Speech (committee meeting)

{
    "time": "2006-11-02 12:40:00",
    "attribution": {
        "en": "Mr. James Varro (Policy Counsel, Anti-Money Laundering Committee, Federation of Law Societies of Canada)",
        "fr": ""
    },
    "content": {
        "en": "<p data-HoCid=\"291038\" data-originallang=\"en\">Thank you very much, Mr. Chair and honourable committee members.</p>\n<p data-HoCid=\"291039\" data-originallang=\"en\">The federation appreciates the opportunity to address this committee on the subject of Bill <a data-HoCid=\"2374081\" href=\"/bills/39-1/C-25/\" title=\"An Act to amend the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Income Tax Act and to make a consequential amendment to another Act\">C-25</a>. I should say at the outset that normally the president of the federation, or at least the chair of our anti-money-laundering committee, would be before you today, but the entire federation council, including the chair, is in Vancouver for a council meeting. I am your representative today, and I'm policy counsel to the federation's anti-money-laundering committee.</p>\n<p data-HoCid=\"291040\" data-originallang=\"en\">The federation is the coordinating body of the 14 law societies in Canada. The member law societies, as you may know, are statutorily charged by legislation in each province and territory with the responsibility of governing the some 88,000 lawyers, and in Quebec the 3,500 notaries, in the public interest.</p>\n<p data-HoCid=\"291041\" data-originallang=\"en\">The federation supports Canada's effort to fight money laundering and terrorist financing. The federation recognizes the importance of the objectives of the money laundering act and concurs with its basic purposes. The initiatives to fight these crimes, which include the fulfillment of Canada's commitment internationally pursuant to the FATF requirement, however, must be accomplished within the framework of the values and the constitutional principles on which Canadian society rests. This includes the rule of law and, within that, the right of an individual to an independent judiciary and independent legal counsel.</p>\n<p data-HoCid=\"291042\" data-originallang=\"en\">My comments today are going to be limited to two aspects of the bill: proposed section 10.1 and proposed section 6.1.</p>\n<p data-HoCid=\"291043\" data-originallang=\"en\"> First, proposed section 10.1 is the new section that exempts lawyers from the suspicious transactions and prescribed transactions reporting requirements. The federation is very pleased that this exemption has been provided in this bill. The federation has implemented its own regulation to deal with the issue of suspicious transactions and prescribed transactions reporting requirements. </p>\n<p data-HoCid=\"291044\" data-originallang=\"en\">As you may know, the law society regulations prohibit lawyers from receiving cash or accepting cash of $7,500 or more, with some limited exceptions, from clients and others. It actually goes further than simply requiring lawyers to report transactions; it prevents lawyers from accepting the money that might have required a report.</p>\n<p data-HoCid=\"291045\" data-originallang=\"en\">The federation appreciates the fact that this exemption is in the bill. The reporting requirements initiated, as you may know, the constitutional challenge to the money laundering act back in 2001. The result was injunctive relief, thus suspending the application of the act to lawyers pending the resolution of the constitutional challenge.</p>\n<p data-HoCid=\"291046\" data-originallang=\"en\">The federation's view is that the public interest, in addressing money laundering and terrorist financing as it relates to the legal profession, is best served by having lawyers, through their self-regulatory authority, address the risks their profession presents. In this way, the independence from government is maintained and the core values of the legal profession, for the benefit of the public, are protected. I've already mentioned the no-cash rule by which lawyers are prohibited from accepting $7,500 or more from clients. They are also required to keep a cash transactions record as part of their record-keeping requirements.</p>\n<p data-HoCid=\"291047\" data-originallang=\"en\">I'd like to move now to proposed section 6.1 of the bill, which is an enabling provision for regulations on the client due diligence and identification requirements. This follows from FATF requirements for enhanced customer due diligence and client identification requirements. </p>\n<p data-HoCid=\"291048\" data-originallang=\"en\">The federation acknowledges the importance of Canada's commitment to the FATF standards and as a matter of principle doesn't oppose these methods to fight money laundering. The federation's position, as it has been from the start, is that the law societies, as statutorily authorized regulatory bodies, must regulate the conduct of lawyers. In this respect, the federation has moved to adopt another model rule on client identification and verification standards, which mirrors the FATF requirements. This model rule would respect the threshold between the constitutional and unconstitutional requirements imposed on lawyers when it comes to gathering information from clients.