06 Oct 2016
In 2015, the Supreme Court of Canada ruled that, unlike other professionals such as bankers and real estate agents, lawyers do not have to report to Canada’s anti-money laundering agency, Fintrac. Lawyers in B.C. won that case based on a constitutional argument about solicitor-client privilege, and the argument that law societies already regulate lawyers to prevent involvement in money laundering.
But Canada faces increasing international scrutiny as concerns over money laundering in Vancouver real estate grow. In September, the Financial Action Task Force, a Paris-based intergovernmental group that makes recommendations for fighting money laundering, asked Canada to close the lawyer loophole. An agency report suggested there is a close relationship between money laundering in real estate and the services provided by lawyers, such as placing wire transfers in legal trusts and creating investment vehicles that can shield true ownership of property.
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