Pubdate: Wed, 04 Oct 2006
Source: Ottawa Citizen (CN ON)
Copyright: 2006 The Ottawa Citizen
Contact:  http://www.canada.com/ottawa/ottawacitizen/
Details: http://www.mapinc.org/media/326
Author: Jack Aubry, The Ottawa Citizen

TARGET LAWYERS, JEWELLERS UNDER MONEY LAUNDERING LAW: REPORT

Canada's lawyers need to be included in upcoming amendments to the 
law against money laundering and terrorist financing, a newly 
released Senate committee report concludes.

The interim report of the Senate's banking, trade and commerce 
committee also recommends jewellers be added in the Conservative 
government's promised changes to close loopholes in controls of 
illegal financial transactions.

"The committee feels that, given the mobility of money and the 
probability that those seeking to launder money and finance terrorist 
activities will go to the country of least resistance, Canada must be 
- -- and must be seen as -- an unreceptive country within which to 
undertake these activities," concluded the report, titled: Stemming 
the Flow of Illicit Money: A Priority for Canada.

The recommendation to bring the legal profession under the 
legislation will be the most controversial, as Canadian lawyers have 
already said they are bracing for a fight if they are forced to 
report large cash payments from clients to a federal anti-money 
laundering agency.

The committee was told the prospect was unacceptable because it would 
contravene solicitor-client privilege. Appearing to straddle the 
fence on the issue, the senators recommended that ongoing government 
negotiations with the Federation of Law Societies continue and that 
reporting requirements should respect solicitor-client privilege.

Finance Minister Jim Flaherty has already signalled that he intends 
to introduce legislation, possibly this fall, to toughen existing 
federal laws against terrorist-group financing and money laundering 
in order to bring them up to international standards.

The Senate committee document said Finance Department officials told 
senators that media reports and a task force on money laundering have 
concluded that the voluntary measures "put in place by the legal 
profession fail to meet international standards."

Lawyers suspect the government intends to eliminate a concession they 
secured more than three years ago, when the then-Liberal government 
exempted the legal professional from dirty-money legislation that 
required financial institutions and other intermediaries to report 
suspicious cash transactions and those involving more than $10,000 to 
a government agency called the Financial Transactions Reports 
Analysis Centre of Canada.

The committee was told by the RCMP, the Justice Department and others 
that the lawyers' exemption from the law is a major gap or loophole 
in the fight against dirty money.
- ---
MAP posted-by: Elaine