A legal horror story

When you have daily searches set up for “money laundering”, “financial crime”, “proceeds of crime”, “white collar crime”, “aml/cft” and “donny osmond” (as I do), you’re going to get some interesting stories.  And today I was sent this one, which explains that Canada’s lawyers are exempt from the country’s AML/CFT legislation.  Whoa, back up the horses there – did I say exempt?  I did indeed.  My curiosity was piqued, and so I went on the hunt and turned up this earlier story.  Are you sitting comfortably?  If so, I’ll begin.

Once upon a time, Canada passed a large piece of AML/CFT legislation called the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (or PCMLTFA – which is not much better, frankly).  Under this law, various businesses – including banks, accountants, lawyers, estate agents and others – were required to put in place procedures to stop naughty people moving their money around.  But the lawyers decided that they did not like the look of this, not one bit, and so they took it to court, saying that it infringed their solicitor-client confidentiality by requiring them to report their clients to the authorities.  A really important lawyer called John Hunter explained it like this: “One of lawyers’ primary roles is to stand between the state and the individual and advise and protect the individual within the law from state activities that might intrude on matters unfairly or unreasonably.  Just as it’s important to have an independent judiciary, it’s important to have an independent bar, one that isn’t at the beck and call of the state.”  And do you know what, boys and girls: the judge agreed with him!  Judge Laura Gerow decided: “In my view, reading down the act to exclude legal counsel and legal firms is appropriate, as this remedy respects both Parliament’s objectives of controlling money laundering and terrorist financing… and the charter rights of lawyers and their clients.”

The Canadian government was very sad when it heard this, and asked another judge to think about it a bit more.  And do you know what: Justice Christopher Hinkson agreed with the first judge after all, saying: “In my opinion the independence of the bar is a principle of fundamental justice with which the regime interferes to an unacceptable degree.”

Now some of you might be thinking that judges are in fact just grown-up lawyers, which is true.  And lawyers in other less exciting countries – Canada has grizzly bears, and policemen on horses! – might be encouraged to try the same argument with their favourite judges.  In the meantime, why don’t we wait and see what the FATF has to say about it all when it next goes on its holidays to Canada?  The big question is: will they all live happily ever after, or only the criminals?

This entry was posted in AML, Legislation, Money laundering and tagged , , , , , , , . Bookmark the permalink.

2 Responses to A legal horror story

  1. Roy McCarthy says:

    Words fail me. So crooked lawyers (Heaven forfend) are free to accommodate whatever transactions their clients instruct and are protected by statute?

  2. Dear Roy
    I know, I know – it’s astonishing, isn’t it? I keep re-reading those articles, to see whether I have misunderstood, but that seems to be the situation. Something of a retrograde step, one might say. Thankfully, as you say, there are no crooked/corruptible/cowed Canadian lawyers, so all’s well.
    Best wishes from Susan

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