Click to edit Master title style

A COMPREHENSIVE REVIEW OF
THE RULES OF PROFESSIONAL
CONDUCT 2023

1
Click to edit Master title style
INTRODUCTION

The new Rules of Professional Conduct 2023 were made by the General
Council of the Bar aka Bar Council in exercise of the powers conferred on it by
section 12(4) of the Legal Practitioners Act (LPA) and it was made to maintain
a high standard of conduct, etiquette and discipline amongst legal practitioners
in Nigeria.
The new rules revoked or repealed the former Rules of Professional Conduct
2007, and this revocation shall become effective on 31 st December 2023 hence
the new Rules shall become effective on 1 st January 2024. The new rules
comprise of 78 rules which are arranged into 3 chapters.
 Chapter one deals with rules of conduct for legal practitioners.
 Chapter two deals with guidelines and rules on anti-money laundering and
combating the financing of terrorism for legal practitioners.
 Chapter three deals with Miscellaneous provisions.

2 2
 Click to edit Master title style

The provisions of rule 1- rule 54 under chapter one of the new rules are basically as those in the Rules of Professional
Conduct 2007. However, it is important to note that the provisions of rule 48(2) of the new Rules provides that any fee for
service rendered by a legal practitioner shall not be in violation of the Renumeration Order while the old Rules only state
that a Lawyer shall not enter into an agreement for charge or collect an illegal or clearly excessive fee.
Chapter two of the new Rules provides for guidelines and rules on Anti-Money Laundering and combating the
Financing of Terrorism for legal practitioners and this chapter as stated in rule 55 seeks to;
a. Promote adherence to the rule of law.
b. Promote the duty of confidentiality and the client-lawyer privilege toward their clients, and provide yardsticks for the
overall ethics and best practices of the profession to ensure that legal services are no being misused by criminals or for
legal practitioners to be unwittingly involved in Money Laundering and Terrorism Financing
c. Internally self -regulate members of the legal profession and where applicable, recommend legal practitioners who are
in breach to appropriate disciplinary authorities in accordance with relevant provisions of the legal Practitioners Act,
and
d. Adopt the risk -based approach for legal practitioners to be able to identify Money Laundering, Terrorism Financing
and proliferation financing situations and circumstances before the occur and thus provide ethical and professional
advice to clients when it becomes necessary while providing professional services as a legal practitioner.
3 3
 Click to edit Master title style

The rules in chapter two of the new rules apply to all legal practitioners whose names appear on the roll and
particularly as described in sec 2 of the LPA.
The reporting and compliance obligations of a legal practitioner under these guidelines arise when conducting sales or
purchase of real estate for clients or providing advisory services to clients in a real estate transaction. These obligations
also arise when acting as a formation agent of legal persons, acting as or arranging for another person to act as a
director or secretary of a company, partner of a partnership, nominee shareholders for another person, trustees of an
express trust or when providing a registered office for a company, a partnership or any other legal arrangement (R57).
And where a legal practitioner fails to comply with the provisions of chapter two of the new rules while rendering the
services stated in above, that legal practitioner is said to have committed professional misconduct and will be liable to
disciplinary proceedings. However, the obligation stated above does not apply to a legal practitioner who is merely
providing notary services or certifying the authenticity of instruments not primarily prepared by him. The New Rules
mandate a legal practitioner to conduct an internal risk assessment to understand, identify, assess, and mitigate the
risk of money laundering, terrorism financing, and proliferation financing when providing any of the professional
services listed above.

4 4
 Click to edit Master title style

Legal practitioners are also now obligated to maintain an up-to-date record of the necessary information about their
clients that will aid the identification of their clients and to keep or process such information in accordance with
relevant data protection and client professional privilege laws and Rules applicable in Nigeria. Legal practitioners are
to ensure that the information collated from their clients is kept up to date by undertaking regular reviews of existing
records and these records shall be kept for a minimum period of five years. Legal practitioners shall also keep
necessary records of transaction with both domestic and international clients for a minimum period of five years
following the completion of the transaction and such records must be kept and preserved regardless of whether the
transaction or relationship is terminated or ongoing. This may pose a challenge in terms of storage, retrieval and it
might also be cost intensive.
Under rule 60 of the new rules, there are laid down obligations for a legal practitioner to implement Targeted Financial
Sanction related to Terrorism.
There are steps listed in rule 60(4,5) to be adopted by legal practitioners and law firms to minimize money laundering
and terrorism financing risks on every transaction they are instructed to carry out by clients.

