B.C., Ontario lawyers exempt from new money laundering reporting requirements

B.C. Court of Appeal upholds interlocutory order

On November 20, 2001, the Honourable Madam Justice M.J. Allan of the Supreme Court of British Columbia made an order granting lawyers interlocutory relief from the requirement to comply with reporting requirements under the new federal money-laundering legislation: Federation of Law Societies of Canada v. Attorney General of Canada; The Law Society of British Columbia v. Attorney General of Canada, 2001 BCSC 1593.

Allan, J. had granted an exemption from the application of section 5 of the Regulations of the Proceeds of Crime (Money Laundering) Act, pending a full hearing on the merits of petitions of the Federation of Law Societies and the Law Society of British Columbia, which challenge the constitutionality of the legislation.

On January 18, 2002 the B.C. Court of Appeal dismissed an appeal of the interlocutory order brought by the federal government and upheld the order for the reasons given by Madam Justice Allan. As a result, B.C. lawyers remain exempt from the reporting requirements of the legislation pending the outcome of the hearing. That hearing is set for two weeks beginning June 24.

The full text of the decision of the B.C. Supreme Court is available at www.courts.gov.bc.ca/jdb-txt/SC/01/15/2001BCSC1593.htm.

Superior Court of Justice grants temporary exemption to Ontario lawyers

Following on the decision of the B.C. Supreme Court, the Ontario Superior Court of Justice on January 7 granted a temporary exemption for Ontario lawyers from the reporting requirements of the new federal money laundering legislation until a constitutional challenge can be heard in Ontario.

Justice Cullity ordered that legal counsel are exempt from the operation of section 5 of the Regulations of the Proceeds of Crime (Money Laundering) Act, pending a full hearing of petitions by the Federation of Law Societies of Canada.

In Alberta lawyers remain subject to the legislation but the Court of Queen's Bench in that province has ordered that they submit their reports to the Law Society of Alberta, not to the federal agency FINTRAC, pending the outcome of the court challenge in that province taken by the Federation of Law Societies of Canada.