The Canadian Government's decision to repeal controversial parts of its money laundering regulations will have far-reaching implications for The Bahamas.
In an announcement Tuesday, the Federation of Law Societies of Canada and individual law societies said the amendment to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act remove a serious erosion of lawyer/client confidentiality and hail it as an important victory for rights of Canadians.
Dr. Peter Maynard said the move by the Canadian Government will "most definitely have important implications for The Bahamas. The president of the Bahamas Bar Association also renewed his call for the "Financial Clearing Case" to be made law in The Bahamas.
The case was overruled in the Court of Appeal, but the principle in the first instance is a valuable one for the protection of the country's financial service sector, he said
"That's precisely the position we have been taking in the litigation now ongoing in the Supreme Court."
Dr. Maynard said he understood that Attorney General Alfred Sears has been asked to agree to a consent order on an injunction, along the lines of what has happened in Canada.
He said that the Canadian legislation and laws in The Bahamas "run roughshod" over basic duties and rights associated with being a lawyer.
"This is a testament to the resolve of Canada's law societies," said Maurice Laprairie, head of the Canadian federation's task force on money-laundering legislation. "Opposition to reporting portions of the regulations was spearheaded by the federation and Canada's law societies. Thanks largely to our efforts, the federal Government has made a decision benefiting all Canadians. "
Canadian province-by-province challenges by individual law societies and the federation on the constitutionality of the reporting portions culminated in a test case in the British Columbia Supreme Court on the constitutionality of the reporting portions that was scheduled to start in June.
The federation, along with the Law Society of Upper Canada and the Canadian Bar Association, raised strong objections to the reporting portions of the regulations before a Senate committee considering the legislation.
"The right to representation by an independent lawyer is a basic right in all free and democratic societies. It is woven into the very fabric of our constitution and the Canadian system of justice," said Professor Vern Krishna, head of the Law Society of Upper Canada.
"Law societies are committed to fighting for the right of all Canadians to representation by a truly independent lawyer and the right to know that what is said to that lawyer will be held in strict confidence," said Mr. Laprairie.
"The Federation looks forward to assisting the government in developing a new legislative and regulatory plan that respects the constitutional rights of all Canadians and gives the government the tools it needs to fight crime," he said.
Bahamas Bar Association president Dr. Maynard said, "At stake here is not just our own system, but really the way in which lawyers relate to their clients. You are entitled to have privileged communications with your client," he said.
Dr. Maynard said he suggested to the Government-appointed financial consultative committee that it adopt recommendations along the lines of those in Canada, a member of the Organisation for Economic Cooperation and Development.
After the blacklisting of The Bahamas financial services sector by the OECD and Financial Action Task Force, it rushed to implement new laws that would bring its sector in line with international financial standards.
Some argued the laws were implemented to protect the sector from money laundering.
But according to Dr. Maynard, the financing of anything requires bank accounts and accounts are fully scrutinised by financial institutions, and lawyers are still urged to do due diligence.
"The difficulty is the disclosure of a client's business to someone else."
Dr. Maynard agreed that such measures have contributed to a number of offshore financial institutions closing or scaling-down operations.
"We must realise that everybody expects a certain amount of confidentiality in his or her business, and certainly that's continuing to be a factor in the competitiveness of The Bahamas."
Dr. Maynard said The Bahamas patterns itself after Sweden, but that jurisdiction has maintained its confidentiality to a large extent.
He said The Bahamas must recognise the importance of its own governmental institutions such as bar associations, and that they take steps to maintain the integrity of the grouping.
The trend is to now circumvent that requirement and give everybody else functionary powers to do these things, Dr. Maynard said., and that erodes our position as a financial services centre.
"This new position in Canada would strengthen our case and we are hopeful that the injunction would be put in place at the earliest opportunity," he said.
"Because at the end, we are not only talking about strengthening the legal profession, but also strengthening the Bahamian economy."
By Lindsay Thompson, The Nassau Guardian
