Clients welcome new identification standards

Ontario lawyers have been held to strict new identification standards for nearly a month now, and they tell Law Times that clients have welcomed the new measures aimed at cracking down on money laundering.

“We had a lot of clients proactively get in touch with us and say, ‘Okay, tell us what you need, we’ll give you everything so you have it,’” says Blake Cassels & Graydon LLP lawyer Jacqueline Shinfield. “So the response has been quite favourable.”

Meanwhile, it appears that the law society will introduce amendments this month aimed at clarifying the rules.
The new requirements, which came into force Dec. 31, 2008, call on lawyers to obtain a client’s full name, home address, home phone number, occupation, and, if applicable, business address and business telephone number when opening an account.

When dealing with organizations, lawyers must get incorporation numbers and place of issue of that number; details on the organization’s activities, unless the organization is a financial institution, public body, or non-private company; and the name, position, and contact information of any individuals authorized to give instructions on the matter being dealt with.

New standards also were put in place for verification during financial transactions.
The regulations, which also apply to paralegals, are based on a model rule developed by the Federation of Law Societies of Canada. Law societies across the country are now implementing the model rule to create a national standard.

“We have hosted a teleseminar and have been pushing out other educational material to lawyers,” says law society communications director Roy Thomas. “But it’s really too early yet to know more than that, in terms of how it’s going or how it’s going to go.”

Shinfield, who specializes in anti-money laundering legislation, is a member of a committee made up of lawyers from Toronto firms that has met with the law society on the regulations. The committee hoped to “get certain amendments to the rules to make them more properly reflect what’s required, and make them operate in a more practical fashion,” she says.

She’s also the go-to person for her firm’s implementation of the rules. Blakes has amended its new-client forms, sent a bulletin to its existing clients, and conducted educational sessions with lawyers. Shinfield also has created a checklist to aid lawyers in meeting the verification requirements for financial transactions.
“I get a lot of questions,” she says. “At this point, I’m getting five to seven questions a week.

But this is just bumps. As the new forms become more familiar, I think a lot of the questions, hopefully, will be negated.”
While the bulk of the now-mandatory information was previously collected by firms, Shinfield says lawyers aren’t used to chasing down business identification numbers and jurisdictions of incorporation.

“When you figure out what’s required, it’s not a difficult step to get that information,” she says.
Brockville lawyer Mike Johnston is leading the way on the new rules for his four-lawyer office. He says the requirements have added a new level of administrative expense, with he and his staff putting in “a few extra hours” to comply.

But not a single client has resisted his request for personal information, says Johnston, who is a member of the County and District Law Presidents’ Association executive and helped prepare that organization’s position on the rules. He’s hoping to keep things simple by asking for the information from each client he deals with.

While the requirements are causing some short-term inconvenience, the added effort will likely pay off down the road, he says.
“The proof will be three, four years from now when my receptionist is able to say, ‘No, we’ve already got that,’” says Johnston.

Shinfield says the law society is expected to amend some of the new requirements at Thursday’s Convocation meeting.

“There are potential amendments being proposed, that I believe are going before Convocation from the perspective of Ontario on the 29th of January,” she says. “Once those changes are implemented, I think as real issues come up in implementing those rules, perhaps further changes will be contemplated.”

Shinfield says the amendments are largely aimed at clarifying the rules. But she notes that they are meant to be similar countrywide, and that any amendments must be in line with that call for uniformity.

She ends with a quick note to counsel hoping to pass the buck in terms of getting in line with the requirements.
“You can’t shelter behind your firm,” she says. “It’s your own responsibility, and you have to be informed and advised of these rules, and understand the requirements and implications.”

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