</p>\n<p data-HoCid=\"291049\" data-originallang=\"en\">The federation is working with the Department of Finance on the issues relating to client ID and record-keeping compliance procedures for legal counsel and is looking forward to a resolution of these issues.</p>\n<p data-HoCid=\"291050\" data-originallang=\"en\"> To sum up, the federation's view is this. The no cash rule and the client ID model rule will accomplish three goals. They will impose on lawyers a more rigorous standard than the requirements under the act. The rules will address the activities of lawyers as financial intermediaries, but form part of the extensive statutorily authorized regulatory regime for lawyers through law societies. As rules, law societies' regulations will respect the constitutional principles upheld by the legal profession for the benefit of the public.</p>\n<p data-HoCid=\"291051\" data-originallang=\"en\">The federation supports the goal of fighting money laundering and terrorist financing in ensuring the safety and security of Canadians, and any amendments to the current legislative regime must preserve the rights that have long been recognized as fundamental in Canadian society.</p>\n<p data-HoCid=\"291052\" data-originallang=\"en\">I'll be happy to answer any questions of the committee.</p>",
        "fr": "<p data-HoCid=\"291038\" data-originallang=\"en\">Merci beaucoup, monsieur le pr\u00e9sident et honorables membres du comit\u00e9.</p>\n<p data-HoCid=\"291039\" data-originallang=\"en\">La f\u00e9d\u00e9ration est heureuse de l\u2019occasion qui lui est donn\u00e9e de se pr\u00e9senter devant ce comit\u00e9 pour examiner le projet de loi <a data-HoCid=\"2374081\" href=\"/bills/39-1/C-25/\" title=\"An Act to amend the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Income Tax Act and to make a consequential amendment to another Act\">C-25</a>. Normalement, le pr\u00e9sident de la f\u00e9d\u00e9ration ou tout au moins le pr\u00e9sident de notre comit\u00e9 de l\u2019adh\u00e9sion \u00e0 la lutte contre le recyclage de l\u2019argent devrait \u00eatre ici aujourd\u2019hui, mais tout le conseil de la f\u00e9d\u00e9ration, y compris le pr\u00e9sident, est \u00e0 Vancouver pour une r\u00e9union du conseil. Je suis conseiller en politique au comit\u00e9 de l\u2019adh\u00e9sion \u00e0 la lutte contre le recyclage de l\u2019argent de la f\u00e9d\u00e9ration et c\u2019est moi qui vais repr\u00e9senter la f\u00e9d\u00e9ration aujourd\u2019hui.</p>\n<p data-HoCid=\"291040\" data-originallang=\"en\">La f\u00e9d\u00e9ration est l\u2019organisme coordonnateur des 14 ordres professionnels de juristes qui, comme vous le savez, sont charg\u00e9s dans chaque province et territoire de r\u00e9glementer l\u2019exercice du droit par les 88 000 avocats et avocates du Canada et les 3 500 notaires du Qu\u00e9bec dans l\u2019int\u00e9r\u00eat public.</p>\n<p data-HoCid=\"291041\" data-originallang=\"en\">La f\u00e9d\u00e9ration appuie les efforts faits par le Canada pour lutter contre le blanchiment d\u2019argent et le financement des activit\u00e9s terroristes. Elle reconna\u00eet l\u2019importance des objectifs de la loi sur le blanchiment de l\u2019argent et est d\u2019accord avec ses principes de base. Toutefois, les initiatives de lutte contre ces crimes, qui incluent l\u2019engagement international du Canada de se conformer aux prescriptions du GAFI, doivent \u00eatre men\u00e9es \u00e0 l\u2019int\u00e9rieur du cadre des valeurs et des principes constitutionnels sur lequel la soci\u00e9t\u00e9 canadienne repose, notamment la primaut\u00e9 du droit et, partant, le droit \u00e0 une magistrature ind\u00e9pendante et \u00e0 un conseiller juridique \u00e9galement ind\u00e9pendant.</p>\n<p data-HoCid=\"291042\" data-originallang=\"en\">Mes commentaires se limiteront aujourd\u2019hui \u00e0 deux aspects du projet de loi: l\u2019article 10.1 et l\u2019article 6.1.</p>\n<p data-HoCid=\"291043\" data-originallang=\"en\">Premi\u00e8rement, l\u2019article 10.1 est le nouvel article qui exempte les avocats des exigences de d\u00e9claration concernant les op\u00e9rations douteuses et les op\u00e9rations vis\u00e9es par r\u00e8glement. La f\u00e9d\u00e9ration est tr\u00e8s heureuse que cette exemption ait \u00e9t\u00e9 pr\u00e9vue dans ce projet de loi. Elle a mis en \u0153uvre sa propre r\u00e9glementation concernant les exigences de d\u00e9claration des op\u00e9rations douteuses et des op\u00e9rations vis\u00e9es par r\u00e8glement.</p>\n<p data-HoCid=\"291044\" data-originallang=\"en\">Comme vous le savez sans doute, les r\u00e8glements des divers barreaux interdisent aux avocats de recevoir ou d\u2019accepter des montants en argent de 7 500 $ ou plus, \u00e0 quelques exceptions pr\u00e8s, de clients ou d\u2019autres personnes. Ils vont en fait plus loin que de simplement exiger que les avocats d\u00e9clarent les op\u00e9rations: ils emp\u00eachent les avocats d\u2019accepter de l\u2019argent qui pourrait avoir n\u00e9cessit\u00e9 un rapport.