Money laundering is illegal. For over a decade, the Law Society Rules have contained rules limiting the ability of lawyers to accept cash during a retainer, and rules requiring lawyers to identify and verify their clients. These rules have been based on the Federation of Law Societies of Canada’s (FLSC) model rules. The rules are an important part of the efforts of Canada’s law societies to limit the opportunity for money-laundering to take place through the use of a lawyer.
The model rules were prepared to reflect regulations under the federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act, recognising that the state should not be permitted to interfere in the solicitor-client relationship by requiring lawyers to keep records regarding their clients’ activities that could be required to be handed over to the government, a position that was upheld by the Supreme Court of Canada in Canada (A.G.) v. Federation of Law Societies of Canada [2015] 1 S.C.R. 401.
The FLSC has been reviewing the model rules in an effort to ensure that they remain relevant and effective. In part, this review has been brought about by changes in the federal regulations and by concerns expressed by government and others about perceived gaps in regulation of anti money-laundering regimes.
A FLSC Task Force has released proposed amendments to the model rules and circulated their findings to the law societies, seeking comments. The consultation paper and proposed amendments to the model rules can be found here.
The Law Society of BC has created a working group that has reviewed and considered the consultation paper for the purposes of providing a response. The working group would appreciate feedback from lawyers to the proposed changes, and in particular feedback on the proposed amendments that would eliminate certain exemptions to the application of the current rules.
Changes to the model rules require unanimous approval of the FLSC Council. If granted, the model rules would then be forwarded to the law societies for adoption. Changes to the rules in BC would require approval by two-thirds of the Benchers present at the meeting at which the amendments are considered.
Submissions or comments (which the Law Society may make available publicly with attribution) can be forwarded prior to March 15, 2018 by sending them to amlconsultation@lsbc.org or by mail to:
Michael Lucas, Manager, Policy and Legal Services
Law Society of British Columbia
845 Cambie Street
Vancouver, BC V6B 4Z9
