Important Changes to the Anti-Money Laundering Rules for Manitoba Lawyers

[Reprinted with permission from the August 2019 edition of Communiqué, by Leah Kosokowsky, Director – Regulation at The Law Society of Manitoba.]

On January 1, 2020, rule changes affecting client identification and verification and the receipt of cash will come into effect.

What does this mean for you?

All firms need to review and revise their processes to ensure compliance with the existing and new rules. These rules are critically important in the international fight against money laundering and terrorism financing and thus compliance will be enforced robustly.

What help can you expect?

The Law Society of Manitoba will provide several education sessions with resource material to assist you. The education sessions will be provided at no cost and can be applied toward your annual continuing professional development requirements.

Why are we making these changes?

Lawyers must never knowingly assist in or encourage any dishonesty, fraud, crime or illegal conduct. As the Code of Professional Conduct puts it,

… a lawyer should be on guard against becoming the tool or dupe of an unscrupulous client or others and should be alert to and avoid unwittingly becoming involved with a client or others engaged in criminal activities such as mortgage fraud or money laundering.

Money laundering and terrorism financing are significant global problems. Lawyers and law firms do not want to knowingly or unknowingly allow clients to launder money by washing it through a lawyer’s trust account.

For some time, The Law Society of Manitoba has had two sets of rules in place, known as the “client identification and verification rules” and the “no cash rules”. These decade-old rules were based on model rules developed by the Federation of Law Societies in an effort to help lawyers prevent money laundering. Over the last several years Canadian law societies have identified that to be effective a more robust set of rules is required.

After consultation with the legal profession throughout Canada, the Federation of Law Societies changed the model rules in October 2018, which changes were adopted by The Law Society of Manitoba benchers in May of 2019. The new rule amendments are being drafted and will be finalized by the benchers this fall with an implementation date of January 1, 2020 for all Manitoba lawyers.

What Kind of Changes can you expect?

Receipt of Cash Rules

  • Additional definitions
  • Greater clarity
  • Fewer exceptions to the rule that prohibits lawyers from accepting cash in excess of $7,500.

Client Identification and Verification Rules

  • Greater clarity of the information that must be obtained and recorded when identifying clients on all files
  • New methods to verify a client’s identity on files where you are paying, receiving or transferring funds
  • Clarification of files exempt from verification
  • Removal of the “reasonable measures” standard for verifying identity
  • Obligation to inquire into the source of the funds
  • Reduced time to verify a client’s identity
  • Additional obligations when handling financial matters for corporations, businesses, trusts or other entities
  • Amendments relating to the use of agents
  • Ongoing monitoring obligations articulated

New Trust Accounting Rule

  • New rule expressly prohibiting lawyers from depositing any monies into trust other than trust money that is directly related to legal services that are being provided
  • This will eliminate the ability of lawyers to deposit fiduciary property into trust when acting solely in a representative capacity
  • No change to other recently enacted rules that place record keeping and reporting requirements on lawyers who act in representative capacity

To learn more, attend one of the three free education sessions offered by The Law Society of Manitoba this fall.

Richard J. Scott Award nominations due Friday, September 27, 2019.

The award honours former Chief Justice Richard Scott, who served as Manitoba’s Chief Justice for over 20 years and is a Past President of the Law Society of Manitoba.

The Richard J. Scott Award is presented annually by the Law Society of Manitoba to an individual who advances the rule of law through advocacy, litigation, teaching, research or writing. Activities that support an independent judiciary, an independent legal profession, access to legal services, access to justice, and public interest advocacy are all eligible.

Past recipients include:
Byron Williams (2013)
Irene Hamilton, Q.C. (2014)
Allan Fineblit, Q.C. (2015)
Jeff Hirsch (2016)
John Myers (2017)
Karen Dyck (2018)

The award is presented in conjunction with the annual Isaac Pitblado Lectures which take place on November 8, 2019.

The deadline for nominations is September 27, 2019.

Nominations can be sent to:

Chief Executive Officer
The Law Society of Manitoba
200 – 260 St. Mary Avenue
Winnipeg, MB R3C 0M6
or
by e-mail to Pat Bourbonnais
at pbourbonnais@lawsociety.mb.ca.

Nominations should be accompanied by the nominee’s c.v. and an explanation as to why the nominee deserves this award.

For more information, contact Kris Dangerfield at 204-926-2013 or by e-mail at kdangerfield@lawsociety.mb.ca.

Western Bar Annual CPD – September 6, 2019

Western Bar Annual CPD
September 6, 2019    |   9:00 a.m. to 12:00 noon
Elkhorn Resort & Conference Centre, Clear Lake, MB

*Special low registration pricing*
Lawyer – $55.00 (plus GST)
Student – $27.50 (plus GST) ~ 50%  Discount

REGISTER NOW

Two important topics will be covered:

1) New Anti-Money Laundering Rules

2) Well Being in Your Workplace: What Law Firms Can Do
Presenter: Honourable Judge Timothy Daley, Nova Scotia Provincial and Family Court

Includes 3 hours of CPD activity, including 3 hours of EPPM

Register for the Western Manitoba Bar Association AGM
and other events
before August 23, 2019. 

Read More



CPD Summer Replays

Have you ever attended a CPD Summer Replay? Why not take the opportunity to slow down and catch up on your CPD hours during the quieter summer months. 

Register today for one of these low-cost, in-person presentations.

Walk-Ins welcome!

These programs are replays of previously recorded live presentations offered in-person only in the Law Society Classroom. Lunch and refreshments are not included. Feel free to bring your own refreshments.

Programs include:

Avoiding Cyber Dangers

Procrastination and Professional Liability Insurance Claims

2018 Hot Topics in Real Estate

Renouncing U.S. Citizenship – Why, How and What are the Consequences?

And Much More

Lawyers and Vicarious Trauma

We recently wrote about the declaration of the Canadian Mental Health Association’s Mental Health Week. Lawyers as a group are notorious for ignoring mental wellness and self care. I came across this opinion piece titled “A more inclusive discussion on the impact of trauma on lawyers’ mental health is needed“, published in Canadian Lawyer Magazine, and thought it was a good way to continue the conversation. It was written by Crystal Tomasiuk, Crown counsel with B.C. Prosecution Services, and discusses the vicarious trauma lawyers deal with in their practice. Having sat in on a couple of criminal trials, I have wondered how lawyers deal with the sometimes horrific facts and scenes they are exposed to.

Vicarious trauma can affect those of any background. As important as it is to recognize our collective vulnerability in this way,  more is needed for a truly inclusive and trauma-informed approach. In particular, we need to face the prevalence of trauma in our society and explicitly address the fact that many of us come to the practice of law having already experienced significant trauma that may shape how our mental health is impacted by the pressures of the profession.

If you feel you’re suffering from vicarious trauma, or just the stress of the profession, the Law Society of Manitoba’s Health and Wellness program offers a free and confidential service for you and your family.