Chadbourne & Parke female law partners allege pay inequity in lawsuit

By all accounts, Mary T. Yelenick had a stellar career at Chadbourne & Parke, the New York law firm where she spent 35 years, rising to the position of chairwoman for the product liability practice.

She retired in December to words of praise from the firm.

But in March she joined a lawsuit brought by a colleague, Kerrie L. Campbell, that accused the firm of sex discrimination and pay inequity. Yelenick’s change of heart followed a letter.

Within weeks of Campbell’s lawsuit in August, Chadbourne circulated a letter disavowing its claims. Fourteen female partners signed the letter, which criticized the description of the firm as “patriarchal” and urged that the lawsuit be withdrawn.

Yelenick, 62, did not sign the letter, but after looking at a draft, she said in an interview, she “disagreed strongly because the letter contained inaccuracies, including the process that female partners could use to join any potential class or collective action that a court certifies.”

“My decades of experience,” she said, “has made me aware of the many ways – both overt and more subtle – in which both institutional structures and informal practices continue to work to impede the advancement, and discount the contributions, of women.”

The third female partner who joined the lawsuit is Jaroslawa Z. Johnson, an American lawyer who headed Chadbourne’s office in Kiev, Ukraine, for a decade. She remained in Kiev after the office closed in December 2014, and noted during her time there that firm data “showed that my revenue generation was higher than many male partners, but my compensation was much lower.”

“Male partners,” she said in an email, “who generated less revenue annually made much more than I did.”

She decided to join the lawsuit, she said, once she read Campbell’s complaint.

All three plaintiffs have maintained in legal papers that the firm’s female partners have been “systematically disparately underpaid, systematically shut out of firm leadership, demoted, de-equitized and terminated.” The class-action suit asks for $100-million [U.S.] for sex discrimination and pay inequity.

That is a description that Chadbourne is contesting. Its lawyer, Kathleen M. McKenna of the Proskauer Rose law firm, did not respond to a request for comment for this article. But the firm has argued in legal papers that each of the three women suing was paid differently because each had “unique experiences and roles” at the firm.

Chadbourne also maintains that the three were partners and thus were not covered by federal equal pay act protections.

The lawsuit and its public aftermath – including the firm’s cutoff of Campbell’s compensation and its vote to oust her from the partnership on the eve of Chadbourne’s merger with Norton Rose Fulbright – have spurred discussions about pay among women at other large law firms.

And it is not the only legal dispute to emerge over compensation for female partners.

In July, Traci M. Ribeiro, 46, a lawyer, sued Sedgwick, a San Francisco-based international litigation and business law firm, saying she was not promoted to full partner or paid commensurate with the amount of business she was bringing into the firm. The firm called her lawsuit, which depicted Sedgwick’s culture as clubby and paternalistic, a “self-serving” and “disingenuous” exercise in a legal filing to move the contentious dispute to arbitration.

And the firm, in the same legal papers, called Ribeiro, who was a top earner in Sedgwick’s insurance practice in its Chicago office, a “quisling” – a World War II-era term for a traitorous collaborator.

Last month, the firm came to terms with Ribeiro in arbitration. The outcome was confidential, and neither side is commenting.

A resolution may be rockier for Campbell’s lawsuit, which Chadbourne has publicly labeled a “national smear campaign” and a “cynical pursuit of a big and undeserved payday.”

For women who question the fairness in partnership compensation, the customary solution had been to quietly move to another firm. A number of female lawyers are arguing that the legal profession has had ample time to get used to women in its ranks and needs to be held accountable, either in court or in mediation or arbitration.

“Chadbourne ripped off the Band-Aid that a lot of firms put on pay disparities,” said David W. Sanford of Sanford Heisler Sharp, who represents Ribeiro as well as the plaintiffs in the Chadbourne case, and is counseling other practicing lawyers over challenging pay disparities.

Barely 20 per cent of women have reached firm partnership status despite the high number of women who are entry-level associates at many major firms. When they graduate from law school – where women are now just over half of students – women are paid in lockstep with male colleagues, but once they make partner, their compensation can be widely divergent from that of their male counterparts.

