AML/CTF Regulatory Body in Canada
Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA)
- imposes anti-money laundering requirements on financial institutions and other business entities.
The 3 main objectives of the PCMLTFA are:
- To execute measures to identify and stop money laundering and the financing of terrorist activities in order to facilitate the investigation or prosecution of money laundering and the terrorist financing offences.
- To react to the threat presented by coordinated crime by providing law enforcement officials with the information they need to investigate and prosecute money laundering or terrorist financing offences.
- To help in fulfilling Canada's global responsibilities to participate in the battle against money laundering and the fight against terrorist activities.
Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
The Financial Analysis Unit (UAF) is an autonomous entity that exercises the technical secretary of the National Committee against Money Laundering and Terrorism Financing, attacheed as a unit of the Ministry of Finance. The main task of the UAF is to analyse, identify and submit financial analysis reports to the Public Ministry regarding possible infractions of money laundering, previous infractions and the financing of terrorism.
How to comply with AML/CTF regulations in Canada
The PCMLTFA requires financial institutions and other business entities to have a Compliance Program. Institutions will have to undergo a FINTRAC compliance examination that will assess whether an entity is meeting its obligations under the legislation. In order to comply with AML/CTF regulations in Canada, the Compliance Program must include, and provide detailed information about, the following:
- Appoint a Compliance Officer
- Develop and apply written compliance policies and procedures including customer identification and due diligence requirements, mainly for financial institutions.
- Conduct an assessment of money laundering and terrorism financing risks.
- Record keeping of data - develop and maintain a written, ongoing compliance training programme for employees and agents.
- Ongoing monitoring and reporting: conduct and document an effectiveness review of the policies and procedures, the risk assessment and the training programme. This review must be carried out every two years by an internal or external auditor.
- Implementation of client identification
What are my AML/CTF reporting obligations?
- Large Cash Transactions - persons and entities that receive, from a client, an amount in cash of CAD$10,000 or more in the course of a single transaction, unless the amount is received form a financial entity or a public body. A single transaction includes two or more cash transactions of less than CAD$10,000 each if they are made within 24 consecutive hours.
- Financial entities, MSB and casinos must report the sending out of Canada, or the receipt from outside Canada, of international electronic funds transfers of CAD$10,000 or more in the course of a single transaction.
- SWIFT MT 103 messages.
- Casinos are obligated to report disbursements of CAD$10,000 or more.
- Suspicious Transactions - Any activity that raises suspicions that the transaction is related to the commission or the attempted commission of a money laundering or terrorism financing activity.