7.2 Why We Have These Requirements

In the aftermath of the September 11, 2001 terrorist attacks, the Canadian government amended legislation to widen its powers with respect money laundering and financing terrorist organizations. This legislation, The Proceeds of Crime (Money Laundering) and Terrorist Financing Act S.C 2000 c. 17 (the Act), requires the reporting of certain types of transaction to FINTRAC, the Financial Transaction and Reports Analysis Centre of Canada. The Act purported to apply to lawyers which abrogated solicitor-client privilege.

The Federation of Law Societies, the national association of the provincial and territory legal regulators, launched a constitutional challenge of the Act. In order to afford the same regulation without infringing on privilege, the Federation also designed Model Rules on Client Identification and Verification which reflected the principles underlying the legislation while protecting solicitor-client privilege. The Law Society of Alberta adopted the Model Rules, which include a “no cash” provision as well as identification and verification rules. See Client Identification and Verification: Interpretation Guideline.

Ultimately, in 2015, the Supreme Court of Canada read down certain provisions of the Act to exclude legal counsel and law firms from the operation of those provisions. See Attorney General Canada  v. The Federation of Law Societies of Canada, [2015] 1 SCR 401, 2015 SCC 7 (CanLII).

This Module with provide you with a basic overview of the Client Identification and Verification Rules. The Rules are very detailed. You should review them when you encounter unusual situations. This Module is not a replacement for the Rules.

<7.1 Introduction and Objectives

7.3 Client Identification versus Client Verification>

Last modified: Tuesday, 28 March 2017, 5:31 PM