Regulatory amendments in force as of June 1, 2021
The changes to the Regulations made under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act announced in the Canada Gazette in July 2019 and June 2020 are in force as of June 1, 2021. These changes help strengthen Canada's anti-money laundering and anti-terrorist financing regime by closing certain gaps, such as those stemming from technological advances.
At a high level, the changes include, but are not limited to, the following:
- Obligations for transactions involving virtual currencies, including to report the receipt of a large amount of virtual currency and to follow associated know-your-client obligations;
- The requirement for certain businesses that initiate or finally receive electronic funds transfers to report instead of the businesses that are intermediaries in these transfers, however the intermediaries must keep records of the transactions;
- The requirement for new information fields to be reported (for example, online identifiers, email addresses, etc.);
- The expansion to all reporting entity sectors of the requirement to obtain and take reasonable measures to confirm the accuracy of information obtained on the beneficial owners of a corporation, trust or other entity that is a client;
- The requirement to aggregate on the beneficiary when applying the 24-hour rule to certain transactions;
- The requirement for financial entities to treat prepaid payment products and related accounts similarly to bank accounts;
- The expansion to all reporting entity sectors of the requirement to determine whether a client is a politically exposed person or the head of an international organization in certain circumstances;
- The requirement for the life insurance sector to keep records and verify the identity of a beneficiary before a payout; and
- New methods that reporting entities can use to verify the identity of person and entities.
FINTRAC's guidance has been updated to reflect these requirements.
FINTRAC expects reporting entities (REs) to comply with the amendments, but understands that many may face challenges in meeting these obligations. For further information on how FINTRAC will assess compliance with the new requirements, please consult the May 18, 2021 Notice on the assessment of obligations coming into force on June 1, 2021. Furthermore, additional flexibilities that are being provided by FINTRAC on an exceptional and transitionary basis can be found by consulting the November 16, 2020 Notice on forthcoming regulatory amendments and flexibility.
FINTRAC would like to thank the businesses that have provided input on the implementation of the new requirements and on the related guidance. With their feedback, FINTRAC has been able to create better products that support our common goal of having a strong anti-money laundering and anti-terrorist financing regime that keeps our financial system secure.
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