by Kevon K K Charles, Managing Partner, K C Legal Consultancy, Attorneys-at-Law; Senior Associate, Samuel Phillip & Associates, Grenada

One of the more difficult conversations I occasionally have with clients begins with a question they never expect to hear.

“Counsel, why are you asking me all of these questions?”

To the client, it is often a straightforward property transaction. To the attorney, it may be the first opportunity to determine whether what appears to be an ordinary transaction is, in fact, one that requires a closer look.

And there is an important distinction. Not every unusual transaction is suspicious. But every suspicious transaction usually begins by looking unusual.

Curiosity before suspicion

One of the biggest misconceptions surrounding anti-money laundering obligations is that lawyers are expected to investigate crime. We are not, nor are we expected to assume that every client is dishonest.

Our responsibility is much simpler, but no less important. Where the circumstances surrounding a transaction raise reasonable concerns, we have a professional obligation to ask questions before proceeding.

 

Most of the time, the answers are entirely satisfactory. Sometimes, however, they reveal that further enquiries are necessary.

That is not suspicion. That is good legal practice.

The Caribbean reality

Property has always been one of the principal ways wealth has been created, preserved, and transferred throughout the Caribbean.

• Many of our families acquired land decades ago through arrangements that made perfect sense at the time
• Parents placed property in the names of children. Brothers held land for sisters who had migrated abroad
• Property was transferred within families for a dollar “out of love and affection”
• Neighbours occupied family lands for years without formal documentation

None of those arrangements necessarily suggest wrongdoing.

However, when those same properties enter today’s regulated financial system, the questions being asked are very different from those that were being asked 50 years ago.

A scenario that is more common than you think

Consider this.

A purchaser agrees to buy a parcel of land in Grenada for EC$450,000. During the course of the transaction, I enquire about the source of the purchase money. The response is straightforward. “None of the money is mine. My uncle in Canada is paying for everything. He’s family. He’s helping me out.”

On its face, there may be nothing unusual about that explanation. In fact, it reflects the reality of many Caribbean families. Relatives abroad have been helping to purchase land, build homes, and support loved ones for generations.

However, as the conversation continues, it becomes apparent that the uncle is not purchasing the property, will not appear on the title, and that there is no deed of gift, loan agreement, or other document explaining the arrangement. At that point, perfectly reasonable questions begin to arise.

Why is a third party providing all of the purchase money? Is it intended to be a gift, a loan, or an investment? Can the arrangement be properly documented? Is there a clear explanation that would satisfy a financial institution if those questions were later asked?

None of those questions presumes wrongdoing. They simply seek to understand the transaction before it proceeds. That is the difference between curiosity and suspicion.

The lawyer’s responsibility 

One question I have been asked on more than one occasion is whether lawyers are slowly becoming investigators. I do not believe that is the correct way to view it.

Our role remains that of legal advisor. However, modern practice increasingly requires us to understand a transaction well enough to recognise when something simply does not fit. That does not mean accusing clients of dishonesty, nor does it mean treating every unusual circumstance as suspicious. It means exercising sound professional judgment and asking the questions that a prudent practitioner ought to ask.

Ultimately, those questions are not intended to frustrate a transaction. More often than not, they protect it. They help ensure that the transaction can withstand scrutiny, that the client is properly advised, and that the attorney fulfils his or her professional obligations.

Sometimes, the question that feels the most uncomfortable to ask is the one that ultimately protects everyone involved.

Closing reflections

Perhaps the greatest misconception about anti-money laundering obligations is that they begin with suspicion. In reality, they begin with curiosity. The willingness to ask one more question, to seek one more explanation, and to understand one more piece of the story before proceeding.

In today’s Caribbean, asking those questions is no longer simply good practice; it has become an essential part of protecting the integrity of property transactions, the interests of clients, and the reputation of the legal profession itself.

Sometimes, the question that feels the most uncomfortable to ask is the one that ultimately protects everyone involved.

This article forms part of a continuing examination of the evolving relationship between wealth, property, and compliance in the Caribbean.

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