Female law partners on average earn about one-third, or about $300,000, less annually than their male colleagues, according to a survey of 2,100 partners at law firms nationwide released last fall by a legal search firm, Major, Lindsey & Africa. Over several years, that adds up quickly to $1-million or more in lost compensation for a female lawyer.

Chadbourne, like some other major firms, circulates charts with equity partner payment figures, which contain pay disparities that can seem glaring and inexplicable, the plaintiffs say.

“The matrix of factors was there,” Yelenick recalled, but “it just didn’t add up.”

In 2013, the base pay of Chadbourne’s male partners was, on average, 40 per cent more than that of their female colleagues, according to filings in the legal case. Last year, there was a 21 per cent difference between the firm’s male and female partners, according to the documents.


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SA firms fined R3.64m for unlicensed software

South African companies last year paid a total of R3.64 million in fines for using unlicensed software.

This is according to a report from BSA – The Software Alliance, a non-profit, global trade association created to advance the goals of the software industry and its hardware partners.

This figure includes fine settlements (R1.66 million) and the cost of acquiring new software to become compliant (R1.98 million), notes the report.

In 2016, BSA says it received around 230 tip-off reports in SA, alleging the use of unlicensed software products of BSA member companies. Most of these reports came via BSA’s No Piracy portal from current or former employees, detailing the amount of software installed without the appropriate licence coverage.

“Software piracy negatively impacts software publishers and creates unfair competition for legitimate companies. But, more than that, it exposes organisations to legal, financial and reputational damage through security breaches and data loss, not to mention the negative economic impacts through job losses and lost tax revenue,” says Darren Olivier, partner at Adams & Adams, legal counsel for BSA.

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According to BSA, in one case, an architecture firm was found using unlicensed software of BSA members and is set to pay over R100 000 in damages. In another case, a telecommunications firm operating out of Midrand paid nearly R80 000 in damages for copyright infringement. Ultimately, both companies paid more to use unlicensed software than they would have paid if they had initially used legitimate licences.

“Often, IT departments are not even aware that staff have installed unlicensed software on their networks. This makes the business more vulnerable to cyber attack because unlicensed software is not patched with the latest security updates, which increases the likelihood of malware entering the network. Should that malware expose sensitive company and client information, the reputational damage could be massive and it will take a long time before the business can rebuild that trust with customers, if at all,” adds Olivier.

Mervin Miemoukanda, senior research analyst for software at research firm IDC, says BSA’sresearch findings are much in line with the scale of the use of illegal software products in the country.

“The scale of the use of illegal software products in SA is not that bad as compared to most countries on the continent. Counterfeit software products in SA are mainly used by consumers and small businesses and start-ups for financial reasons, as some of them cannot afford licence fees and maintenance support services. With the increased cyber attacks these past years, organisations using unlicensed software could also be victims of malware-induced cyber attacks,” explains Miemoukanda.

In terms of the regulatory compliance bodies, Miemoukanda adds, the Intellectual Property Bureau and the SAPS are the ones to enforce intellectual property laws in the country.

“The fines are determined by a court of law,” he points out.

Last year, the alliance reported 33% of installed software was not properly licensed in SA, representing a value of $274 million. Although a slight decrease from previous surveys, there is still “a need for increased awareness on the risks of installing and using pirated software”, says BSA.

“However, SA’s 33% figure still means the country is performing well compared to the rest of the Middle East and Africa region. The rate of unlicensed software use in the region is 57%,” the survey revealed.

To encourage compliance, the BSA Web site offers a reward of up to R100 000 to those who report piracy if the information provided results in a settlement.

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Companies squirm as tricky labor law revision on switching employment status closes in

The issue of whether to give nonregular workers permanent status has bedeviled companies and employees alike, especially with the end of a five-year waiting period on a labor law revision looming in less than a year.

The 2013 revision to the Labor Contracts Act requires companies to convert their nonregular employees — including part-time and temporary workers — to permanent ones if they have worked there for at least five years and opt for the change in status. That means companies need to plan ahead because the rule will take effect next April.

Some companies, especially small and midsize firms, have been dragging their feet because adding permanent employees makes it more difficult to implement layoffs.

“It’s not too late yet. Just begin your preparations,” Hiromi Morohoshi, a legal consultant on labor and social security, told a group of personnel and human resource representatives from 18 companies at a promotional event in Tokyo.

