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Anti-money laundering and anti-terrorist financing developments

anti-money launderingNew anti-money laundering and terrorist financing guidelines by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) are now in force. FINTRAC recently released new guidelines in respect of politically exposed persons (PEPs) and Heads of International Organizations (HIOs) (the “Guidelines”). The Guidelines were effective June 17, 2017, and complement new regulatory provisions which came into force on June 17, 2017, under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the “AML Act”).

A PEP is a past or present holder of specified public offices, for example a head of state. An HIO is the head of an international organization established by a government, or an institution established by an international organization, for example the President or Chief Executive Officer of any of these entities.

Reporting entities must take reasonable measures to identify PEPs and HIOs and their close relatives, and carry out other due diligence, because transactions involving PEPs and HIOs are at inherently high-risk for money laundering and terrorist financing offences.

There are separate guidelines for financial entities, securities dealers, life insurance companies, agents and brokers, and money services businesses (all of which are “reporting entities”, with reporting, record-keeping and other obligations under the AML Act).

You can read the Guidelines here.

Additionally, new requirements for the verification of client identity pursuant to regulations of the AML Act, have been postponed for 7 months. The requirements were to come into force on June 30, 2017, but will now come into force on January 23, 2018. The extension will give regulators more time to clarify certain elements of the new requirements, given some of the questions raised by anti-money laundering professionals.

For more information on the anti-money laundering regime in Canada, read the upcoming Release for Finance and Accounting PolicyPro, published by First Reference. The Release introduces a new chapter entitled “Anti-Money Laundering”, covering the anti-money laundering and anti-terrorist financing regime in Canada.

Apolone Gentles, JD, CPA,CGA, FCCA, Bsc (Hons)

Apolone Gentles is a CPA,CGA and Ontario lawyer and editor with over 20 years of business experience. She has held senior leadership roles in non-profit organizations, leading finance, human resources, information technology and facilities teams. She has also held senior roles in audit and assurance services at a “Big Four” audit firm. Apolone has also lectured in Auditing, Economics and Business at post-secondary schools.
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