Combatting financial crime

  • October 31, 2023

The federal government is consulting on the best ways to improve the country’s anti-money laundering and anti-terrorist financing regime. The Business Law, Charities and Not-For-Profit Law, Criminal Justice, International Law, Privacy and Access Sections, Ethics and Professional Responsibility Subcommittee, and Anti-Corruption Team (CBA Sections) made several recommendations in a comprehensive submission. The most salient are summarized here.

Recognizing that money laundering and terrorist financing pose a real threat to the economic and physical safety of Canadians, the CBA fully supports the fight against financial crime. The submission addresses how the regime generally applies in the business and charitable sectors, as well as how it applies to the legal profession.

Legal profession

There already exist comprehensive anti-money laundering and anti terrorist financing (or AML/ATF) regulations on the legal profession, through law societies. It is not correct to say that there is an absence of obligations for lawyers. The letter notes that the law societies have extensive investigative powers. Legal professionals are also subject to criminal laws.

However, AML/ATF rules and regulations must be applied in ways that respect solicitor-client privilege and lawyers’ duty of commitment to their clients.

The CBA supports the collaborative approach of recent years between the government and the Federation of Law Societies of Canada “to explore money laundering and terrorist financing in the legal profession and strengthen information sharing between law societies and the Government of Canada,” specifically by sharing information and data, trends and money laundering typologies, compliance and enforcement.

Criminal measures

The CBA Sections say the government should consider sentencing reforms for the offence of laundering proceeds of crime. In their view, stronger penalties would increase deterrence as well as respect for the rule of law, among other benefits.

The submission expresses surprise at the government consultation including warrantless access to customer information, since it is not clear there is a connection between that and investigation and enforcement of ATM/ATF laws. “The CBA has consistently called for judicial pre-authorization for the seizure of subscriber information.”

In addition, the Sections point out that to be constitutional, “any demand for subscriber information must be authorized by a judge, made in exigent circumstances or be based on a reasonable law.” There are already Criminal Code sections that provide for judicial authorizations in the early stages of investigations with low thresholds of suspicion.

“If the police do not have reasonable grounds to suspect that an offence has been or will be committed and the recipient of the order will afford evidence, they should not be able to obtain this information,” the letter reads.

As well, when thinking about modernizing search powers to take into consideration electronic devices such as mobile phones, we should think about strengthening privacy protections, not weakening them.

“This consultation offers a further opportunity to reiterate the importance of respecting Canada’s constitutional framework, including solicitor-client privilege,” say the CBA Sections. As the Supreme Court of Canada ruled in Lavallee, privilege is a positive feature of law enforcement, not an impediment to it. “We are concerned that this positive feature is too often viewed as a principle that results in time-consuming or otherwise challenging processes in investigations, rather than as a foundational principle in our democratic society and fundamental to the rule of law,” explains the CBA letter.