“It is important to make everybody in your company aware of the new rule. You must establish in-house procedures to prevent disputes with your employees,” Morohoshi said.

Organized by job placement agency Aidem Inc., the event was aimed at the many small and midsize firms that are struggling to develop a clear policy on the revision. Employers are concerned that hiring too many permanent workers will limit their flexibility.

“Many companies think of nonregular workers as ‘an adjustment valve’ in employment. They really don’t want to use the new system,” a Tokyo-based consultant on labor and social security said.

Some of them have even asked the consultant about potential loopholes and the risks of using them.

The revised law took effect on April 1, 2013, and the five-year waiting period stated in the new permanent status rule began the same day.

The Tohto consumers’ cooperative society launched preparations to convert its 326 nonregular workers desiring permanent status in March 2014. The decision was made amid concerns about the potential for sudden dismissal.

“It’s good thing that we can retain people who are already well-trained and skilled at their jobs,” an official of the co-op said.

The official said the co-op is considering giving the new permanent workers a raise and improving their labor conditions.

According to a recent survey by Aidem, roughly 80 percent of nonregular workers seeking permanent status are hoping they will get better wages or labor conditions.

But their optimism overlooks one apparent loophole: The revised law does not require employers to provide these benefits.

According to Morohoshi, a company can fulfill its legal obligation simply by changing an employee’s status and leaving the compensation and other labor conditions unchanged.

The Bank of Tokyo-Mitsubishi UFJ, for example, gave about 8,000 workers permanent contracts in April 2015. One worker in her 50s, however, complained that this brought her no new benefits and may have actually reduced her income.

“My pay is the same as when I was a contract worker and they don’t pay me a bonus,” said the woman, who works at a branch in Osaka. “They just changed my status to permanent.”

The woman feels dejected every time she sees regular workers rejoice at their bonuses on paydays because if she had remained a contract worker, she would have been able to demand a bonus under the government’s “equal pay for equal work” guideline.

According to the Labor, Health and Welfare Ministry, the guideline does not compel management to pay bonuses to permanent employees who were converted from nonregular status.

“This bank said permanent employment was a very good thing but I’ve discovered that’s not true in reality,” the woman said.

According to a March survey by Aidem, 85.7 percent of nonregular workers are unaware or little aware of the new rule.

The online survey, which covered 679 nonregular workers and 554 officials from various companies, found that only 14.3 percent understand the tricky rule in detail.

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Watchdog warns of reputational risk for firms  

That was the warning issued by Ireland’s Data Protection Commissioner, Helen Dixon at the INM Datasec conference in the RDS in Dublin last week.

In a keynote address, Ireland’s data watchdog provided 250 delegates with an update on the upcoming General Data Protection Regulation (GDPR).

“To do nothing ahead of May 2018 is not an option, because there will be consequences to pay – and the consequences will be very significant for any organisation, whether they are public or private,” said Dixon.

“The GDPR is a game-changing piece of regulation and cannot be ignored.

“Any loss of trust and confidence on the part of consumers in the digital economy will mean jobs and growth potential will fail to be realised,” she added.

Dixon said that European data protection regulators are acquiring massive new administrative fining capabilities under the GDPR (up to €20m or 4pc of global turnover of an undertaking in the case of certain infringements) in addition to powers to impose a variety of sanctions aimed at protecting this fundamental right.

“And, of course, it’s worth bearing in mind that the quantum of the administrative fee may not be the biggest hit a company takes when they contravene the legislation,” she said.

“It may be the publication of the fact of the fine and the reasons for it on the regulator’s website that causes the greater damage for a company in terms of reputational damage.”

Irish data protection law expert Emerald de Leeuw told delegates that Ireland will be at the centre of a legal battleground when it comes to international disputes over privacy law due to its status as European’s data centre hub.

De Leeuw also warned companies to be aware of their potential legal liabilities under the GDPR regime.

Dixon said the new regulatory regime will lead to an “enhanced right of civil action on the part of data subjects where they can pursue controllers and processors for compensation even where they haven’t suffered any financial loss”. “This change in the law under GDPR where distress or humiliation for example could ground an action by an individual is likely to lead to far greater direct pursuit of organisations by data subjects than we have seen heretofore,” she said, adding that the new regime had transformed her office.

