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NEW CLIENT IDENTIFICATION AND VERIFICATION RULES FOR B.C. LAW FIRMS

By Clark Wilson LLP    February, 2009

In an attempt to reduce the risk that lawyers' trust accounts may be used for money laundering and terrorist financing, the Law Society of British Columbia ("LSBC") now requires lawyers to collect certain information about their clients before providing legal services. The LSBC's rules are similar to the rules developed by the Federation of Law Societies of Canada and are in effect across Canada in similar form. The rules came into effect on December 31, 2008.

All lawyers are now required to identify and verify their clients. The identification requirement requires lawyers to collect basic identification information about clients for new matters, even if there is already a long-standing lawyer-client relationship. For example, if Clark Wilson has been acting as your counsel for several years, and you retain us to act for you on a new transaction, we have to collect identification information from you. If you are an individual, the information which we will need to record includes your:

  • Full name;

  • Home address and telephone number;

  • Occupation(s); and

  • Business address and telephone number.

If you are an organization (e.g. a company, partnership, trust, fund, or other unincorporated association), the information which we will need to record includes:

  • Full name of organization;

  • Business address and telephone number;

  • Incorporation number or business identification number and place of issue;

  • General nature of the business; and

  • Full name, position and contact information for any individual authorized to give Clark Wilson instructions with respect to the matter for which we are retained.

For many of our existing clients, Clark Wilson will already have much of this basic identification information.

Verification for Financial Transactions

The verification requirement applies only in certain financial transactions, in instances where our clients will use Clark Wilson's services to receive, pay or transfer funds, securities, negotiable instruments or other financial instruments. We must identify our clients by collecting and retaining documents which allows us to confirm that our client is who or what they say they are. We do not need to verify our clients' identities when receiving funds for our legal fees and disbursements.

The information we need to obtain and record to comply with the verification rules will vary depending on the nature of the transaction.

For individuals, we may be required to obtain and retain copies of government-issued identification (e.g. passport, driver's license, birth certificate or care card).

We must verify the identity of our clients who are individuals before or at the time that we provide legal services in respect of a financial transaction.

For an organization,, we must identify the client, including the person authorized to give Clark Wilson instructions, and we are required to obtain and record written confirmation from a government registry as to the existence, name and address of the organization, including names of directors and officers.

We must also:

  • verify the identity of the person authorized to give Clark Wilson instructions;

  • obtain and record the occupation of all directors of your organization; and

  • obtain and record the name, address and occupation of all persons who own 25% or more of the organization, or shares of the organization.

In instances where we are unable to meet our clients in person (e.g. due to that person living in another part of Canada), we must have a commissioner of oaths or a guarantor certify that they have verified our client's identity.

Our goal is to work with our clients to minimize the impact and intrusion of the new rules. We will keep all client identification and verification information in strict confidence. Note however that the LSBC may require Clark Wilson to provide some information to the LSBC to ensure compliance with the rules.

If you have any questions about the new client identification and verification rules, contact any member of Clark Wilson LLP's Commercial Real Estate Group.

 

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