</p>\n<p data-HoCid=\"291045\" data-originallang=\"en\">La f\u00e9d\u00e9ration est heureuse que cette exemption figure dans le projet de loi. Les exigences de d\u00e9claration, comme vous le savez sans doute, sont \u00e0 l\u2019origine de la contestation constitutionnelle de la loi sur le blanchiment d\u2019argent qui remonte \u00e0 2001, \u00e0 l\u2019issue de laquelle une injonction a soustrait les avocats \u00e0 l\u2019application de la loi en attendant l\u2019issue de l\u2019instance.</p>\n<p data-HoCid=\"291046\" data-originallang=\"en\">S\u2019agissant de blanchiment d\u2019argent et de financement des activit\u00e9s terroristes en rapport avec la profession d\u2019avocat, la f\u00e9d\u00e9ration est d\u2019avis que l\u2019int\u00e9r\u00eat public est le mieux servi quand ce sont les avocats qui prennent en main, par le biais de leur organisme d\u2019autor\u00e9glementation, les risques que leur profession pr\u00e9sente. Cela permet de pr\u00e9server l\u2019ind\u00e9pendance \u00e0 l\u2019\u00e9gard du gouvernement et de prot\u00e9ger les valeurs fondamentales de la profession d\u2019avocat, pour le b\u00e9n\u00e9fice du public. J\u2019ai d\u00e9j\u00e0 mentionn\u00e9 la r\u00e8gle anti-comptant qui interdit aux avocats d\u2019accepter 7 500 $ ou plus en argent de leurs clients. Les avocats doivent aussi tenir un registre des op\u00e9rations en esp\u00e8ces dans le cadre des exigences de tenue de documents qui leur sont impos\u00e9es.</p>\n<p data-HoCid=\"291047\" data-originallang=\"en\">Passons maintenant \u00e0 l\u2019article 6.1 du projet de loi, qui est une disposition habilitant \u00e0 prendre des r\u00e8glements sur les exigences d\u2019identification des clients et le devoir de vigilance relatif \u00e0 la client\u00e8le. Cet article d\u00e9coule des exigences du GAFI portant sur le resserrement des exigences concernant l\u2019identification des clients et le devoir de vigilance.</p>\n<p data-HoCid=\"291048\" data-originallang=\"en\">La f\u00e9d\u00e9ration reconna\u00eet l\u2019importance de l\u2019engagement pris par le Canada envers les normes du GAFI et elle ne s\u2019oppose pas, en principe, \u00e0 ces m\u00e9thodes de lutte contre le blanchiment d\u2019argent. La f\u00e9d\u00e9ration est d\u2019avis, comme elle l\u2019est depuis le d\u00e9but, que les ordres professionnels de juristes, en tant qu\u2019organismes de r\u00e9glementation, doivent r\u00e9gir la conduite des avocats. \u00c0 cet \u00e9gard, elle a d\u00e9cid\u00e9 d\u2019adopter une autre r\u00e8gle type sur les normes de v\u00e9rification et d\u2019identification des clients, qui refl\u00e8te davantage les exigences du GAFI. Cette r\u00e8gle type respecte la limite entre les exigences constitutionnelles et les exigences non constitutionnelles impos\u00e9es aux avocats lorsqu\u2019il s\u2019agit d\u2019obtenir de l\u2019information des clients.</p>\n<p data-HoCid=\"291049\" data-originallang=\"en\">La f\u00e9d\u00e9ration collabore avec le minist\u00e8re des Finances \u00e0 l\u2019examen des questions li\u00e9es aux proc\u00e9dures en mati\u00e8re d\u2019identification des clients et de tenue de documents que doivent suivre les conseillers juridiques pour \u00eatre conformes \u00e0 la loi et attend avec impatience un r\u00e8glement de ces questions.</p>\n<p data-HoCid=\"291050\" data-originallang=\"en\">Pour r\u00e9sumer, voici la position de la f\u00e9d\u00e9ration. La r\u00e8gle anti-comptant et la r\u00e8gle type d\u2019identification des clients permettront d\u2019atteindre trois objectifs. Elles imposeront aux avocats une norme plus rigoureuse que les exigences actuellement pr\u00e9vues dans la loi. Elles viseront les activit\u00e9s des avocats \u00e0 titre d\u2019interm\u00e9diaires financiers, tout en s\u2019inscrivant dans le r\u00e9gime r\u00e9glementaire plus g\u00e9n\u00e9ral auquel sont assujettis les avocats par le biais des barreaux. En tant que r\u00e8gles, les r\u00e8glements des barreaux respecteront les principes constitutionnels que soutient la profession d\u2019avocat pour le b\u00e9n\u00e9fice du public.</p>\n<p data-HoCid=\"291051\" data-originallang=\"en\">La f\u00e9d\u00e9ration appuie la lutte contre le blanchiment d\u2019argent et le financement des activit\u00e9s terroristes qui vise \u00e0 assurer la s\u00e9curit\u00e9 et la s\u00fbret\u00e9 des Canadiens, et tout amendement au r\u00e9gime l\u00e9gislatif actuel doit pr\u00e9server les droits reconnus depuis longtemps comme fondamentaux dans la soci\u00e9t\u00e9 canadienne.</p>\n<p data-HoCid=\"291052\" data-originallang=\"en\">Il me fera plaisir de r\u00e9pondre aux questions du comit\u00e9.</p>"
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    "url": "/committees/finance/39-1/48/james-varro-1/",
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    "source_id": "1751127",
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