“The GDPR is requiring a transformation in the size, skills, structure and powers of the Irish data protection authority, as it will in the case of most of the other European data protection regulators,” she said.

“The Government has recognised a need to fund a strong and independent regulator in Ireland and the budget of the office has quadrupled in the last three years.

“We’ve more than doubled our staff numbers in that time to over 65 staff with an additional 30 staff to be recruited in 2017 and we’ve moved to a new premises in the centre of Dublin.”

Other speakers at last week’s INM conference in the RDS, opened by Minister for Communications Denis Naughten, included cyber security strategist Joseph Carson, Mark Adair, partner at law firm Mason Hayes Curran, Daragh O’Brien, chief executive of Castlebridge and Alan Curley, privacy manager at Johnson & Johnson.

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Corrupt firms face five-year ban

COMPANIES found guilty of corrupt acts such as bribery, price-fixing or other illegal practices while bidding for government contracts could face a fine of N$5 million and/or a ban of up to five years, according to the new procurement regulations.

These penalties form part of the punitive arsenal of the newly implemented Public Procurement Act of 2015, which aims to improve efficiency and transparency, and to clean up the public procurement system which has been plagued by corruption for many years.

Finance minister Calle Schlettwein filed the public procurement regulations at the justice ministry in February, ahead of the launch of the Central Procurement Board at the beginning of April this year.

According to the procurement law, a company will be banned if it is found guilty of “misconduct relating to the submission of bids, including corruption, bid rigging, price fixing, under-pricing bids, breach of confidentiality, misconduct relating to the execution of procurement contracts, or any other misconduct relating to the responsibilities of the bidder or supplier”.

A company will also be banned, the law states, if it provides false information, or directly or indirectly offers improper inducements to influence a tender process or the implementation of a state contract.

Furthermore, the law states, a person or company found guilty of misconduct faces a fine of anything up to N$5 million, or imprisonment for a period not exceeding 10 years, or both.

The fine and imprisonment exclude the ban of up to five years, which is stipulated by the new regulations. A ban or suspension means the Central Procurement Board or any state body would not be allowed to request or accept bids, proposals or quotations from that company.

The regulations state that a public entity could recommend to the Review Panel – which is also created under the procurement law – that a company be punished with a ban. Also, the alleged corrupt firm should be reported to the Anti-Corruption Commission, the rules state.

The Review Panel would then consider whether the company should be penalised as per the request, and would then inform the company of such a decision, including the period of the ban.

According to the regulations, the Review Panel should issue a decision within 60 days of receiving a recommendation to ban.

“The suspension or debarment proceedings are conducted in such a manner as the Review Panel may consider most suitable. The Review Panel may call for oral evidence to be made by the parties to the suspension or debarment proceedings,” the rules state.

The regulations furthermore state that the Review Panel must keep records of how a decision to ban a firm was reached, and that aggrieved companies can appeal the ban within seven days of being informed of the decision of the panel.

The Review Panel is chaired by Kenandei Tjivikua.

Any state entity may request that an implicated company be blocked from taking part in state contracts while an application to have it banned is being considered, regulations state. This clause has already raised concerns that some state entities might use it to discredit companies by reporting them to the Review Panel in order to exclude them from taking part in state contracts.

Tjivikua told The Namibian on Saturday that procedures were in place to ensure fairness, and that accused parties would get the opportunity to explain themselves.

Government, through its procurement, is the largest player in the Namibian economy.

Even though this new law was born during former President Hifikepunye Pohamba’s last term, the fresh tender rules add a laudable legacy to President Hage Geingob’s administration.

The regulations state that a Review Panel decision to ban or suspend a company must be published on the website of the Policy Unit or elsewhere to inform all public entities that a firm has been banned from participating in state tenders.

The Policy Unit – also a creation of the new law – will be obliged to keep a register of bidders or suppliers banned by the state, which should be open to the public for inspection.

In addition, “a public entity must publish on its website and in any other print media widely circulated in Namibia a notice of every procurement, together with the executive summary of the bid evaluation report, within seven days of the procurement award”.

