Lawyers and Money Laundering Regulation: Testing the Limits of Secrecy in Canada

Abstract

Global money laundering regulation aims to suppress crime by tackling its financial underpinnings. It has achieved considerable prominence in a world beset by a renewed appreciation of terrorism and the tying of terrorist finance into the mix of evils confronted by this strategy. It has drawn a series of new actors into the ranks of crime prevention: financial institutions, industries rich in cash transactions and professionals whose work touches upon virtually any form of financial activity. Lawyers have recently been drawn into this mix. Applied to legal counsel, money laundering regulation introduces considerable tension. Unlike other professional persons or entities, lawyers are integral parts of the legal system. They owe duties to their private clients, to the public and to the mechanism of law that organizes society. It is a tension that is currently the subject of legal proceedings, testing the limits of lawyers’ ability to keep secrets from scrutiny by state. This article examines the trajectory of the intersection of lawyers and money laundering regulation in Canada. The first section introduces the broad context within with the national developments occurs, the global regulation of money laundering. Section 2 narrows those developments to those applicable to legal counsel. Section 3 tracks anti-money laundering regulation in Canada, the explicit involvement of lawyers in the detection of tainted financial activity and the resistance of the legal establishment. Section four examines the second round of Canadian efforts to implicate lawyers in regulation, a debate that continues. The final section locates this collision within the wider context of money laundering regulation and the legal profession.