As new technology introduces new means of transferring funds and generates unprecedented volumes of transactions globally, regulators are watching closely as opportunities for illicit transactions also emerge.
To address these and other related developments, a number of amendments to the regulations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) were published in the Canada Gazette in 2019 and 2020, the bulk of which will come into force on June 1, 2021. Taken together, these amendments effect a sizeable overhaul of the anti-money laundering and anti-terrorist financing (AML/ATF) regulatory landscape in Canada.
Osler’s Financial Services Regulatory Group has developed a client guide with a focus on the changes coming into force on June 1 that will be of most interest to entities with obligations under the PCMLTFA. The guide is divided into two parts: Part 1 sets out changes of general application while Part 2 sets out sector-specific changes.
We have made updates, which are accessible through the links below, to reflect additional guidance released by FINTRAC on May 4, 2021 regarding third party identification requirements, methods for identifying individuals and entities, the travel rule, the 24-hour rule, prepaid products and accounts, terrorist property reporting, and compliance program requirements. These new and updated guidance documents will also come into force on June 1, 2021.
At a high level, the changes coming into force on June 1 touch on the following areas:
new virtual currency obligations for all reporting entities
new definitions under the PCMLTFA
identification and reporting obligations regarding politically exposed persons and heads of international organizations
obligations for foreign money services businesses
prepaid card obligations for financial entities
beneficial ownership reporting obligations for all reporting entities
recordkeeping and reporting changes for all reporting entities
the 24-hour rule
business relationship screening requirements
ongoing monitoring requirements
identification methods for know-your-client checks
Structure of this guide
Part 1 sets out changes of general application that will apply to all Reporting Entity sectors as of June 1, 2021. Part 2 sets out sector-specific changes that apply to certain Reporting Entity sectors as of June 1, 2021. Please note that we have not identified every change; the focus of this guide is rather on those changes that will be most important to entities with obligations under the PCMLTFA.
We have also created a consolidated list of links to the new and updated guidance from FINTRAC which may be accessed here.
Download: Anti-money laundering in Canada: A guide to the June 1, 2021 changes [PDF]
Part 1: Changes affecting all reporting entities
- Beneficial ownership requirements and proof of corporate existence
- Screening for politically exposed persons and heads of international organizations
- Ongoing monitoring requirements
- The 24-hour rule
- Recordkeeping: Unsuccessful reasonable measures
- Methods to identify individuals and entities
- Compliance program requirements
- Third party determination requirements
- Terrorist property reporting
Learn more about changes affecting all reporting entities
Part 2: Sector-specific PCMLTFA changes