Client Identification and Verification/Anti-Money Laundering and Terrorist Financing Requirements

Due to the COVID-19 virus, the Law Society understands that members may face specific challenges in meeting their obligations relating to client identification & verification and the anti-money laundering and terrorist financing rules.  While we continue to expect that members will do everything possible to meet all their obligations, we recognize that it may be challenging to verify a client’s identity where the member and client are unable to meet in person.

Identification Requirement

Members are reminded that in-person attendance is not required in order to collect the information needed to identify the client in accordance with the Rules.

Identifying the client means obtaining certain basic information about your client, such as name and address, and identifying any third party directing, instructing or who has the authority to direct or instruct your client. You must obtain this information whenever you are retained to provide legal services to a client, unless an exemption applies. This step can be done over the phone or by video conference. There is no requirement that it be completed face-to-face.

Verification Requirements

Verifying the identity of a client means actually looking at an original identifying document from an independent source to ensure that your clients and any third parties are who they say they are. You are only required to verify the identity of your client and such third parties if you are involved in a funds transfer activity, that is, you engage in or instruct with respect to the payment, receipt or transfer of funds, and an exception does not apply.

1. If personal attendance would require travel by either yourself or the client, consider whether the use of an agent is an option.
2. Consider whether you may be able to rely upon the previous verification by another person (for example, a real estate agent) as permitted under the Rules.
3. Members are reminded that the Rules permit members to verify a client’s identity by two methods that do not require meeting face-to-face with the client – the dual process method or using information in a client’s credit file. Please refer to pages 12 and 13 of the Federation’s Guide to the Profession for detailed information on these client identification and verification methods.
4. Where the client is in attendance and government issued photo identification is the method of verification being provided, you may wish to restrict directly handling the documents or ID. You may take a photo of the identification for your file, and immediately save it electronically to your client file or print it and place it on the file.  Please ensure that if the photo is taken with a personal cell phone that the images are deleted as soon as the image is on file.
5. If however, you are unable to avail yourself of any other method, in these unique circumstances and as a last resort, the Law Society will take a reasonable approach in its compliance activity if the member were to conduct the verification of the client’s identity by using video conference technology, provided that:
   • The member can be reasonably satisfied that the government issued identification is valid and current;
   • The member can compare the image in the government issued identification with the client to be reasonably satisfied that it is the same person;
   • The member records, with the applicable date, the method by which the member verified the client’s identification;
   • The member treats the transaction as a high-risk transaction and continues to monitor the business relationship as a high-risk transaction;
   • The member documents the efforts that were made to verify the client’s identity in accordance with the existing Rules and the reasons why the member was unable to verify the client’s identity in accordance with the existing Rules.

Members are reminded that fraudsters look for opportunities to take advantage of unusual circumstances, such as are being addressed here, and therefore, if a transaction presents too much of a risk, members should decline to act.

For more information, please review the Law Society Rules and Resources.