New audit of lawyers' third-party accounts strengthens transparency and prevents fraud
Belgian banks and bar associations have joined forces in the fight against fraud with a new, automated check on the movement of money from lawyers' third-party accounts. This cross-sector collaboration marks a major step forward in the fight against abuse and fraud. Clients can therefore count on even more transparent and secure management of their money.
More efficient and accurate controls
Thanks to a sophisticated digital audit system, the audit is now largely automatic. Until recently, control of third-party accounts was mainly done manually, based on annual reporting and sample statements. However, executives needed high-performance solutions to strengthen the control of quality accounts.
The new system uses advanced detection software inspired by existing banking models for fraud prevention and money laundering detection. This software analyses all transactions on third-party accounts on a daily basis, and automatically identifies suspicious or anomalous transactions. Only when a transaction shows a risk profile, it is forwarded, under the supervision of a central control entity, to the relevant staff member for further evaluation.
The software, already common in the banking sector for detecting fraud and money laundering, was adapted to the specific requirements for a screening of lawyers' third-party accounts. Technically, this process is proceeding without any significant problems.
This collaboration is a fundamental investment in trust and transparency.
More transparency, less administration
For the lawyer, this system means a significant easing of the administrative burden. Thanks to continuous monitoring, the annual declaration of third-party accounts may become unnecessary. The lawyer thus retains more time and space to concentrate on his core tasks, without sacrificing supervision or compliance.
At the same time, this approach strengthens clients' confidence in financial management within the legal profession, underlining the profession's social commitment.
Strict privacy and data protection safeguards
Automation is fully compliant with GDPR. All transaction data is encrypted and pseudonymised. Only in the case of an automatically generated report, only the authorised staff member is given access to the relevant - and only necessary - information for further follow-up. Data processing takes place within a strict legal framework.
For the development of the system, Febelfin, Avocats.be, Advocaat.be and D-PA worked closely together. Concerns about privacy and control mechanisms were taken into account. This cooperation underlines the legal robustness and legitimacy of this control.
Legislative framework
This initiative is the result of intensive cooperation between Advocaat.be, Avocats.be, Febelfin and DP-A, and illustrates how cooperation between legal and financial actors can lead to more efficient, safer and future-proof supervision.
To enable this automation, a royal decree was published on 18 July 2024, which will enter into force on 1 October 2024. In addition, Article 446quater of the Judicial Code was amended to define the essential elements of data processing. The regulations were prepared in consultation with the Council of State and the Data Protection Authority (GBA).
In line with this reform, the existing agreement between banks and the Orders was also renewed. This renewal aims at greater harmonisation in the way third-party accounts are managed and controlled. This will give lawyers and interested parties a clearer and more uniform view of these accounts, regardless of which bank they are opened with.
Finally, the Codex Deontologie of the Flemish and French-speaking Orders were aligned. The irrevocable mandate of the bank and the President of the Bar remains in place.
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