CRACK DOWN ON LAWYERS: FINANCIAL CRIMES EXPERT

Money Laundering

As government officials prepare to meet with lawyers' groups to end an
impasse over Canada's anti-money laundering rules, a leading specialist on
financial crimes says excluding lawyers from tough new reporting
requirements leaves the door wide open for gangsters to access their dirty
money.

Until the government starts throwing lawyers in jail for helping criminal
clients wash their money, there will be no serious impact on financial
crimes in Canada, said Jeffrey Robinson, a London-based money laundering
specialist and prolific author on financial crimes.

"It is a huge hole," Mr. Robinson told the National Post. "If you start
throwing Canadian lawyers in jail, things would change radically."

The comments come as officials with the departments of Justice and Finance
prepare to meet with representatives of the Federation of Law Societies and
the Canadian Bar Association on Friday in Victoria to try to work through
deep divisions on the issue.

Lawyers won a series of court-ordered exemptions from the government's
Proceeds of Crime (Money Laundering Act) that require a long list of
bankers, accountants and other financial intermediaries to report
suspicious transactions to the Financial Transactions and Reports Analysis
Centre of Canada, a central tracking authority known as FinTRAC.

The government's act came into force two years ago and was immediately
challenged by lawyers' groups in the B.C. Supreme Court. That court granted
an injunction, exempting lawyers from reporting to FinTRAC until a full
hearing on the matter.

The government refused, however, to extend that exemption across Canada,
leading to challenges being mounted in seven provinces. After the lawyers'
groups won subsequent court injunctions in Alberta, Saskatchewan, Nova
Scotia and Ontario, plus two appeals, the government agreed to re-evaluate
the regulation.

Tomorrow's meeting is the first attempt to reach an agreement that will
tighten the money laundering regulations while not offending the courts and
the legal profession.

Maurice Laprairie, a Regina lawyer and chairman of the federation's task
force on the money laundering issue, said it is not that lawyers as
individuals feel they should be exempt from the law, but that regulations
should not intrude on solicitor-client privilege.

"They want to ask questions about our clients and that is the tricky part,"
he said yesterday. "For little if any benefit, the principles of a public's
right to legal protection is throw out. It's a case of little benefit--huge
harm."

In a submission to the House of Commons finance committee, the bar
association said: "The social cost of conscripting the legal profession
into the role of state investigators against their own clients is profound.
Clients must be able to seek the assistance of a lawyer knowing that the
information they communicate will remain with the lawyer and go no further."

Mr. Robinson, however, said it is of paramount importance to bring lawyers
into the suspicious transaction reporting regime.

The exclusion of lawyers allows criminals to take the money they acquire
through drug trafficking and other criminal acts and give it a clean
pedigree by moving it through accounts cloaked by lawyer's confidentiality
privileges, he said. And that allows gangsters to stay in business.

"A small number of lawyers would do it knowingly. A bigger number do it
unknowingly," Mr. Robinson said on a recent visit to Toronto.

"The basis of the legal system is that everybody is entitled to a lawyer to
defend him and protect his rights. And rightfully so. But there is a big
difference between that and when the lawyer becomes your business partner
to hide money. This is not a case of going after lawyers who are giving
legal advice to a client, this is, in essence, a business partner who
happens to have been to law school and works out of a law office," he said.

The Department of Finance remains determined to find a way to include
lawyers in the reporting regulations but is willing to work to find a less
confrontational way of doing it, said Andree Houde, department spokeswoman.

"The government has been working on some proposals that will hopefully meet
with the lawyers' approval," Ms. Houde said.

"We want to bring lawyers back onto the list. We remain committed to a
strong anti-money laundering regime that has all financial intermediaries
complying with reporting regulations and that includes the legal
profession," she said.