Anti-Money Laundering Requirements

On May 27, 2021, Convocation approved by-law amendments to implement changes made to the Federation of Law Societies of Canada (“FLSC”)’s Model Rules to fight money laundering and terrorist financing. These amendments came into effect January 1, 2022.

The amendments ensure that the Law Society’s requirements aimed at fighting money laundering and terrorist financing are comprehensive, effective, and up-to-date. In addition, the amendments:

• Preserve solicitor-client privilege, confidentiality, and the independence of the legal professions by maintaining the Law Society’s anti-money laundering and terrorist financing (AMLTF) rules separate from the federal government’s AMLTF regime
• Require licensees to conduct sufficient diligence on client transactions to avoid unwittingly becoming involved in or assisting with money laundering, terrorist financing, or other illegal activities
• Enhance existing provisions aimed at combatting money laundering and terrorist financing and preserve the Law Society’s regulatory authority.

 

For more information, see the report to Convocation and the information on the FLSC’s website.

FLSC online learning program

The FLSC’s Anti-Money Laundering and Terrorist Financing in the Canadian Legal Profession complimentary online learning program is now available.

The program consists of five interactive modules. Together, the modules provide an overview of the problem of money laundering and terrorist financing, the risks that may be faced by legal professionals, key due diligence obligations under law society anti-money laundering and terrorist financing rules and regulations, proper use of trust accounts, and restrictions on cash transactions.

Law Society resources

The Law Society has developed new resources to support lawyers and paralegals with understanding and applying the Law Society’s amended AMLTF requirements:

• Review the At A Glance: Anti-Money Laundering and Terrorist Financing Amendments for an overview of the new requirements.
• Follow the Client Identification and Verification Flowchart  for an overview of when and how to identify and verify the identity of clients and third parties.
• Review the Frequently Asked Questions about Source of Funds and Monitoring for answers to questions about what these new requirements are and how to comply with them.
• Document your client identification, verification, and monitoring due diligence by completing the applicable File Forms.
• Use the Sample Agent Agreement when retaining an agent to verify the identity of individual clients or third-parties, or individuals authorized to give instructions on behalf of an organizational client.
• Review the Risk Assessment Case Studies to see examples of how red flags may arise in your practice and learn how to respond in line with your professional obligations.
• Use the Worksheet: Red Flags of Fraud, Money Laundering, Terrorist Financing and Other Illegal Activity to learn more about red flags, identify them in a client matter, and document your due diligence.
• Consult the Glossary of Terms for definitions of important AMLTF terms.
• Check the Examples of Government Issued Photo Identification for a list of acceptable government issued documents that can be used to verify identity using the government issued photo identification method.  
• Refer to the Examples of Reliable Sources of Information for a list of information and documents that can be used to verify identity using the dual process method.

The Law Society continues  to develop and update AMLTF resources. These new resources will be posted to this page as they become available. Check back here or follow us on social media for updates.

CPD Program

To guide lawyers and paralegals through the by-law amendments, the Law Society’s complimentary CPD program, The New Anti-Money Laundering Requirements: What You Need to Know Before January 1, 2022, is available on-demand.

Practice Supports

Lawyers and paralegals with questions about the new requirements may also wish to contact the Law Society’s Practice Management Helpline at 416-947-3315 or toll free 1-800-668-7380, ext. 3315 and select the option to connect with the Helpline.