Effective January 1, 2009, new Law Society of British Columbia rules require all BC lawyers to follow specified procedures to identify and verify their clients. The new rules are part of an initiative by Law societies across Canada, to assist in combating money laundering, terrorist financing and fraud involving legal services. In British Columbia, the new rules apply to all new matters in which a lawyer is retained commencing on or after January 1st, regardless of whether the client is a new or existing client.
Harris & Company LLP has adopted new procedures to ensure that we comply with the new requirements in an efficient manner, and which causes the least amount of disruption to our clients.
Identification vs Verification
The new identification rules require us to collect certain basic information about the identity of our clients whenever we provide legal services in relation to a new matter. This information records who our clients are.
The verification rules require us to obtain additional information to confirm our clients’ identities, whenever we receive, pay or transfer money on behalf of a client, or give instructions on behalf of a client in respect of the receiving, paying or transferring of money. We must obtain and retain a copy of every document used to verify a client’s identity.
Clients Who Are Individuals
Identification Information for Individuals. We are required to obtain the client’s name, home address and telephone number, occupation and (if applicable) business address and business telephone number.
Verification Information for Individuals. We must review and copy a valid piece of government-issued identification, such as a birth certificate, driver’s license, provincial or territorial health card, passport or similar record.
Clients Who Are Organizations
Identification Information for Organizations. We are required to obtain the client’s name, business address, business telephone number and a description of the client’s business activity. We must also obtain the client’s incorporation number or business identification number and its place of issue. In addition, we will require the name, position and contact information for the person(s) who will be providing our firm with instructions.
Verification Information for Organizations. We are required to obtain and copy a document issued by a government registry that confirms the existence and name and address of the organization. This would include, for example, a certificate of corporate status issued by a public authority, or a copy obtained from a public authority of a record that the organization is required to file annually under applicable legislation. In addition, we must obtain and record the names and occupations of the organizations directors and the identity, address and occupation of all persons who own 25% or more of the organization or shares of the organization. Finally, we must obtain a copy of a government issued identification for the individual instructing us in relation to any financial transaction.
Providing The Required Information
When we open a new file or matter, we will request the information and documents set out in the Law Society’s rules to identify and, if necessary, verify the identity of our clients. We will not charge any fee for obtaining this information, but there may be a small disbursement charge if a corporate search is required. Organizations can avoid this charge by providing us with the corporate information directly.
Exceptions
Client verification is not required for financial institutions, public authorities and reporting issuers. Generally speaking, this means we do not have to verify the identity of:
- Banks;
- Cedit Unions;
- Trust Companies;
- Provincial or Federal Government departments;
- Municipalities/Regional Districts;
- Colleges/Institutes/Universities;
- School Districts;
- Public hospitals; and
- Most publicly traded companies.
Existing Clients
We are not required to identify or verify the identity of any client in respect of an existing matter with us as of December 31, 2008. However, when we provide legal services in respect of a new matter after December 31, 2008 we will be required to identify and, if applicable, verify the client.
Once our firm has complied with the identification and verification requirements with respect to a client, it should not be necessary to do so again for further matters unless there are changes to client information or contacts.
Protection of Personal Information
Our firm’s privacy policy applies to all personal information collected in accordance with the new rules.
Questions
We thank you in advance for your understanding If you have any questions about how the Law Society’s new identification and verification rules will affect you, please don’t hesitate to contact us.