British Columbia

Closing loopholes in anti-money laundering laws could hurt clients' rights, says lawyer

A Vancouver lawyer and bencher with the B.C. Law Society says he's frustrated by reports that the federal government wants to close a loophole in its anti-money laundering system.

'We're talking the rights of citizens and that's the right to go see a lawyer, in confidence,' lawyer says

The Supreme Court of Canada ruled in 2015 that lawyers be exempt from sweeping searches without warrants because it infringes on clients' constitutional rights. (CBC)

A Vancouver lawyer and bencher with the B.C. Law Society says he's frustrated by reports that the federal government wants to close a loophole in its anti-money laundering system.

Craig Ferris said such a plan could contravene the constitutional rights of clients.

Ferris was responding to reports that Ottawa intends to close the loophole, which would require lawyers to report financial transactions to the federal government.

"We're not talking about the rights of lawyers here," Ferris told On the Coast's host Gloria Macarenko.

"We're talking the rights of citizens and that's the right to go see a lawyer, in confidence, to transmit privileged information and to know that your lawyer is not becoming an agent of the state by having it be required to transmit information back to the federal government."

Last year, the Supreme Court of Canada agreed with lawyers in a case that settled a 15-year battle. The court found that the parts of the law that give authorities sweeping power to search and seize files from lawyers' offices without a warrant carry an inherent risk of breaching solicitor-client privilege.

Law societies set own rules

Law societies have established their own anti-money laundering rules and have been exempt from the current law while the case made its way through the courts.

Those rules prevent lawyers from accepting payments in cash over the amount of $7,500. Any transaction over that amount must be paid electronically, providing a record of payment.

The federal anti-money laundering agency, FINTRAC, only requires cash transactions of $10,000 or more to be reported, according to the government website.

"When you talk of an exemption, it's an exemption from the regulation of the federal government, it's not an exemption from regulation," Ferris said.

He was part of the team of lawyers that argued in front of the Supreme Court on this issue and says that the focus should be less on where the money is going — because much of that is documented — and more on where the funds are coming from.

"I hope the federal government will open up a dialogue with the Federation (of Law Societies), and if they have information that suggests that the rules need to be tightened… that we work together to do that."

With files from the CBC's On The Coast


To hear the full interview listen to audio labelled Federal government looks to close loophole in anti-money laundering system

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