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New Client Identification and Verification Requirements

Published: 12/29/2008

Important Information for Clients of Cassels Brock & Blackwell LLP

As a result of growing global concern that lawyers who are bound to protect confidentiality and their law firm trust accounts may be targeted by persons wishing to bring credibility to illegal dealings, such as money laundering and terrorist financing, the Government of Canada called upon the Federation of Law Societies of Canada to create a national, uniform standard for client identification and verification that will apply to all lawyers practicing in Canada. In response, The Law Society of Upper Canada which regulates lawyers practicing in Ontario, has introduced new rules that require lawyers to collect specific information regarding their clients and, in situations where a lawyer’s trust account will be used in connection with a client retainer, to verify and confirm the identity of the client. The law societies in all other provinces and territories have or are in the process of adopting similar rules.

Cassels Brock has implemented certain changes to our file opening and trust account procedures to ensure that we fulfill our professional obligations mandated by the new “Know Your Client” rules in a manner that minimizes the impact on our clients. We have summarized the key requirements below.

Our Client Identification Obligations

Commencing on January 1, 2009, when we are retained to act on a new file, whether for a new or an existing client, we are required to obtain certain information in addition to the client information we already routinely obtain. This requirement to obtain identification information applies to all of our clients, even those clients with whom our firm has long-standing relationships. Unless the relevant information we are required to collect changes, we are required to obtain the information only once from each client.

When you retain us to act on a matter, we will request from you the following information:

• For clients that are organizations, we will record the organization’s full name, business address, telephone number, incorporation or business identification number, the jurisdiction in which the organization was formed, the general nature of the type of business or activities in which the organization engages, and the name, position and contact information for all individuals at the organization authorized to give instructions with respect to the retainer.
• For individual clients, we will record your full name, business address and telephone number, home address and telephone number and occupation.
• For clients who act for or represent a third party, we must obtain similar information about the third party as applicable for individuals and organizations.

Our Client Verification Obligations

We are required to comply with additional requirements when we engage in or give instructions with respect to the receipt, payment or transfer of monies, securities, negotiable instruments or other financial instruments such as, for example, if our trust account is used in connection with a client transaction. In such cases, depending on the circumstances and subject to certain exemptions, we may also be required to verify the identity of individual clients and confirm the existence of clients who are organizations.

For clients that are organizations, the additional information we are required to obtain includes the name and occupation of each director and the name, address and occupation of each person owning 25% of more of the organization or its shares. We must also examine and make a copy of an official document confirming the organization’s existence, such as a certificate of good standing or documents evidencing the organization’s formation.

We are also required to verify the identity of individual clients or, in the case of an organization, the identity of all individuals authorized to provide instructions to Cassels Brock on behalf of the client organization. The process of verifying the identification of individuals requires us to examine and make a copy of the individual’s identification document such as a driver’s licence, birth certificate or passport. In certain circumstances, a third party, such as a client’s local counsel in the client’s home jurisdiction or an agent designated to be acceptable by the “Know Your Client” rules, may examine such documentation on our behalf and provide us with an attestation of client verification.

Privacy

Cassels Brock recognizes the importance of privacy and the sensitivity of personal information. As lawyers, we have a professional obligation to keep confidential all information we receive within the lawyer-client relationship. We are committed to protecting all personal information we hold. The information and documentation we obtain in compliance with the “Know Your Client” rules will be used solely to comply with our professional obligations, and access to such information will be restricted to a “need to know” basis. Except in circumstances where we are required by law to do so, we will not disclose the identification and/or verification information to any third party. For more information about the manner in which we collect, use and disclose personal information about individuals and organizations, please consult our Privacy Statement on our firm’s website at www.casselsbrock.com or speak to one of our lawyers.

Further information regarding the new client identification and verification requirements is available at the website for The Law Society of Upper Canada at www.lsuc.on.ca. If you have any questions regarding the procedures we have implemented to comply with the “Know Your Client” rules, please contact any one of the Cassels Brock lawyers with whom you deal. We thank you in advance for your understanding and co-operation.