Anti-Money Laundering Measures

Anti-Money

Laundering Measures

Anti-Money Laundering Measures: Client Identification and Verification/Receipt of Cash – What You Need to Know

As Canadian and international concerns over money laundering and terrorism financing have grown, Canadian law societies have tightened rules on the receipt of cash by lawyers as well as client identification and verification.

Like all people in Canada, lawyers are subject to the Criminal Code, but they are exempted from the federal legislative regime under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (“PCMLTFA”) due to constitutional principles that protect the rights of clients and the obligations of legal professionals within their confidential relationships. As a result, the legal profession has adopted model rules for lawyers and notaries to follow that are designed to reflect the government’s legislative objectives under PCMLTFA, while reflecting the rights of clients and the obligations of legal professionals.

Council has adopted amendments to the Rules on Cash Transactions, the Rules on Client Identification and the Uniform Trust Account Rules. These amendments come into force on May 1, 2021. The changes are based on the Federation of Law Societies of Canada Model Rules and are part of the Law Society’s ongoing commitment to combat money laundering.

All lawyers and firms must review and revise their processes to ensure they comply with the existing and new rules. These rules are extremely important in the fight against money laundering and terrorist financing in New Brunswick, Canada and internationally. Adopting and enforcing consistent rules is a critical part of the Federation and the law societies’ strategy to address the risks of money laundering and terrorism financing activities.

Amended Rules:

Virtual verification of client identity using government-issued photo ID and technology

Effective July 1, 2026, members who choose to verify an individual’s identity using video conferencing or other forms of virtual communication must have a process or method in place to authenticate the individual’s government-issued photo identification document.

During and following the COVID-19 pandemic, the Law Society of New Brunswick had temporarily permitted its members to verify an individual’s identity without being in the individual’s physical presence. The “face-to-face” requirement was interpreted to include virtual meetings conducted by video conference. This temporary measure, outlined in the Legal Profession Frequently Asked Questions document (last updated December 22, 2021), allowed you, until further notice, to confirm identity through video technology while managing related risks as described in that guidance.

Effective July 1, 2026, members will need to follow the requirements under the Law Society Rules on Client Identification, 2021 (see subsection 6(6.1)), including the new virtual verification method.

The Law Society prepared a document titled Guidance for virtual verification of your client’s identity using government-issued photo ID and technology. This Guidance applies only to virtual verification of identity for the purposes of complying with the Law Society Rules on Client Identification, 2021, related anti-money laundering and anti-terrorist financing obligations, as well as to documents to be registered under the Land Titles Act and the Registry Act. It does not apply to the virtual commissioning, swearing, or affirming of affidavits or statutory declarations for court or other legal proceedings, which are subject to separate requirements and rules. It also does not apply to the witnessing of wills and powers of attorney by electronic means of communication, which is governed by the Wills Act, RSNB 1973, c. W-9 and the Enduring Powers of Attorney Act, SNB 2019, c. 30.

Additional Resources

To assist the legal profession in following the model rules, the Federation of Law Societies has developed the booklet Guidance for the Legal Profession which details the professional responsibility to avoid facilitating or participating in money laundering or terrorist financing activities.

As an additional resource, the Federation’s Anti-Money Laundering and Terrorist Financing Working Group (“AMLTF Working Group”) has also developed Risk Assessment Case Studies to raise awareness of money laundering risks in legal practice by exploring real world scenarios. Each case study identifies “red flags” arising on the facts and offers guidance on how members might respond to mitigate the risks of involvement in or facilitation of illegal activity.

To address the money laundering and terrorism financing vulnerabilities they may face, legal professionals need to be aware of the risks that may be inherent in legal practice. A Risk Advisories document published by the Federation is intended as a quick reference on money laundering risks that can arise in five areas. These include real estate transactions, litigation, setting up and managing trusts, setting up shell corporations and private lending transactions. Law societies are invited to share the document with members at their discretion.

Some risks identified in this publication are related to clients and their activities; others may arise from the nature or circumstances of a transaction. Some risks may be more likely to arise in specific practice areas, others may arise regardless of the area of practice.

In addition, you will find the following additional resources:

Federation's Online Learning Program

Webinars