Pubdate: Thu, 06 Nov 2003
Source: National Post (Canada)
Copyright: 2003 Southam Inc.
Contact:  http://www.nationalpost.com/
Details: http://www.mapinc.org/media/286
Author: Adrian Humphreys

CRACK DOWN ON LAWYERS: FINANCIAL CRIMES EXPERT

Money Laundering

As government officials prepare to meet with lawyers' groups to end an 
impasse over Canada's anti-money laundering rules, a leading specialist on 
financial crimes says excluding lawyers from tough new reporting 
requirements leaves the door wide open for gangsters to access their dirty 
money.

Until the government starts throwing lawyers in jail for helping criminal 
clients wash their money, there will be no serious impact on financial 
crimes in Canada, said Jeffrey Robinson, a London-based money laundering 
specialist and prolific author on financial crimes.

"It is a huge hole," Mr. Robinson told the National Post. "If you start 
throwing Canadian lawyers in jail, things would change radically."

The comments come as officials with the departments of Justice and Finance 
prepare to meet with representatives of the Federation of Law Societies and 
the Canadian Bar Association on Friday in Victoria to try to work through 
deep divisions on the issue.

Lawyers won a series of court-ordered exemptions from the government's 
Proceeds of Crime (Money Laundering Act) that require a long list of 
bankers, accountants and other financial intermediaries to report 
suspicious transactions to the Financial Transactions and Reports Analysis 
Centre of Canada, a central tracking authority known as FinTRAC.

The government's act came into force two years ago and was immediately 
challenged by lawyers' groups in the B.C. Supreme Court. That court granted 
an injunction, exempting lawyers from reporting to FinTRAC until a full 
hearing on the matter.

The government refused, however, to extend that exemption across Canada, 
leading to challenges being mounted in seven provinces. After the lawyers' 
groups won subsequent court injunctions in Alberta, Saskatchewan, Nova 
Scotia and Ontario, plus two appeals, the government agreed to re-evaluate 
the regulation.

Tomorrow's meeting is the first attempt to reach an agreement that will 
tighten the money laundering regulations while not offending the courts and 
the legal profession.

Maurice Laprairie, a Regina lawyer and chairman of the federation's task 
force on the money laundering issue, said it is not that lawyers as 
individuals feel they should be exempt from the law, but that regulations 
should not intrude on solicitor-client privilege.

"They want to ask questions about our clients and that is the tricky part," 
he said yesterday. "For little if any benefit, the principles of a public's 
right to legal protection is throw out. It's a case of little benefit--huge 
harm."

In a submission to the House of Commons finance committee, the bar 
association said: "The social cost of conscripting the legal profession 
into the role of state investigators against their own clients is profound. 
Clients must be able to seek the assistance of a lawyer knowing that the 
information they communicate will remain with the lawyer and go no further."

Mr. Robinson, however, said it is of paramount importance to bring lawyers 
into the suspicious transaction reporting regime.

The exclusion of lawyers allows criminals to take the money they acquire 
through drug trafficking and other criminal acts and give it a clean 
pedigree by moving it through accounts cloaked by lawyer's confidentiality 
privileges, he said. And that allows gangsters to stay in business.

"A small number of lawyers would do it knowingly. A bigger number do it 
unknowingly," Mr. Robinson said on a recent visit to Toronto.

"The basis of the legal system is that everybody is entitled to a lawyer to 
defend him and protect his rights. And rightfully so. But there is a big 
difference between that and when the lawyer becomes your business partner 
to hide money. This is not a case of going after lawyers who are giving 
legal advice to a client, this is, in essence, a business partner who 
happens to have been to law school and works out of a law office," he said.

The Department of Finance remains determined to find a way to include 
lawyers in the reporting regulations but is willing to work to find a less 
confrontational way of doing it, said Andree Houde, department spokeswoman.

"The government has been working on some proposals that will hopefully meet 
with the lawyers' approval," Ms. Houde said.

"We want to bring lawyers back onto the list. We remain committed to a 
strong anti-money laundering regime that has all financial intermediaries 
complying with reporting regulations and that includes the legal 
profession," she said. 
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