New Client Identification and Verification Requirements for
Lawyers
To support Canada’s fight
against money laundering and terrorist financing, the provincial governing
bodies for lawyers across Canada have (or shortly will be) adopting rules that
require lawyers to collect identifying information about their clients whenever
they are retained to provide professional services.
These rules apply to all
new retainers accepted as of January 1, 2009 for both new and existing clients.
While we already collect much of the required information in the normal course
of establishing a new retainer, in addition to basic identification
requirements, the rules require us to verify certain information when we are
handling funds on behalf of a client. A summary of the new identification
requirements is set out below.
Client Identification
For all new client
retainers (other than for individual clients) we will need the following
information:
- full name;
- business address and business
telephone number;
- incorporation or business
identification number and place of issue for clients other than Canadian financial
institutions, Canadian public bodies or reporting issuers or their eligible
subsidiariesi;
- a description of the general
nature of the business or activities engaged in by the client for clients other
than Canadian financial institutions, Canadian public bodies or reporting issuers or their
eligible subsidiariesі; and
- name, position and contact
information of the individuals who are authorized to give instructions
concerning the retainer.
If the client is an
individual, we will need the following information:
- full name;
- home address and home
telephone number; and
- occupation(s).
We are also required to
determine if our client is acting for (or representing) a third party and to
obtain the information set out above for that third party.
Client Verification
In certain circumstances,
the rules require us to take additional steps to verify our client’s identity
and, if our client is an organization, to obtain information about the
organization’s directors and certain of its shareholders.
The verification
requirement is triggered when we engage in, or give instructions about, the
receiving, paying or transferring of funds in connection with a retainer. For
example, verification is required if we hold monies in trust during the course
of a retainer other than for anticipated fees and disbursements. Exceptions to
this requirement include circumstances where the funds are:
- received, paid or transferred
through an eligible electronic funds transfer;
- paid to or received from a
financial institution, public body, or their eligible subsidiariesі;
- received from the trust
account of another Canadian lawyer;
- received from a public
official acting in his or her official capacity;
- paid or received pursuant to
a court order;
- paid to pay a fine or
penalty;
- paid or received as a
settlement in any proceedings; or
- received for professional
fees, disbursements, or expenses.
Please note that the
information that we collect in connection with these new rules is subject to
our client confidentiality and privacy policies.
Thank you in advance for
your understanding and cooperation.
(To view the Law Society
of Upper Canada’s new rules, please click here.)
i
Subsidiaries are treated in the same way as their parents if the results of the
subsidiary are consolidated on the parent’s financial statements.