Proceeds of Crime
The proceeds of crime legislation passed in 2001, Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c. 17, sought to impose greater reporting requirements on lawyers. The Federation of Law Societies was successful in obtaining an injunction against the legislation until the legal challenge of the legislation was resolved. In September, 2011, the BC Supreme Court determined that the legislation was unconstitutional as it violated s. 7 of the Charter (see Federation of Law Societies of Canada v. Canada (AG), 2011 BCSC 1270.
In April 2004, in part as a response to the federal government's concern that the proceeds of crime legislation did not apply to lawyers, the Benchers adopted Rule 3-59 relating to money laundering. Under the Rule, you are now prohibited from accepting an aggregate amount of $7,500 or more in cash in a single transaction or client matter, except if you receive the money:
- from a law enforcement agency;
- from a savings institution or public body;
- to pay a fine or penalty;
- pursuant to a court order;
- in your capacity as a lawyer as an executor of a will or administrator of an estate;
- as professional fees or disbursements; or
- as bail money.
If you receive more than $7,500 in cash for professional fees, disbursements, expenses, or bail, and you wish to make a refund greater than $1,000 out of that money, the refund must be made in cash.