Presentations to Reporting Entities

New PCMLTFA Obligations
Money Services Businesses

April 2008

Table of Contents

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Presentation Overview

Slide 1: Presentation Overview

  • Introduction
  • Objectives of New Requirements
  • MSB Registration
  • Changes to Reporting
  • Changes to Client Identification and Record Keeping
  • New Due Diligence Measures
  • Changes to Compliance Regime
  • Administrative Monetary Penalty Regime
  • Other Information

Slide 2: Introduction

  • The PCMLTFA was amended in December 2006, authorizing the creation of new requirements through its related regulations:
    • Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations
    • Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations
    • Proceeds of Crime (Money Laundering) and Terrorist Financing Registration Regulations.
  • Most requirements become effective on June 23, 2008

Slide 3: Objectives of New PCMLTFA Requirements

  • Strengthen existing AML/ATF regime and build on FINTRAC's experience
  • Address existing gaps in the legislation and regulations
  • Enhanced detection and deterrence of money laundering and terrorist financing
  • Make illicit transactions more difficult to conduct
  • Greater impact against organized crime and terrorists

Slide 4: Definition of a Money Services Business (MSB)

  • Definition of MSB will include foreign exchange dealers
  • An MSB means an individual or entity engaged in the business of any of the following activities:
    • Foreign exchange dealing;
    • Remitting or transmitting funds; or
    • Issuing or redeeming money orders, travellers cheques or similar negotiable instruments except for cheques payable to a named individual or entity

Slide 5: MSB Registration

  • Effective June 23, 2008, all MSBs operating in Canada will have to be registered with FINTRAC.
  • It will constitute an offence under the PCMLTFA to operate an unregistered money services business.

Slide 6: MSB Registration (cont'd)

  • MSBs must renew their registration every two years.
  • Must inform FINTRAC of changes or cessation of activities within 30 days.
  • FINTRAC will act as registrar and can deny or revoke the registration.
  • Registration is not a FINTRAC endorsement.

Slide 7: Registration Ineligibility Grounds

The following applicants are not eligible for registration:

  1. Applicant is a listed person under the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism.
  2. Applicant is a listed entity under the Criminal Code terrorism provisions
  3. Applicant has been convicted of:
    • a money laundering or a terrorist activity financing offence.
    • a Proceeds of Crime (Money Laundering) and Terrorist Financing Act (on indictment)
    • a terrorism offence under the Criminal Code
    • an organized crime offence under the Criminal Code
    • a serious offences under the Criminal Code pertaining to fraudulent transactions (contracts and trade)
    • a serious offence under the Controlled Drugs and Substances Act (does not include simple possession).