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FINTRAC Update – May 2022

Underground Banking through Unregistered Money Services Businesses - https://fintrac-canafe.canada.ca/intel/advisories-avis/bank-eng

FINTRAC Update – April 2022

Crowdfunding platforms and certain payment service providers must register with FINTRAC and the definition of “EFT” was amended​

Amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFR) and the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties (PCMLTFAMP) Regulations have been registered and are now in force.

As a result, crowdfunding platforms and certain payment service providers are now covered as money services businesses (MSBs) or foreign money services businesses (FMSBs) under the PCMLTFA, and have the following obligations:

  • Register with FINTRAC
  • Develop and maintain a compliance program
  • Carry out know your client requirements, including verifying the identity of persons and entities for certain activities and transactions
  • Keep certain records, including records related to transactions and client identification
  • Report certain transactions to FINTRAC

For more information about these obligations, see information about MSBs and FMSBs.

Electronic funds transfer (EFT) definition amendment

Registered MSBs and FMSBs may be affected by the amended EFT definition, specifically those that remit/transmit funds.

MSBs and FMSBs that carry out transactions by credit/debit cards, which permits the payment of goods and services, now have to comply with EFT obligations, including client identification, reporting and record keeping requirements.

Registering with FINTRAC as an MSB or FMSB

Crowdfunding platforms that provide services to raise funds or virtual currency and certain payment service providers must register as MSBs or FMSBs.

MSBs and FMSBs that are already registered with FINTRAC, and which offer services now subject to the Act, must update their registration information to reflect this.

They will now have obligations relating to these services, including updating their compliance program to reflect this additional service, identifying clients, keeping records and reporting certain types of financial transactions to FINTRAC, including suspicious transactions.

For information on how to register as an MSB/FMSB, please visit the following pages on our website:

Source: FINTRAC

FINTRAC Update – March 2022

Special Bulletin – Russian linked money laundering and sanctions evasion
https://fintrac-canafe.canada.ca/intel/bulletins/rlml-eng

FINTRAC Update – March 2022

Update to the FINTRAC Assessment Manual

FINTRAC has updated the FINTRAC Assessment manual  to reflect the recent coming into force of regulatory amendments, and related changes to their examination process. The update it consists primarily of minor language adjustments, additions to existing examination tests, and some new tests. Below is a summary of the changes:

Minor terminology adjustments, additions or changes to align with the PCMLTF Regulations or to reflect amended processes, such as:

  • New terms such as “Dealers in precious metals and precious stones”, “Foreign Money Services Business” and “Virtual currency” are added where applicable.
  • Part 2 – Examination phases: Changes reflect minor adjustments to processes
    – Phase 1 – Planning and scoping
    – Phase 2 – Examination and assessment
    – Phase 3 – Developing conclusions and finalizing the examination
  • Part 3 – Assessment methods: Changes reflect new or amended processes to reflect the PCMLTF Regulations
    – Section 3.1 – Compliance program requirements
    – Section 3.3.4 – International Electronic Funds Transfer Reports
    – Section 3.6 – Foreign branches, foreign subsidiaries and affiliates requirements

New tests or additions to existing tests:

  • Section 3.2.2 – Know your client requirements (Beneficial ownership)
  • Section 3.3.3 – Large Virtual Currency Transaction Reports
  • Section 3.3.4 – International Electronic Funds Transfer Reports
  • Section 3.3.6 – Suspicious Transaction Reports
  • Section 3.4 – Record keeping requirements

FINTRAC has indicated that they will continue to update the manual to reflect amendments to the PCMLTFA and associated Regulations, and as their process evolves.

If you have questions directly for FINTRAC, please contact guidelines-lignesdirectrices@fintrac-canafe.gc.ca

If you have CPABC related questions, please contact regulatory@bccpa.ca

FINTRAC Update

FINTRAC has recently announced that it will be withdrawing a series of temporary supports designed to assist reporting entities experiencing challenging in meeting their obligations due to the impact of public health measures.

Please see FINTRAC’s full notice.

Some of the changes include:

  • Effective March 31, 2022, the temporary flexibility extended to reporting entities with respect to authenticating a government-issued photo ID document at a distance will end. This means that reporting entities will be required to use more than human judgement to authenticate government-issued photo ID document when a person is not physically present.
  • Effective June 1, 2021, reporting entities that are required to verify the identity of a corporation or an entity other than a corporation are required to refer to a record that is authentic, valid and current.
  • As set out in the FINTRAC guidance of April 23, 2020, for any person or entity whose identity was verified using the temporary flexibility provided, reporting entities were expected to:
    • keep a record of all clients identified using this temporary method; and
    • re-verify the identity of their clients in accordance with the PCMLTFR when the physical distancing measures have been lifted by public health authorities.

If you are a reporting entity that is experiencing pervasive reporting challenges due to the pandemic that are not addressed in this communication, please contact your FINTRAC regional compliance officer or send an email to guidelines-lignesdirectrices@fintrac-canafe.gc.ca.

FINTRAC Updates

Corporate Beneficial Ownership

As of October 1, 2020 private companies subject to the B.C. Business Corporations Act are required to prepare and maintain a transparency register of beneficial owners, including individuals who have direct or indirect control of the company or its shares.

Land Owner Transparency Registry

The Land Owner Transparency Registry (LOTR) is a registry of information about individuals who are considered to have an indirect interest in land which will be housed in a public database. Beginning November 30, 2020, the Land Owner Transparency Act (LOTA) requires that when an application is made to register an interest in land, a transparency declaration must be filed with the LOTA administrator.

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