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Raymond Doray

Raymond Doray. Conflicts between the new Canadian Money Laundering Act and the rules of professional conduct and ethics September 13, 2002. Scope of the Money Laundering Act. Banks Cooperative credit societies, savings and credit unions and caisses populaires regulated by a provincial act;

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Raymond Doray

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  1. Raymond Doray Conflicts between the new Canadian Money Laundering Act and the rules of professional conduct and ethics September 13, 2002

  2. Scope of the Money Laundering Act • Banks • Cooperative credit societies, savings and credit unions and caisses populaires regulated by a provincial act; • Life insurance companies; • Trust and loan companies; • Trust companies regulated by a provincial act; • Loan companies regulated by a provincial act;

  3. Scope of the Money Laundering Act(continued) • Persons engaged in the business of dealing in securities, including portfolio management and investment counselling; • Persons engaged in the business of foreign exchange dealings; • Persons engaged in a business profession or activity described; • Lawyers, accountants and real estate agents; • Casinos and the employees of said entities.

  4. Examples of Common Indicators • General • Client does not want correspondence sent to home address; • Client appears to have accounts with several financial institutions in one area for no apparent reason; • Client repeatedly uses an address but frequently changes the names involved; • Client shows uncommon curiosity about internal systems, controls and policies.

  5. Examples of Common Indicators • Identity Documents • Client provides doubtful or vague information; • Client refuses to produce personal identification documents; • Client only submits copies of personal identification documents; • Client wants to establish identity using something other than his or her personal identification documents; • All identification presented is foreign or cannot be checked for some reason; • All identification documents presented appear new or have recent issue dates.

  6. Examples of Common Indicators • Knowledge of reporting or Record Keeping Requirements • Client makes inquiries that would indicate a desire to avoid reporting; • Client has unusual knowledge of the law in relation to suspicious transaction reporting; • Client seems very conversant with money laundering or terrorist activity financing issues; • Client is quick to volunteer that funds are “clean” or “not being laundered”.

  7. Examples of Common Indicators • Cash Transactions • Client starts conducting frequent cash transactions in large amounts when this has not been a normal activity for the client in the past; • Client frequently exchanges small bills for large ones; • Client makes cash transactions of consistently rounded-off large amounts (e.g., $9,900, $8,500, etc.)

  8. Examples of Common Indicators • Economic Purpose • Transaction seems to be inconsistent with the client’s apparent financial standing or usual pattern of activities; • Transaction is unnecessarily complex for its stated purpose; • Activity is inconsistent with what would be expected from declared business.

  9. Examples of Common Indicators • Transactions Involving Accounts • Opening accounts when the client’s address is outside the local service area; • Opening accounts in other people’s names; • Opening accounts with names very close to other established business entities; • Account with a large number of small cash deposits and a small number of large cash withdrawals.

  10. Examples of Common Indicators • Transactions Involving Areas Outside Canada • Client and other parties to the transaction have no apparent ties to Canada; • Transaction crosses many international lines; • Use of a credit card issued by a foreign bank that does not operate in Canada by a client that does not live and work in the country of issue; • Transactions involving countries deemed by the Financial Action Task Force as requiring enhanced surveillance, including the Republic of Nauru.

  11. Suspicious transaction report • Information on Place of Business where Transaction Occurred • Account information (where applicable) • Information on Individual Conducting Transaction

  12. Suspicious transaction report • Information on Person or Entity Other Than an Individual on Whose Behalf Transaction is Conducted (where applicable)

  13. Suspicious transaction report • Information on Individual on Whose Behalf Transaction is Conducted (where applicable)

  14. Suspicious transaction report • Description of Suspicious Activity

  15. Suspicious transaction report • Action Taken (where applicable)

  16. Rules of professional conduct • The Money Laundering Act conflicts with the Rules of professional conduct: • Solicitor/Client privilege • Duty of confidentiality • Duty of candor • Obligation to report • Conflicts of interests

  17. Constitutional principles raised in legal challenge • Independence of the Bar • Freedom of speech • Freedom to communicate with client • Protection against compelled speech • Life, Liberty and Security • Right to privacy • Solicitor-client privilege • Protection against self-incrimination • Protection against unreasonable search and seizure

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