Canadian Court Enjoins Application of Anti-Money Laundering to Lawyers

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Monday, April 1, 2002
Author: 
Bruce Zagaris
Volume: 
18
Issue: 
4
133
Abstract: 
On November 20, 2001, British Columbia Supreme Court Justice Marion Allan granted a temporary injunction on the application of certain obligations under the regulations of Bill C-22, Canada’s revised Proceeds of Crime (Money Laundering) Act, S.C., c. 17. The Canadian Bar Associates was given leave to intervene in support of the petition. The petitioners challenged the constitutional validity of the legislation and sought a declaration that certain sections of the law, especially sections 5(i) and (j) of the Regulations are inconsistent with the Constitution of Canada. In particular, the petitioners sought and received a temporary exemption from the requirement for lawyers to identify and report “suspicious transactions” under Sec. 5 of the Regulations. The Regulation makes it a crime for every lawyer’s relationship with his or her client. According to the petition, the subjectivity of the requirement threatens the independence of the bar and solictitor-client confidentiality, and creates a conflict between lawyers’ duties to their clients and their obligation to report confidential information to the government.