Mr. Speaker, I am pleased to have this opportunity to speak today on the third reading of Bill S-16, an act to amend the Proceeds of Crime (Money Laundering) Act.
On June 29, 2000, Bill C-22, or the Proceeds of Crime (Money Laundering) Act received royal assent. The purpose of this statute is to make it easier to prevent money laundering of the proceeds of crime by creating a financial transactions and reports analysis centre responsible for gathering, managing, analyzing and distributing reports of suspicious operations and any other pertinent information.
In fact, the inauguration of a mechanism for the reporting of suspicious transactions and major transborder capital transfers, as provided for in Bill C-22, was in response to the problems raised by the financial action group against money-laundering.
This would be a good opportunity to point out that the Bloc Quebecois had supported this government initiative, out of a concern to protect the Quebec population from the calamity represented by organized crime. Moreover, in order to make money laundering more inconvenient, the Bloc Quebecois were the ones behind the withdrawal of $1,000 bills and the requirement for banks and other financial institutions to report any suspicious financial transaction involving $10,000 or more in cash.
Before I go further, money laundering may be defined as follows. It is the process by which the proceeds of crime are converted into assets whose origins are difficult to trace. Despite all, we know that 70% of the money laundered in Canada is drug money. The remaining 30% comes from activities as varied as under the table gaming, tobacco and alcohol smuggling, fraud, counterfeiting and petty computer and telecommunications crime.
As we know, money is the sinews of war, and the one waged by the authorities against organized crime is no exception. Internationally, proceeds from crime entering the financial market represents hundreds of billions of dollars. So, considering that the prime motivator behind organized crime is lucre, and here I am speaking of huge sums quickly pocketed, the confiscation of such laundered proceeds hurts a lot more than the usual sanctions of fines and prison terms.
Legitimate or not, every business aims at making a net profit. By way of example, let us look at a business whose activities are on the up and up. Suppose that for some reason or other the business is taken to court and for purposes of discussion, let us imagine that at the end of the trial it is sentenced to pay a fine or to pay damages. Of course, the business will feel it but this comes with the territory.
The same holds true for organized crime. A jail sentence or a fine is among the inherent risks associated with criminal activities. However, by depriving an organization of its most profound motivation, we destroy the directly proportional relation that exists between the risks and the benefits. So, getting our hands on that organization's assets will weaken it from an economical and moral point of view. In other words, we must show that, indeed, crime does not pay.
Even though it does not at all change the substance of the Proceeds of Crime (Money Laundering) Act, Bill S-16 does address some issues raised during the hearings held on Bill C-22 by the Standing Senate Committee on Banking, Trade and Commerce. The four changes included in the bill should address the following issues.
How long will the Financial Transactions and Reports Analysis Centre of Canada keep the information that it collects? When and how will it dispose of the information that it will have gathered? What information can the centre transmit to law enforcement bodies? Will the federal court have the power to order the centre to transmit the file of an individual under the Privacy Act and the Access to Information Act? Finally, who is authorized to make a claim of solicitor-client privilege?
We must ask ourselves if Bill S-16 adequately addresses these concerns, and this is what we are going to do.
First, we can say that clause 1 responds satisfactorily to the first two questions raised before the standing Senate committee. This amendment sets out the circumstances justifying the maximum retention period of eight years for reports and all information.
This retention period shall be enforced when the centre forwards information either to law enforcement authorities or to the Canada Customs and Revenue Agency, the Canadian Security and Intelligence Service, the Department of Citizenship and Immigration, an agency in a foreign state or an international organization with a mandate similar to the centre's.
Moreover, the addition of paragraph ( e ) to section 54 of the Proceeds of Crime (Money Laundering) Act provides that each report received and all information received or collected shall be destroyed on the expiry of the applicable period. This paragraph therefore adds certain necessary clarifications regarding the duration of retention and the destruction of information.
Similarly, with the addition of the term identifying information in paragraph 55(7)( e ), the purpose of which is to clarify to what the information is similar, the second clause of Bill S-16 thus responds to the third question. The purpose of this amendment is to clarify that the identifying information in question is that found in paragraphs ( a ) to ( d ).
In our view, this clarification was not needed since paragraph 2(e) is interrelated to the previous ones. But since this is a catch-all paragraph, I guess someone felt the need to make this clarification which does not change anything to the original provision. If this amendment can clarify things for some people, great.
