminals to exploit them for illicit activities.
In this article we will discuss how these intermediaries can be used to launder illegal funds, the legislation regarding gatekeepers and AML, and real-life examples of how they were used for money laundering.
What is a gatekeeper ?
A gatekeeper is a person or entity that controls access to something, often acting as a barrier or filter between different parties. In various contexts, gatekeepers have the authority or responsibility to regulate, manage, or monitor entry, participation, or flow of information or resources.
In the financial and legal context, gatekeepers refer to professionals like accountants, lawyers, bankers, auditors, and other experts who are responsible for ensuring the integrity and legality of financial transactions and activities.
What are the tasks of gatekeepers in AML ?
The role of a gatekeeper in the fight against money laundering involves a continuous duty of vigilance throughout the entire business relationship, encompassing numerous obligations, including:
1. Know Your Customer (KYC): Thoroughly understanding the client's identity and background. This is typically done when onboarding new clients to ensure that their activities align with legal and ethical standards.
2. Know Your Transaction (KYT): Monitoring and understanding the nature of the client's transactions. KYT helps identify suspicious or unusual transaction patterns that may indicate illicit activity, such as money laundering, by flagging inconsistencies with expected behavior.
3. Checking the Origin of Assets: Ensuring that the assets involved in transactions are derived from legitimate sources. It becomes particularly critical when a client's transactions or asset transfers are abnormal or do not align with their financial history.
4. Risk-Based Approach: Implementing measures based on the risk level associated with each client and transaction. Clients or transactions deemed higher-risk, such as those involving high-value transfers or politically exposed persons (PEPs), undergo enhanced due diligence (EDD), while lower-risk clients may face less stringent controls.
5. Complying with Financial Embargoes: Adhering to legal restrictions on financial transactions with certain entities or countries. Compliance is essential to avoid penalties and to prevent the facilitation of illicit transactions.
6. Restricting the Use of Cash: Limiting cash transactions is a critical measure in the fight against money laundering, as cash is difficult to trace and is commonly used in illicit activities.
7. Reporting Obligations: Designated professionals are legally required to report any suspicious activity that may indicate money laundering or other financial crimes to the relevant authorities, such as the local Financial Intelligence Unit (FIU).
8. Ongoing Compliance and Adaptation: Gatekeepers must stay up-to-date on best practices, revising internal protocols, and ensuring that they are well-trained in recognizing and addressing risks related to money laundering and financial crime.
How are gatekeepers used for money laundering ?
Gatekeepers are used in various ways to help conduct money laundering on behalf of criminals. Below are a few examples: Role of Legal Professionals Setting Up Shell Companies: Lawyers are often used to create shell companies and complex corporate structures that conceal the ownership and origin of funds. Lawyers may design multi-layered corporate structures with entities in various jurisdictions, making it difficult for authorities to trace the flow of money or identify the true owners.
Real Estate Transactions: Lawyers play a pivotal role in organizing real estate transactions, managing contracts, and ensuring compliance with legal and regulatory requirements. Criminals often exploit this by purchasing high-value properties with laundered money, which allows them to integrate these illicit funds into the legitimate economy.
Role of Accountants and Auditors Financial Statement Manipulation: Accountants may engage in fraudulent activities by falsifying financial records to obscure the true nature of funds. They can inflate revenue figures by creating fake sales transactions, issuing phony invoices, or recording non-existent sales to misrepresent a company's financial health. Additionally, they may manipulate revenue streams by fabricating income from non-existent products or services.
Tax Evasion Schemes: Accountants may engage in practices such as fabricating expenses and underreporting income to create a misleading financial profile. This manipulation not only reduces tax liabilities but also contributes to a complex layering structure that makes it increasingly difficult to trace the true source of the funds.
The same pattern applies to notaries, tax advisers and company-service providers: forming structures, opening accounts, nominee mandates and property files. Article 3 AMLR brings them into scope once they assist those acts. See real estate as a typology and company KYC.
What are examples of gatekeepers being used for money laundering ?
