The outgoing CEO of the Law Society of BC met Dec. 9 with the Financial Transactions and Reports Analysis Centre of Canada to discuss creating an information sharing agreement.
The centre, known as Fintrac, is the federal agency tasked to observe and report financial transactions suspected of facilitating money laundering and terrorist financing to law enforcement for further investigation.
The society’s CEO and executive director Don Avison met with Fintrac in the wake of a special bulletin published in October from the centre advising that “professional money laundering schemes may rely on the involvement of a legal professional.”
The bulletin noted lawyers are not reporting entities to Fintrac — unlike bankers, accountants, securities dealers and mortgage brokers — having won the right, in a landmark Supreme Court of Canada decision, to protect solicitor-client privilege.
Fintrac receives both suspicious and large cash (over $10,000) transaction reports. The former typically relies on know-your-client policies.
And so, the bulletin warns that although the vast majority of lawyers and law firms undertake legitimate transactions, “this gap in legislative anti-money laundering and counter-terrorist financing oversight may attract professional money launderers, organized crime, and transnational organized crime groups who seek to exploit the sector to move and mask illicit funds and activity.”
The misuse of trust funds was highlighted as a concern, particularly concerning real estate transactions. Proceeds of crime may flow through trust accounts to purchase properties, without a report to Fintrac from the lawyer's end, the bulletin notes.
While lawyers and their firms need not report trust transactions to Fintrac, the centre is nevertheless in receipt of reports linked to legal professionals when money is transferred to reporting entities, such as banks, for example.
“In 2022-23, an estimated 615,000 large cash transaction reports and electronic funds transfer reports involved legal professionals with combined transaction values totalling $110 billion, reflecting only a part of the sizeable role legal professionals and law firms play in Canadian economic activity.
“In that same year, approximately 2,400 suspicious transaction reports submitted to Fintrac by reporting entities within Canada’s anti-money laundering and anti-terrorist financing regime referenced transactions involving legal professionals and/or law firms.”
Avison told the society’s board (benchers) in July that he had never heard from Fintrac during his time as CEO.
In September, Avison provided the board with his monthly report, stating he “was of the view that the information chain between Fintrac and Canada’s law societies was less than what it ought to be, particularly as legal regulators act as investigative entities in anti-money laundering activities.”
Avison said an information sharing agreement would be in line with the 2022 recommendations from the Commission of Inquiry into Money Laundering in B.C.
Avison declined an opportunity to explain his meeting to Glacier Media.
Avison was appointed CEO and executive director in December 2017. He is being replaced by Gigi Chen-Kuo on Jan. 6, 2025.
Chen-Kuo most recently served as the chief operating officer of TransLink where she also held leadership positions such as general counsel and executive vice-president of corporate services.
