LAWYERS READY TO FIGHT GOVERNMENT OVER DIRTY-MONEY LEGISLATION

Canada's lawyers are bracing for a fight with the Conservative
government if they are forced to report large cash payments from
their clients to a federal anti-money laundering agency, a prospect
they say violates solicitor-client confidentiality.

Finance Minister Jim Flaherty has signalled that he intends to
introduce legislation, possibly this fall, to toughen existing
federal laws against terrorist-group financing and money laundering
in order to bring them up to international standards.

Lawyers suspect that the government intends to eliminate a concession
they secured more than three years ago, when the then-Liberal
government exempted the legal professional from dirty-money
legislation that required financial institutions and other
intermediaries to report suspicious cash transactions and those over
$10,000 to a central government agency called the Financial
Transactions Reports Analysis Centre of Canada (FINTRAC).

Edmonton lawyer Scott Watson predicted yesterday that the lawsuit
will be revived if the government tries to force lawyers to "rat" on
their clients.

"If there is going to be a reintroduction of legislation ... I
suspect it might go before the courts again," said Mr. Watson,
president of the Canadian Bar Association's Alberta branch.
"Solicitor-client confidentiality is absolutely critical."

Vancouver lawyer Ron Skolrood said that courts across the country
have already sent a "clear signal" that they have a problem with
forcing lawyers to report their financial transactions.

The RCMP and other critics have said that the lawyers' exemption from
the law is a major gap or loophole in the fight against rooting out
dirty money.

Eric Richer, a spokesman for Mr. Flaherty, said that the government
will introduce new measures "at the earliest opportunity that will
improve monitoring and enforcement and strengthen FINTRAC's
intelligence efforts."