Client ID & Verification and Anti-Money Laundering Risk Management

This web page contains resources to help you to comply with your anti-money money laundering obligations and manage the risk of becoming involved with bad actors seeking to use your legal services to assist them in dishonest, criminal or fraudulent schemes. Some resources are specific to the Law Society of BC’s client identification and verification rules (Rules 3-98 to 3-110) and BC Code rule 3.2-7 and include webinars, checklists and articles. Third-party resources are also included, such as from the federal government and the Federation of Law Societies of Canada.

Client ID and verification – Top 10 tips

Go to Client ID & Verification – Frequently asked questions

Also see resources listed below

Client identification and verification rules

A lawyer is obligated to know his or her client, to understand the client’s financial dealings in relation to the retainer, and to manage any risks arising from the professional business relationship with the client. Law Society Rules, Part 3, Division 11, Rules 3-98 to 3-110 require lawyers to follow client identification and verification procedures when retained by a client to provide legal services. There are six main requirements:

1. Identify the client (Rule 3-100).
2. Verify the client’s ID if there is a “financial transaction” (Rules 3-102 to 3-106).
3. Obtain from the client and record, with the applicable date, information about the source of money if there is a “financial transaction” (Rules 3-102(1)(a), 3-103(4)(b)(ii), and 3-110(1)(a)(ii)) effective January 1, 2020).
4. Maintain and retain records (Rule 3-107).
5. Withdraw if you know or ought to know that you would be assisting in fraud or other illegal conduct (Rule 3-109).
6. Monitor the lawyer/client professional business relationship periodically while retained in respect of a “financial transaction” and keep a dated record of the measures taken and information obtained (new Rule 3-110 effective January 1, 2020).

If you have questions regarding the rules, you are welcome to contact a practice advisor (practiceadvice@lsbc.org or 604.443.5797).

Resources

Guidance for virtual verification of your client’s identity using government-issued photo ID and technology

Client Identification, Verification and Source of Money Checklist, current to April 1, 2024; includes Sample Agreement with Agent for Verification (pages A-1-16 to A-1-18)

Fraud 101 for lawyers, Fall 2021 Benchers' Bulletin (p. 10)

Real estate transactions – know your client primer, Summer 2021 Benchers’ Bulletin (p. 12)

Forming companies and other structures – managing the risk, Spring 2021 Benchers' Bulletin (p.8)

Random calls and emails inquiring about shelf companies, Fraud alert, March 4, 2021

Client identification and verification – addressing your questions, Fall-Winter 2020 Benchers' Bulletin (p.12)

Knowing your client - Guidance and rules during COVID-19, Summer 2020 Benchers' Bulletin (pp. 18 -21) – includes the March 17, 2020 Notice to the Profession (client verification in the context of COVID-19)

Know your client – addressing questions and risks, Spring 2020 Benchers’ Bulletin (p.8)

New client verification and source of money requirements, Winter 2019 Benchers’ Bulletin (p.13)

CLE-TV: Anti-Money Laundering – Client Identification and Verification Rules – one-hour webinar initially provided on November 27, 2019 by Practice Advisor Barbara Buchanan, QC (eligible for one hour of CPD credit)

Rule amendments enhance Law Society’s anti-money laundering measures, Fall 2019 Benchers’ Bulletin (p.14)

Anti-money laundering cash transaction rule essentials, Summer 2019 Benchers’ Bulletin (p.10)

Anti-Money Laundering initiative

See also the "Client Identification & Verification" section of the Advice Decision-Making Assistant (ADMA).

Discipline advisories:

Client ID and verification (August 6, 2024)
Country/geographic risk (February 11, 2021)
Securities fraud: Micro-cap stocks (June 1, 2020)
Private lending (April 2, 2019)
Lawyers are gatekeepers (April 10, 2018)
Client ID and verification (February 8, 2018)

Federation of Law Societies of Canada:

Anti-Money Laundering (April 2024, online learning program eligible for 3 CPD credits)
Guidance on Politically Exposed Persons/Heads of International Organizations (December 2023)
Risk Assessment and Compliance (December 2023)
Quick Reference Guide on Potential Risks (Red Flags) (December 2023)
FAQs on the Client Identification and Verification Model Rules  (March 2023)
Guidance for the Legal Profession (March 2023) 
Canadian Sanctions Related to Russia and Belarus: Implications for the Profession (April 2022)
Risk Assessment Case Studies for the Legal Profession (February 2020)
Risk Advisories for the Legal Profession (December 2019)

Government and other third-party resources:

Special Bulletin on the use of the legal profession in money laundering and sanctions evasion (FINTRAC, October 2024)
The Consolidated Canadian Autonomous Sanctions List (includes individuals and entities subject to specific sanctions regulations made under the Special Economic Measures Act and the Justice for Victims of Corrupt Foreign Officials Act)