With respect to the fourth question, clause 3 of Bill S-16 was drafted because initially the federal court was not allowed to make an order for disclosure. In fact, such an order could only be made pursuant to subsection 60(4) of the Proceeds of Crime (Money Laundering) Act.
The amendment ensures that no provision in this legislation can prevent the federal court from ordering the director of the centre to disclose information under the Access to Information Act and the Privacy Act. It seems that it was always intended for the federal court to enjoy this authority, which will now be clearly stipulated in clause 3 of Bill S-16.
With this amendment, the Proceeds of Crime (Money Laundering) Act will now give the federal court some judicial control over the disclosure of information.
As for the fourth clause, as we mentioned at second reading, it certainly would have been possible to word it to make it easier to understand. Unfortunately, it was not, and we have to live with it.
In addition, following the explanations we were provided with at the Standing Committee on Finance, we believe that, even if this amendment answers our fifth question about who could invoke the solicitor-client privilege, it seems that it does not deal with the concerns that led to its drafting.
Before the Senate committee, accountants maintained that they have very high standards of confidentiality to meet, just like any lawyer. Consequently, they say that they should also be allowed to claim solicitor-client privilege. However, clause 4 of the bill responds only partially to this demand. An accountant or any other person, other than a lawyer, cannot personally claim solicitor-client privilege.
Indeed, the protection of documents in the possession of a person who is not a lawyer depends on the involvement of such a legal counsel in the matter under investigation. Therefore, the possibility of claiming solicitor-client privilege remains restricted to the lawyer.
How does this work in practical terms? First, the client gives a legal mandate to a lawyer. I must insist on the fact that the nature of the mandate is crucial because a lawyer who would act as business adviser could not claim solicitor-client privilege.
In fulfilling his or her mandate, the lawyer may work jointly with other professionals, such as an accountant for example. Having doubts regarding the legality of the activities conducted by the client, the authorities decide to investigate. The person authorized to conduct the search will not be able to examine the documents handed over to the accountant by the lawyer. Therefore, it is through the lawyer, the only person who can claim solicitor-client privilege, that the documents in the possession of the accountant will remain confidential.
In this context, it would be fair to think that, in order to enjoy absolute protection, money launderers will systematically go to a lawyer first, who will hand the documents over to the appropriate professionals.
Yet the situation is not as simple as it may appear. Even if the solicitor-client confidentiality required of the lawyer at this time provides considerable guarantees of confidentiality, this is not an absolute concept but one subject to a number of conditions and restrictions, which I will not list in the context of today's debate.
When an individual or organization involved in money laundering requires the services of any professional with a view to facilitating the perpetration of a crime, regardless of whether or not a lawyer was involved, the seized documents cannot be protected by solicitor-client privilege.
In short, this amendment adds nothing new to the present situation, in that it merely codifies existing principles which have long been in place under common law. The concept of solicitor-client privilege therefore remains exclusive to the performance of the duties of a lawyer.
This notion can, moreover, be extended to other persons when their services have been retained by a lawyer, in order to enable him or her to meet the obligations of his or her mandate as a lawyer.
Under these circumstances, one might say that the solicitor-client privilege is not a right transmittable to a third party. It is instead a real right involving transmitted documents which, as the bottom line, are the purview of the lawyer.
We believe that the law will meet the objective of this provision, that is to ensure that specialized professionals such as lawyers and accountants cannot act as accomplices to the money laundering mechanism.
As we have already stated, Bill S-16 ought to respond to five very specific questions raised before the Senate committee. Despite the fact that accountants do not really enjoy the same privileges of client confidentiality as lawyers, we still consider that Bill S-16 effectively addresses all these issues.
Obviously, as we supported the Proceeds of Crime (Money Laundering) Act and as the four clauses the present debate addresses are intended simply to clarify the intent of the provisions they amend, we will also vote in favour of Bill S-16.
However, we wish to point out to this House that we are supporting the government today for the same reasons we became involved in the introduction of new coercive measures.
We are satisfied these measures will enable the authorities to more effectively fight organized crime and therefore to ensure the safety of Quebecers.
In addition, it is unfortunate that the people of Quebec must once again put their faith in the goodwill of a federal government, which, more often than not, does what it likes when it comes to resolving problems that, despite their application to Quebec society specifically, fall under the jurisdiction of the federal government because of the distribution of jurisdictions, which gives it exclusive jurisdiction in matters of criminal law.
It is therefore appropriate to mention that this dependency will be eliminated with a sovereign Quebec.