|For immediate release||April 2, 2004|
Law Society of BC takes steps against money laundering
VANCOUVER - The Law Society of BC is taking proactive steps to combat money laundering by today enacting new financial rules to ensure BC lawyers are at the forefront of the fight against money laundering and terrorist financing.
"While there are few cases of lawyers knowingly laundering money on behalf of criminal or terrorist organizations, the Law Society of BC recognizes that in the post-9/11 world the legal profession must take steps to prevent money laundering," Law Society of BC President William Everett, QC said.
Under the new rules, lawyers are prohibited from accepting $10,000 or more in cash other than from a law enforcement agency; pursuant to a court order; in the lawyer's capacity as executor of a will or administrator of an estate; or as professional fees, expenses or bail.
The Law Society of BC's new rules mirror Proceeds of Crime (Money Laundering) and Terrorist Financing Act regulations, which define a cash transaction as the receipt of $10,000 or more in cash in a single transaction or the receipt of two or more cash amounts in a 24-hour period that total $10,000 or more. They also mirror PC(ML)TFA regulations that exempt fees, expenses and bail from the reporting requirements. Clients who wish to deposit $10,000 or more in cash with a lawyer will be required to convert the cash into negotiable instruments through a financial institution before depositing the money with a lawyer.
PC(ML)TFA regulations require all professionals who accept $10,000 or more in cash to report the transaction to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Lawyers are currently exempt from PC(ML)TFA reporting requirements after the Law Society of BC, along with the Federation of Law Societies of Canada, obtained an injunction from the BC Supreme Court in November 2001. The law societies argued in court that the PC(ML)TFA violated the constitution because it required lawyers to make secret reports about privileged client matters to the government, contrary to the concept of an independent legal profession. The BC Supreme Court imposed the injunction until the constitutional issue could be heard. The BC Court of Appeal upheld the decision, and the superior courts of several other provinces granted similar injunctions. The federal government later agreed to be bound by the BC decision until the court case is concluded. The trial is set for November 2004.
"These new rules will ensure that BC lawyers are not involved in transactions that the federal government has identified as a concern in the fight against money laundering," Mr. Everett said. "With the new rules, lawyers will be prevented from unwittingly advancing criminal schemes. These rules, along with longstanding Law Society rules prohibiting lawyers from engaging in illegal activity, and a strong, independent Law Society discipline process will ensure that BC lawyers are taking proactive steps to stop money laundering."
The Law Society of BC was founded in 1869 and is the governing body of the legal profession in BC. It is an independent organization funded by dues paid by all BC lawyers. Under the provisions of the Legal Profession Act, the Law Society is responsible for the licensing, professional conduct and discipline of the more than 10,000 lawyers in BC.
Law Society of BC media contact:
Brad Daisley, Public Affairs Manager
Office: 604-443-5724 or 1-800-903-5300 toll-free in BC