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IBM: 70 per cent of infected firms have paid ransom

Ransomware

ransomware-on-screen.jpeg

MORE THAN TWO-THIRDS of businesses affected by ransomware would pay up than go through the aggravation of removing computers from the network, wiping their storage devices and restoring from backups. 

So says a report by IBM Security, which surveyed 600 businesses and more than 1,000 consumers across the US. It follows a quadrupling of ransomware attacks during 2016 as attackers take advantage of bitcoin as an anonymous, global payments mechanism.

The report suggested that as many as 46 per cent of the respondents had been affected by ransomware and that 70 per cent of these had admitted to paying the ransom, contrary to the advice of law enforcement agencies.

Furthermore, among the organisations that admitted to paying a ransom, most coughed up five-figure sums – an indication of just how profitable ransomware has become for its creators. According to the report, 11 per cent paid between $10,000 and $20,000, one-fifth paid more than $40,000, and one-quarter admitted to paying between $20,000 and $40,000.

The FBI estimates that more than $209m was made in ransomware payments in the first quarter of the year, and the law-enforcement agency believes that the rate of growth is so high that the figure will top $1bn for the year.

The IBM report comes in a year in which several organisations in the UK have publicly admitted to having been subjected, including both the local authority in Lincolnshire, and one of the county’s NHS trusts. 

However, in many cases, even paying up doesn’t solve the problem, warned Andrew Stuart, managing director of backup and disaster recovery vendor Datto.

“We would advise businesses not to pay, as our own research has shown that a quarter of businesses do not receive their data even after payment,” said Stuart. 

“A blended security approach is what businesses need – educate your users, update all software to the latest patched versions, install a decent AV, and most importantly ensure you have backups in place.” µ

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Interns at some firms well paid

Summer is nearing, and workplaces everywhere are awaiting the arrival of this year’s interns to help out on extra projects and shoulder the seasonal load. But among certain companies, they’re likely doing more than getting coffee and making copies. Or at least, they’re being paid that way.

According to a new report by the jobs site Glassdoor, the 25 best-paying companies for internships each pay their median summer worker more than $4,500 a month.

That amount, if it was paid over the course of a full year, would be north of $54,000, exceeding the median annual pay for a U.S. worker, according to Glassdoor’s own local pay reports ($51,350), and the annual figure calculated from the Bureau of Labor Statistics’ latest weekly earnings data for full-time wage and salary workers ($44,460).

Topping the list was Facebook, where the median pay for interns is $8,000 a month, according to the reports from the newest analysis. That’s $1,800 more than the $6,200 the social media giant reportedly paid interns when Glassdoor last issued its last highest paying internship report, in 2014. The next three were Microsoft (which pays a median $7,100 a month); ExxonMobil ($6,507) and Salesforce ($6,450).

Interns are “doing real work with real deadlines and very high expectations,” said Scott Dobroski, Glassdoor’s community expert, in an interview. “But they’re getting hired at a level that’s much more than the average U.S. worker.”

Glassdoor’s analysis is culled from self-reported salary numbers offered by current or recent interns (those who have completed an internship within the past year) and includes only companies that have at least 25 reports. Dobroski notes that the numbers are a median – sought-after engineering interns with specialized skills likely make more than summer workers in the marketing department – and that the more limited differences between experience levels and job categories for interns allow for the smaller sample size.

Among the top 25, the list remains heavily technology focused, with 16 of the top 25 in tech or tech-related fields, along with finance, oil and gas, and consulting firms. At all but three of the 16 companies that made repeat appearances from 2014, the median pay went up, sometimes sizably, with seven seeing percentage increases of 10 percent or more. (Emails to representatives from the top four companies to confirm Glassdoor’s numbers were not immediately returned or companies declined to confirm the data.)

Some firms well known for high summer pay – investment banks, say, or law firms – might not be represented if there are not enough salary reports from interns to meet the sample size, Dobroski said. That was the case with firms such as Goldman Sachs or Skadden, Arps, Slate, Meagher & Flom, he said.

Geography also plays a role: Companies with large employee populations in big coastal cities, such as Bloomberg (No. 7) or the many tech firms on the list, end up paying more, even to interns.

“Part of it is definitely driven by geography,” he said. “More than half of them are headquartered in the San Francisco Bay Area or New York.”

