Closing loopholes in anti-money laundering laws could hurt clients' rights, says lawyer

A Vancouver lawyer and bencher with the B.C. Law Society says he's frustrated by reports that the federal governmentwants to close a loophole in its anti-money laundering system.

Craig Ferris said such aplan could contravene theconstitutional rights of clients.

Ferris was responding to reports thatOttawa intends to close the loophole,which would require lawyers to report financial transactions to the federal government.

"We're not talking about the rights of lawyers here,"Ferristold On the Coast's host Gloria Macarenko.

"We're talking the rights of citizens and that's the right to go see a lawyer, in confidence, to transmit privileged information and to know that your lawyer is not becoming an agent of the state by having it be required to transmit information back to the federal government."

Last year, the Supreme Court of Canada agreed with lawyers in a case that settled a 15-year battle. The court found that theparts of the law that give authorities sweeping power to search and seize files from lawyers' offices without a warrant carry an inherent risk of breaching solicitor-client privilege.

Law societiessetown rules

Law societies have established their own anti-money laundering rules and have been exempt from the current law while the case made its way through the courts.

Those rules prevent lawyers from accepting payments in cash over the amount of $7,500. Any transaction over that amount must be paid electronically, providing a record of payment.

The federal anti-money laundering agency, FINTRAC, only requires cash transactions of $10,000 or more to be reported, according to the government website.

"When you talk of an exemption, it's an exemption from the regulation of the federal government, it's not an exemption from regulation," Ferrissaid.

He was part of the team of lawyers that argued in front of the Supreme Court on this issue and says that the focus should be less on where the money is goingbecause much of that is documentedand more on where the funds are coming from.

"I hope the federal government will open up a dialogue with the Federation (of Law Societies), and if they have information that suggests that the rules need to be tightened that we work together to do that."

With files from the CBC's On The Coast

To hear the full interview listen to audio labelledFederal government looks to close loophole in anti-money laundering system