Money laundering involves taking criminal proceeds and disguising their illegal origin. The Criminal Code of Canada similarly defines the offence of money laundering as the transfer, use, or delivery of property or proceeds with the intent to conceal or convert the property or proceeds, knowing that they were derived from criminal activity. Simply put, money laundering is the process of making dirty money look clean.  

Money laundering affects every aspect of our society and its institutions, including financial institutions, law enforcement agencies and professional regulators. It has significant economic and social consequences. Money laundering is not a victimless crime; it enables criminal activity in all walks of life and affects all Canadians.   

Lawyers may be at risk of being targeted by money launderers due to their roles in forming corporations and trusts, in dealing with real estate transactions, and in operating trust accounts. Criminals may also try to use lawyers to provide an appearance of legitimacy to transactions or to try to obtain solicitor-client privilege to hide transactions.   

The same methods and practices used by criminals to launder money can also be used in terrorist financing. Terrorist financing is the use of funds, property or other services to encourage, plan, assist or engage in acts of terrorism such as intimidating a population or influencing a government or an international organization to act in a certain way.  

These areas of legal services are used every day for legitimate transactions, which is why lawyers must be vigilant to ensure that they are not used by criminals looking to filter funds. 

Anti-Money Laundering Rules

To learn more about the Law Society of Alberta’s rules for lawyers related to money laundering, including frequently asked questions and additional resources, visit the pages below: 

• Client Identification and Verification
• Cash Transactions
• Trust Accounting Rule (Rule 119.19) 
• Anti-Money Laundering Resources 

Duty to Withdraw

Lawyers must withdraw from representing a client if they know or ought to know that they are, or would be, engaging in or assisting a client in money laundering, fraud or other illegal activity. 

View the Client Identification and Verification Flowchart and the Federation Client Identification and Verification FAQs for more information. 

Anti-Money Laundering the Federation of Law Societies of Canada

The Federation of Law Societies of Canada (the Federation) approved a Model Code of Professional Conduct (Model Code) and model anti-money laundering rules (Model Rules), which govern client identification and verification, cash transactions, and permitted uses of lawyers’ trust accounts. This approach enables a consistent and coordinated effort to mitigate money laundering and terrorist financing across the country. Each law society adopts, implements and enforces their own anti-money laundering rules based on the Model Rules. 

Within the Model Code, there are rules that seek to limit the handling of cash by lawyers and to ensure that legal counsel exercise due diligence in identifying their clients. These measures are the cornerstone of legal regulators’ anti-money laundering and anti-terrorism financing initiatives. 

The Model Code sets out the expected standards of ethical conduct, includes key rules of general application and co-exists with the anti-money laundering Model Rules to guide the law societies in regulating lawyers. The Code of Conduct in Alberta is based in part on the Model Code and prohibits lawyers from knowingly assisting in or encouraging fraud, crime or illegal conduct such as money laundering.