Dobroski says Glassdoor does not have data on whether the lawsuits in recent years over paid versus unpaid internships – or the general attention paid to that issue – may have had an influence on an increase.

“But what we see anecdotally and hear from employers and in policymaking is a push toward paying for interns, as well as guidelines within companies that they’re being treated more like full-time or part-time employees,” he said.

“They’ve no longer just come in for baby-sitting. The internship is designed for you to get experience.”

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Law school assistant dean receives lawyer award

Stephen Rispoli of Baylor Law School has been named the recipient of the 2017 Outstanding Young Lawyer of McLennan County Award.

The Outstanding Young Lawyer Award is presented each year by the Waco-McLennan County Young Lawyers Association to a young lawyer with qualities including, but not limited to, professional proficiency, service to the profession and service to the community.

He was presented the award by U.S. Magistrate Judge Jeffrey C. Manske.

In the fall of 2014, Rispoli proposed and developed the annual MCYLA Pro Bono Challenge. This program has led to a resurgence in pro bono activity among the bar in McLennan County, and the challenge has been met and exceeded for two consecutive years.

The program led to the McLennan County Young Lawyers Association winning statewide honors — the Award of Merit from the State Bar of Texas and the Deborah G. Hankinson Access to Justice Award from the Texas Access to Justice Commission — as well as local recognition in a Lone Star Legal Aid Pro Bono Award.

Rispoli also has been integral in the formation of Legal Mapmaker, a practice development template for young lawyers to build successful law firms, while also addressing the widening access to justice gap.

As the association’s vice president and chair of the Pro Bono Committee, Rispoli has ensured that meetings are run efficiently and that the high school mock trial runs smoothly while hosted at Baylor Law School. In addition, he serves on national and statewide pro bono committees, as well as on the city of Waco’s Zoning Board of Adjustment.

Rispoli’s title is Assistant Dean of Student Affairs and Pro Bono Programs.

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The gig economy comes to law

… basis to review documents for law firms and corporate legal departments.
… with contract work. Three-quarters of law firms with more than 250 lawyers … to greater price competition among law firms and a willingness among general … the cost of the process.
Law firms are attempting to create efficiency …
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MEPs Accuse Major European Banks, Law, Tax Firms of Acting as Offshore Middlemen

The Panama Papers exposed 213,634 offshore entities served by Mossack Fonseca, a Panama-based trust company, which provided MEPs — and the public — with valuable information for better understanding of offshore structures. Mossack Fonseca had a market share of approximately five to ten percent of the market and incorporated entities across 21 jurisdictions.

But almost 90 percent of all these offshore entities were incorporated in just four jurisdictions: the British Virgin Islands, Panama, the Seychelles and the Bahamas, according to the Greens in the European Parliament.

​The European Parliament Panama Papers inquiry committee (PANA) has now released a report into its investigation into the middlemen who help their clients to dodge taxes or launder dirty money, which found that there are several types of intermediaries, be it banks, law firms, accounting firms or other tax advisers that can help clients and usually it takes several of them to establish offshore structures, each of them having a specific role.

“Intermediaries can provide advice upon request but also pro-actively approach clients to offer them offshore schemes to avoid paying taxes, for example. Intermediaries can intervene at different stages: they can provide advice to customers, they can support the creation of offshore structures (registering and domiciling them for example), and/or they can assist with maintenance work (managing the daily paperwork or providing nominee directors),” the report found.

Offshore Inability

According to the Green group of MEPs in the European Parliament, a key difficulty pointed out by the study is that many of the intermediaries advising European citizens are located outside of Europe, which may make it harder to regulate them.

As the European Commission prepares to present a legislative proposal on future rules to deter promoters of aggressive tax planning schemes, the Greens have a few ideas to suggest. 

“One idea is simply to consider these middlemen as co-perpetrators of the infraction if the offshore structure is deemed to have breached the law. We already oblige these intermediaries to check that their clients’ assets are clean and are not the proceeds of crimes (e.g. drug trafficking, corruption, tax evasion),” the group said.

“In the same way, we can request bankers, lawyers and accountants not to get involved in setting up offshore structures that aim at breaking the law. If they do, they could then be prosecuted for the same crimes as their clients. This would have a tremendous deterrent effect and reduce the role of intermediaries in the illegal offshore business,” the Greens said.

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