Evidence of meeting #48 for Finance in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was lawyers.
A recording is available from Parliament.
1:15 p.m.
Bloc
Thierry St-Cyr Bloc Jeanne-Le Ber, QC
Mr. Skolrood, you spoke briefly about the rules that already exist to limit the cash amounts lawyers can accept. I would like to know if this provision is part of the legislation? Is it a legal obligation, or are these requirements set out in a code or rules of professional conduct?
1:15 p.m.
Chair, National Constitutional and Human Rights Law Section, Canadian Bar Association
Right now the primary requirement in place involves large cash transactions and, as Mr. Varro said, prohibits lawyers from accepting large cash transactions. Those requirements are set out in the professional conduct rules passed by the different law societies. But those rules do have their basis in legislation in that each of the legal profession acts, which set up the self-government regimes in each province, authorized the making of those rules. They have their roots in legislation, but they are found in rules, which have a binding affect on lawyers.
1:15 p.m.
Bloc
Thierry St-Cyr Bloc Jeanne-Le Ber, QC
Essentially, we’re talking about restrictions on professional conduct; that is, a professional society can expel one of its members, it could legally sanction a member who does not comply with these aspects of the code of professional conduct. However, the member would not be subject to criminal prosecution for this type of activity.
1:15 p.m.
Chair, National Constitutional and Human Rights Law Section, Canadian Bar Association
Certainly the law society has the ability to discipline the lawyer, and the ultimate sanction is to expel them from the profession. But it's useful to keep in mind that lawyers are also subject to other laws of general application like the Criminal Code, so if his or her conduct were found to be criminal in nature, the lawyer would certainly be subject to prosecution.
1:15 p.m.
Conservative
The Chair Conservative Brian Pallister
Thank you very much, Mr. St-Cyr.
We'll continue with Mr. Wallace.
1:15 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
Thank you, Mr. Chairman. I have a number of questions and I'll just work my way down the aisle.
Mr. Burbidge, I was really interested in your comments. We had some suggested amendments from our previous panel. It sounded to me as if you were in disagreement with those previous amendments. Could you clarify that for me? Is it in your presentation, or is there a way of getting us copies of why you disagree with those amendments?
1:15 p.m.
Senior Director, Compliance Division, Office of the Superintendent of Financial Institutions Canada
I wouldn't describe the comments I made as necessarily disagreeing with them, but rather as adding a perspective from my role as head of our AML division at OSFI.
On the request to extend the FATF membership exemption to other countries, that's moving into a territory where I would not feel comfortable. There is a very wide level of disparate standards in those other countries, ranging from fairly good standards to quite underdeveloped standards.
1:15 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
Can you provide that to us in writing, or is that in your presentation? I was listening and not reading.
1:15 p.m.
Senior Director, Compliance Division, Office of the Superintendent of Financial Institutions Canada
I have to consider how best to get that information to you.
1:15 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
Okay. I think we need it by next Monday if somebody's going to move a change. I would appreciate it if you could do that for us.
1:15 p.m.
Senior Director, Compliance Division, Office of the Superintendent of Financial Institutions Canada
I understand.
You also asked about foreign branches and subsidy. My comment was that the bill adequately and appropriately addresses the difference between the Canadian branch in another country, which is a Canadian entity—as you heard Mr. Bernier say, it's an extension of the legal entity—versus a foreign subsidiary, which is creature of foreign law. It's appropriate to apply a standard, and in our work we do this all the time. We look at offshore operations of our banks and apply standards. We don't necessarily expect Canadian laws to apply, so we apply what we consider to be safe and sound standards of behaviour.
1:15 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
I appreciate that.
As usual, we have three lawyers to give us one message.
I just want to be clear, because there was discussion at committee last week that the legal profession, the law societies, and the law organizations are happy with the exemption that occurs in the present legislation. I just want to get it completely on the record that I understand it correctly.
1:15 p.m.
Policy Counsel, Anti-Money Laundering Committee, Federation of Law Societies of Canada
That's correct.
1:15 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
So you are not recommending any changes to the present bill as it sits in front of us.
1:20 p.m.
Policy Counsel, Anti-Money Laundering Committee, Federation of Law Societies of Canada
The federation is not proposing any changes.
1:20 p.m.
Conservative
1:20 p.m.
Chair, National Constitutional and Human Rights Law Section, Canadian Bar Association
We are not proposing any on that.
1:20 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
I have a question for Mr. Boyce and it has nothing to do with income trusts, thank God.
You talked about risk, which we've heard a little about. You want risk-based regulation. On changing the actual bill—my responsibility here hopefully next week will be clause-by-clause—do we need new wording to reflect risk-based regulations, or is it there already?
Second, do you have a definition of low risk?
1:20 p.m.
Vice-President, Sales Compliance and Registration, Investment Dealers Association of Canada
The general approach to risk-based regulation is to establish standards and procedures. It's very difficult to define because it tends to be contextual, and five or six different factors can be taken into account, such as the country, the nature of the transaction, and the type of customer. An attempt has been made in the current regulations to actually define low risk, and it has picked out a few isolated types of transactions.
The risk-based approach would generally allow financial institutions to bring their knowledge to bear and look at the specific factors on a case-by-case basis. There would be certain minimum standards, but it would also be based on guidance that would presumably come with it.
1:20 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
But that should be done in regulation, not in the bill, is that correct?
1:20 p.m.
Vice-President, Sales Compliance and Registration, Investment Dealers Association of Canada
It can largely be done in regulation, to the extent the bill permits it. My concern is that proposed section 9.6 talks only about adding procedures for high-risk accounts, rather than having leeway to reduce them for low-risk accounts. The regulations thus far have been extremely prescriptive: they do this in this situation, or for this type of client.
November 2nd, 2006 / 1:20 p.m.
Conservative
Mike Wallace Conservative Burlington, ON
I appreciate that.
My final question is for the senator. It's fairly simple. And thank you for coming.
You indicated during a couple of responses that we could study this and study that...there are some other areas. Is it not important for our country to have this law in place before we are reviewed by our international partners in the early winter? If there are other areas for improvement in this legislation, that could be done after we pass Bill C-25. Then we can look at other issues, as a finance committee.
1:20 p.m.
Chairman, Standing Committee on Banking, Trade and Commerce, Senate
I understand the position of the government on this. The government is going to take charge of this international organization that in effect supervises FINTRAC. I don't quarrel with that; I think that's a major step forward. Obviously the government will want to demonstrate to the world that if it's taking leadership, its domestic legislation is in place.
But having said all that, if it takes another day or two, I think that while you have the bill before you, it's important for the committee to tighten it up. There are some obvious things I think you can do. When it comes to us, I can tell you, we will take our time.
My experience has been that this is a hot, important political issue that affects the economy of the country. Far be it from me to say this, but I think the public really wants to know how members of the Commons feel about these issues and how their expertise will bear upon solutions. There has to be strong concurrence on all sides of the House for a piece of legislation like this.
If I were you, I'd take a few more hours and be a little more careful. There are things to do.
I'll point out another issue that I think is important for the economy to work effectively. The general accountants have a concern that they're being called upon to be cops and, in effect, to invite investigations without clear guidelines. That's not fair. I don't understand why there aren't some guidelines, either proposed or otherwise, so that accountants can come within the guidelines without interfering with their relationship with their clients.
This is quite complicated, and I think you should address some of these complications.
1:20 p.m.
Conservative
1:20 p.m.
Conservative
The Chair Conservative Brian Pallister
Thank you, Mr. Wallace. Thank you, Mr. Grafstein.
We'll continue now with Madam Wasylycia-Leis.