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Responsibilities of the Profession re: Anti Money Laundering

The government of Canada recently released a comprehensive report on money laundering and terrorist financing risks in Canada. For your information and review, a copy of that report, titled “Assessment of Inherent Risks of Money Laundering and Terrorist Financing in Canada,” can be found at the following link:

The report concludes that legal professionals are exposed to “high to very high” inherent risk scenarios for money laundering due to the nature of the products and services they provide. Mortgage fraud is specifically identified as one of nine activities that pose a high threat and real estate transactions in general are noted as providing many opportunities for the witting or unwitting involvement of members of the legal profession in money laundering. The report also concludes that the legal profession has a high vulnerability to terrorist financing activities, in part through potential use of their trust accounts. While there are regulatory measures in place, such as the “No-Cash” and “Client Identification and Verification” rules (the “Model Rules”), the success of these depends on compliance.

Members are reminded of the importance of compliance with the “Client Identification and Verification” and “No-Cash” rules and are encouraged to review the “Mortgage Fraud – Red Flags” document previously circulated and available on the Law Society’s website.