Canada’s AML framework contains a structural anomaly: professional accountants are federally regulated for anti money laundering, but lawyers are not. This is the result of constitutional protections around solicitor–client privilege and the independence of the bar and is therefore, effectively, a policy choice. The outcome is a divided system in which two professions working on the same transactions operate under very different AML expectations.
1. The Anomalous Position
Under the PCMLTFA, accountants and accounting firms are reporting entities when they perform certain activities, including handling client funds, creating companies or trusts, or instructing financial transactions. When they do, they must comply with full FINTRAC obligations: CDD, ongoing monitoring, suspicious transaction reporting, and a formal compliance program.
Lawyers, by contrast, are not reporting entities.
They are regulated solely by provincial law societies, which impose client ID, verification and trust accounting rules, but no federal AML duties and no FINTRAC oversight. This is despite the fact that lawyers routinely handle the highest risk elements of transactions: trust funds, real estate closings, corporate structuring and cross border transfers.
FINTRAC’s 2024 Special Bulletin makes clear that the legal profession is heavily targeted by money launderers — even though it sits outside the federal regime.
2. How Canada Compares to Other Common Law or Quasi Common Law Jurisdictions
When viewed internationally, Canada’s position stands out.
• United Kingdom — lawyers and accountants fully AML regulated
• Australia — both professions entering the AML regime in 2026
• New Zealand — both professions regulated since 2018
• United Arab Emirates — civil law system overall, but with common law free zone courts (DIFC/ADGM); both professions AML regulated federally
• United States — lawyers not federally regulated; accountants regulated when performing defined activities
• Canada — accountants federally regulated; lawyers not
Canada and the United States are the only major common law or quasi common law jurisdictions where lawyers sit outside a federal AML regime — but Canada’s exposure is more visible because FINTRAC has publicly identified the legal profession as a systemic vulnerability.
3. Why Change Is Inevitable
Three forces are pushing Canada toward reform.
A. FATF Pressure
FATF has repeatedly criticised Canada for gaps in gatekeeper regulation, beneficial ownership transparency and supervision. Leaving lawyers outside the federal regime is increasingly difficult to justify.
B. FINTRAC’s Own Findings
FINTRAC has openly stated that legal professionals are central to many laundering typologies. When the federal regulator identifies a profession as a high risk gateway, the policy pressure to act intensifies.
C. Market Expectations
Banks, counterparties and cross border clients increasingly expect firms to demonstrate:
• who controls the client
• where funds originate
• whether sanctions or PEP exposure exists
• whether the matter is consistent with the client’s profile
Many firms already perform elements of CDD because the market demands it, not because legislation requires it.
A System Under Strain
Canada’s AML framework for professional firms is a constitutional compromise, not a risk based design. Accountants operate under full federal AML obligations; lawyers operate under professional rules that were never intended to substitute for a national AML regime. Meanwhile, the risks — and the expectations of clients, banks and regulators — continue to rise.
Understanding this anomaly is the first step.
Recognising that it cannot remain static is the second.