5 5
 Click to edit Master title style

Legal practitioners must actively assess and comprehend the risks of money laundering, terrorism financing, and
proliferation financing in each transaction. They should implement reasonable measures to mitigate these risks,
including understanding sector-specific risks related to their services and clients. Internal policies, procedures, and
employee training programs like workshops are crucial for maintaining high standards amongst legal practitioners and
law firms. To minimize risks, practitioners must identify and verify client identities, understand the source of funds, and
grasp the nature of the provided service. Legal practitioners should comprehend the rationale behind the
work they undertake to identify money laundering risks and terrorism financing and if need be, seeking expert assistance
is advised when lacking expertise. Implementing targeted financial sanctions and conducting thorough risk assessments
for cross-border transactions may be resource-intensive and require additional expertise.

The Rules also provide that legal practitioners or law firms involved in cross-border transactions must conduct thorough
risk assessments related to geographic or country-specific risks. Geographic risks for money laundering (ML) and
terrorist financing (TF) may stem from factors like client domicile, transaction location, or the source of wealth or funds.
Higher risk countries may be identified by credible sources for supporting terrorism, having organized crime,
corruption, or weak governance and regulatory regimes. Sanctioned countries also pose elevated risks. Legal
practitioners fulfill their obligation by demonstrating, through compliance documents, their review and understanding of
the country or geographic risks in their engagement with clients.
6 6
 Click to edit Master title style

Law firms and legal practitioners must establish internal measures to ensure the accurate identification and
verification of each client's identity. This includes determining and verifying the identity of beneficial owners. The
procedures to identify and verify a client involve various steps such as meeting clients, document verification, and
obtaining detailed information for legal entities. Customer Due Diligence (CDD) is necessary, and risk assessments
should be well-documented and regularly reviewed. Compliance documents and client affidavits are essential for
demonstrating the understanding of risks assessment. If unable to meet CDD requirements, legal practitioners should
consider terminating the business relationship and reporting suspicious transactions to the relevant authorities.
Legal practitioners or law firms are obligated to establish a clear system outlining the requirements for filing
Suspicious Transaction Reports (STRs) to the NBAAMLC, which then forwards them to the Nigerian Financial
Intelligence Unit (NFIU). Where a legal practitioner fails or neglects to comply with the provisions of Chapter two of
the Rules, such a legal practitioner will be deemed to have committed professional misconduct and will be liable to
disciplinary proceedings in accordance with the Legal Practitioners Act.

7 7
 Click to edit Master title style

The remainder of the rules went ahead to state obligations on legal practitioners and law firms to ensure that money
Laundering and Terrorism Financing is completely erased.
Chapter three of the Rules provides that the NBA has the authority to establish a special committee known as the
Nigerian Bar Association Anti-Money Laundering Committee (NBAAMLC). This committee is tasked with advising
the NBA on rule implementation and overseeing firms or legal practitioners' adherence to the New Rules. The
NBAAMLC takes the lead in recognizing money laundering and terrorism financing risks, understanding the legal
sector's nuances, evaluating controls and procedures, and periodically publishing its findings. Additionally, the
NBAAMLC is responsible for formulating policies and procedures to identify legal practitioners or specific groups at a
higher risk of being exploited by criminals for money laundering or terrorism financing, and communicating these
findings to the NBA, among other responsibilities and recommending disciplinary proceedings in relation to chapter
two of the Rules to the Legal Practitioners Disciplinary Committee.

8 8
 Click to edit Master title style

CHALLENGES
Some of the challenges legal practitioners and law firms may encounter includes.
Client Cooperation: Obtaining necessary information from clients for risk assessments and due diligence may pose
challenges, particularly if clients are unwilling to disclose certain details or if the information is not readily available.
Resource Constraints: Smaller law firms or individual practitioners might face resource constraints in implementing
and maintaining the extensive measures required by the Rules, potentially leading to compliance difficulties.
Stringent Record-Keeping: The requirement for legal practitioners to maintain up-to-date records for a minimum of
five years could pose challenges in terms of storage, retrieval, and it might also be cost intensive.
Thorough Risk Assessment: Implementing targeted financial sanctions and conducting thorough risk assessments for
cross-border transactions may be resource-intensive and require additional expertise.

9 9
 Click to edit Master title style

CONCLUSION
The new rules, enacted by the Bar Council, focus on upholding professional standards, combatting money laundering,
and preventing terrorism financing. These rules cover Professional conduct, AML/CFT guidelines, and miscellaneous
provisions across three chapters. Notable additions include Rule 48(2) emphasizing compliance with the Remuneration
Order. These rules play a pivotal role in upholding the integrity of legal services, contributing to a trustworthy legal
environment in Nigeria and it will take effect by 1st January 2024.

1010
Click to edit Master title style

Thank You

11