Money services businesses (MSBs) must fulfill specific obligations as required by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations, to help combat money laundering and terrorist activity financing in Canada.
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is Canada’s financial intelligence unit. Its mandate is to facilitate the detection, prevention and deterrence of money laundering and the financing of terrorist activities, while ensuring the protection of personal information under its control. Enforcement of the PCMLTFA and associated Regulations are being supervised by FINTRAC.
FINTRAC requires MSBs to implement the following practices:
- Registration: Before beginning to operate in Canada, you must register your MSB with FINTRAC.
- Compliance program: Money services businesses must implement a compliance program. A strong compliance program will form the basis of meeting all your regulatory requirements.
- Know your client: Money services businesses must verify the identity of persons and entities for certain activities and transactions, and carry out other customer due diligence activities
- Reporting: Money services businesses must submit the following reports to FINTRAC:
- Suspicious transaction reports
- Terrorist property reports
- Large cash transaction
- Electronic funds transfer reports
- Record keeping: Money services businesses must keep certain records, including records related to transactions and client identification.
Penalties for non-compliance with FINTRAC requirements
FINTRAC has the legislative authority to issue administrative monetary penalties (AMPs) to reporting entities (MSBs) that are found to be non-compliant with the PCMLTFA and associated Regulations.
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