In Canada, several lawyers have been implicated in money laundering or suspicious financial activities, highlighting their unintended or deliberate roles in facilitating criminal operations. Prominent cases include:
Simon Rosenfeld, a Toronto lawyer who was convicted in 2005 after boasting to an undercover officer about Canada's lax money laundering enforcement. His sentence was increased upon appeal.
Florence Yen, a Vancouver real estate lawyer, who was suspended for three months in 2021 for handling over $14 million from a client without providing legal services or investigating the funds' origins.
Ronald Pelletier, disbarred in 2023, was found to have moved $31 million for clients involved in U.S. securities fraud, using burner phones to obscure his activities.
In Europe, a well-known case of lawyers enabling money laundering is the Danske Bank scandal in 2018. This scandal exposed the role of professionals, including lawyers, in facilitating the laundering of approximately €200 billion of suspicious funds through the bank's Estonian branch between 2007 and 2015. The lawyers abused Estonia's lenient regulatory control and created shell companies with complex corporate structures that involved cross-border transactions.
The AMLR and gatekeepers: what changes on 10 July 2027
The Regulation (EU) 2024/1624 (AMLR), adopted on 31 May 2024, applies from 10 July 2027. It is a regulation, directly applicable, not a directive to transpose. The 4th, 5th and 6th AML directives give way to this single rulebook, completed by Directive (EU) 2024/1640 (AMLD6) and Regulation (EU) 2024/1620 (AMLA, seated in Frankfurt, with direct supervision of selected entities). Football clubs and agents stay on a separate date (10 July 2029). See the AML package / AMLR and the EU AML directives.
Article 3 AMLR lists the gatekeeper obliged entities: auditors, external accountants, tax advisers; notaries, lawyers and other legal professionals when they assist a financial or real-estate transaction or its planning; trust and company-service providers; real-estate agents (lettings from EUR 10,000/month); dealers in precious metals, stones and high-value goods; crowdfunding service providers; investment-migration operators. Charities are not listed as such in Article 3.
AMLR duties include an enterprise-wide risk assessment, a compliance officer, CDD/EDD (including company KYC and adverse media), suspicious-transaction reporting to the FIU, five-year record keeping, and retained responsibility if work is outsourced. Until 10 July 2027, national transpositions of the 4th and 5th directives still bind these professions; the AMLR then overlays a single, directly applicable rulebook. For the training layer, see AML learning and AML fundamentals.
In practice, a law firm, notary or accountant that designs a multi-jurisdiction holding, opens accounts or intermediates a property deal is already in the same risk channel as a bank onboarding that structure. The difference after 2027 is that the AMLR states that duty in one text, with the same CDD logic, rather than a patchwork of national transpositions. Firms that only « referred the client to a bank » will still need a file: who the client is, why the transaction exists, and whether the ownership story holds.
What is the AML regulation for gatekeepers?
Until 2027, the transposed AML directives remain the national baseline: risk assessment, customer due diligence and reporting. Gatekeepers also remain key to accurate ownership records that competent authorities and obliged entities with a legitimate interest can access. That baseline is absorbed, then harmonised, by the AMLR.
In the United States, the Bank Secrecy Act (BSA) requires an AML programme, CDD, Suspicious Activity Reports (SARs) and a Currency Transaction Report (CTR) for cash over USD 10,000 in a single day. The Gatekeeper Initiative targets professions that open access to the financial system.
In its FATF 2024 Horizontal Review of gatekeepers' technical compliance related to corruption, the FATF noted that many members scored above 80% on the relevant recommendations, while seven major economies (over half of global GDP) scored below 50%. Customer due diligence remains the weak point. See also PEPs and real estate.
Keeping a check and balance on gatekeepers is necessary
Gatekeepers are critical to the financial system; the same expertise can be used to integrate, layer and legitimise illicit funds. That is why AML duties (KYC, transaction monitoring, suspicious-activity reporting) must keep them a barrier rather than a conduit.
Preventing that misuse needs enforcement, internal controls and oversight. That is the point of the AMLR on 10 July 2027: one directly applicable regime for the Article 3 professions.
