Financial entities

Your Obligations

The following summary of the legislative requirements under the PCMLTFA applies to you if you are a financial entity. This includes banks (that is, those listed in Schedule I or II of the Bank Act) or authorized foreign banks with respect to their operations in Canada, credit unions, caisses populaires, financial services cooperatives, credit union centrals (when they offer financial services to anyone other than a member entity of the credit union central), trust companies, loan companies and agents of the Crown that accept deposit liabilities.

Additional Information for Financial Entities

Reporting

Record Keeping

You must keep the following records:

See Guideline 6G: Record Keeping and Client Identification for Financial Entities

Ascertaining Identity

You must take specific measures to identify the following individuals or entities:

See Guideline 6G: Record Keeping and Client Identification for Financial Entities

Use of personal information

The use of personal information in Canadian commercial activities is protected by the Personal Information Protection and Electronic Documents Act (PIPEDA), or by substantially similar provincial legislation. You have to inform individuals concerning the collection of personal information about them. However, you do not have to inform individuals when you include personal information about them in any of the reports that you are required to make to FINTRAC. You can get more information about your responsibilities in this area from the following:

Business Relationship

You are in a business relationship when a client holds an account with you.

You enter into a business relationship when a client opens an account with you; or when you conduct two or more transactions in which you have to:

See Guideline 6G: Record Keeping and Client Identification for Financial Entities

Politically Exposed Foreign Person

You have to take reasonable measures to determine whether you are dealing with a politically exposed foreign person for new or existing accounts or certain electronic funds transfers of $100,000 or more. You also have to keep records and take additional measures.

See Guideline 6G: Record Keeping and Client Identification for Financial Entities

Third Party Determination

Where a large cash transaction record is required, or when a signature card or account operating agreement is created, you must take reasonable measures to determine whether the individual is acting on behalf of a third party.

In cases where a third party is involved, specific information about the third party and their relationship with the individual providing the cash or the account holder must be obtained.

See Guideline 6G: Record Keeping and Client Identification for Financial Entities

Compliance Regime

The following five elements must be included in a compliance regime:

See Guideline 4: Implementation of a Compliance Regime

Penalties for Non-compliance

Non-compliance with Part 1 of the Proceeds of Crime (Money Laundering) Terrorist Financing Act may result in criminal or administrative penalties.

FINTRAC Interpretation Notice

FINTRAC issues FINTRAC interpretation notices (FINs) to provide technical interpretations and positions regarding certain provisions contained in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated Regulations.

For more information on your obligations and on FINTRAC, you can also consult our Frequently Asked Questions.

Compliance Assessment Report

Part of FINTRAC's mandate is to ensure compliance by financial intermediaries and other reporting entities with their obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and regulations. To do this, we can inquire into your business and examine records, including those relating to your compliance regime.

The compliance assessment report is one of the ways that FINTRAC can inquire into your business. FINTRAC will advise you in writing when you are required to complete it.

If you have received a request from FINTRAC, you need the access code provided in that request to be able to log on to the secure Compliance Assessment Report System ( https://www22.fintrac-canafe.gc.ca/cars-srec/).

For any questions about this, please contact us by e-mail at CARS-SREC@fintrac-canafe.gc.ca. If you do so, be sure to indicate your company/organization name as well as your reporting entity sector.

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