Law Society Rules 3-98 to 3-109 require lawyers to follow client identification and verification procedures when providing legal services. Failure to comply can have significant disciplinary, actuarial and financial consequences. You must enter into a written agreement or agreement with the agent if you wish to rely on an agent`s due diligence of a person. In hindsight, the verification information should match what the customer provided to you when you received their basic credentials. You must verify that the information is valid (genuine and unaltered) and up-to-date (not expired) and that the officer has verified the individual`s identity by an acceptable method (such as government-issued photo identification). For example, if the officer used an expired driver`s licence to verify the person`s identity, this is unacceptable. Note the date you will receive the officer`s verification confirmation, as it will indicate whether the information is current and how quickly the review must be completed in relation to the “financial transaction” (Rule 3-105). New Client Verification and Funding Source Requirements, Winter 2019 Advisors` Bulletin (pp. 13 -17) While client identification and verification usually only needs to be done once for a client, a lawyer who has not followed the rules for the client must do so, regardless of who the client is or what the client`s relationship is with the lawyer. A lawyer is required to know his client, understand the client`s financial transactions in advance and manage all risks arising from the professional business relationship with the client. The Law Society Rules, Part 3, Division 11, Rules 3-98 to 3-110 require lawyers to follow client identification and examination procedures when engaged by a client to provide legal services. There are six main requirements: You do not need to verify the identity of an individual for subsequent financial transactions if you (or a member or employee of your firm or representative) have already ascertained the identity of the person using one of the verification methods in Part 3 – Section 11 and have retained the required records and documents (Rules 3-107).
This assumes that there is nothing suspicious and that you have no reason to believe that the information or its accuracy has changed. A key element of client verification is that lawyers must obtain information from the “client” and record the source of the “money” with the applicable date if it is a “financial transaction”. (See rule 3-98 for words in quotation marks.) If you are acting as an agent for a lawyer who is not a British Columbia lawyer or a “cross-jurisdictional lawyer”, you must apply the client identification and verification rules to both the foreign lawyer and that lawyer`s client. For example, if you work for a Seattle attorney for someone in Seattle, if it`s a “financial transaction,” you must enter into a written agreement or agreement with an agent to verify the identity of clients. See Using an agent to verify identity. A law firm is an “organization” (as defined in Rules 3-98). Client identification and verification rules apply in the same way as if they were maintained for the provision of legal services to an organization. Remember that you need to apply the rules not only to the organization itself, but also to the person hiring you on behalf of the law firm. If a potential new buyer has been referred to you by a lawyer outside your firm and you intend to act on behalf of the client, you should obtain the client`s consent to speak to the referring lawyer.
Not only do you want to thank the lawyer for the transfer, but you can also find out if the transfer was genuine. Unfortunately, scammers sometimes use a dismissal as a ruse in the hope that a lawyer will let their guard down. Assuming the transfer was genuine, below are some tips on how to apply the customer identification and verification rules. 3-104(7) A lawyer may rely on a representative`s screening of a particular client if, at the time of the examination, the agent In this case, the other lawyer for whom you would act as a representative is your client. Client identification and verification rules apply in the same way as if they were used to provide legal services to an individual. In addition, the client of the Kamloops lawyer is also your “client” (as defined in rules 3-98). If another lawyer in British Columbia or an “inter-jurisdictional lawyer” (a member of a governing body licensed to practise law in another Canadian jurisdiction) has complied with rules 3-100 to 3-106 or equivalent provisions of another Canadian jurisdiction and has retained the information and documents, you do not need to re-identify and verify the client`s identity. if you are acting in relation to a “financial transaction”, unless you have reason to believe that the information or its accuracy has changed (rules 3-99(2.1)(a), 3-100(2), 3-105(2), 3-106(2)). Know Your Client – Guidelines and Rules During COVID-19, Summer 2020 Advisors` Bulletin (pp.
18 -21) – contains the Notice to the Profession dated March 17, 2020 (COVID-19 Client Verification) Identification and verification are separate but related concepts in the rules. Client identification rules require a lawyer to make reasonable efforts to collect basic identifying information about a client if it is not disclosed. There are different obligations for individuals and organizations. If a lawyer believes that an exemption applies and no review should be conducted, the exemption and the basis for the lawyer`s conclusion must be recorded in the record. Rule 3-101 contains exceptions to the examination requirements. Some lawyers seem to believe that there are general exceptions for entire areas of activity such as assault or criminal defence. There are no such exceptions, nor pro bono work that involves a financial transaction. At this extraordinary time of serious public health issues with face-to-face meetings, the Law Society has provided advice on using a virtual means to verify the identity of an individual who is in Canada in unique circumstances. This virtual means is limited to situations where lawyers cannot avail themselves of any of the verification methods provided for in the existing rules. The Q&A series is intended to help explain the requirements for identifying and verifying the customer. More information can be added later.
We recommend that you verify the customer`s identity again. Assuming there is nothing suspicious and that you have kept the necessary records and documents, you may find it logical to rely on due diligence, for example, if you have already negotiated a sale and purchase that resulted in the client`s change of address and you have the documents on file that support the change of address. We encourage you to review and update your client information (e.g., contact information, occupation) when conducting a financial transaction. Below are frequently asked questions about customer identification and verification requirements. Obtaining customer credentials and verification documents may seem unnecessary in the case of family, friends, or long-time acquaintances or business partners, but there are no exceptions for these customers. Lawyers can choose to use any form with their clients, and such forms can be very useful. A signed statement in the files does not always mean that a lawyer has met the requirements of the Code and the Rules in all circumstances. Lawyers are required to use their professional judgment to assess risks related to client identification and verification, financial transactions and the origin of funds, and to ensure that they have taken reasonable steps to address these risks. While lawyers are not required to report to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), your developer client may be required under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its regulations to keep records of certain financial transactions. verify the client and meet other detailed requirements, including reporting to FINTRAC.
prevent money laundering and terrorist financing. It would be wise to know if your customer is aware of the requirements. Although the buyer`s deposit was paid through a real estate agent and a commercial agent who acts as an agent for the purchase and sale of real estate, registered and licensed by the province, these professionals also have obligations under the law. FINTRAC offers guides for developers, brokers and real estate agents on its website. Client verification rules apply when a lawyer receives, pays or transfers money on behalf of a client or gives instructions on behalf of a client regarding the receipt, payment or transfer of money. The audit rules require a lawyer to take reasonable steps to ascertain a client`s identity against documents that the lawyer reasonably believes to be reliable and independent documents, data or information. Requirements for the verification of individuals and entities vary depending on the type of transaction and entity. Subsection (7) was repealed with effect from 1. January 2020 added to Rule 3-104, which allows lawyers to rely on a representative`s due diligence of an individual client in the following circumstances: For practical reasons, lawyers should obtain and record information about the source of funds closer to the beginning of the advance as part of the client identification and verification process, because it is a key element in the fight against money laundering and participation in an activity. supports or encourages dishonesty, crime or fraud.