The AML Shop in Money Laundering Bulletin

The AML Shop Team (Isabelle Birebent, Etienne Noel and Yong Li) have extended their expert insights in the area of KYC and Due Diligence when it comes to confirming personal details via external sources, in the Money Laundering Bulletin article "External data sources: key inputs for compliance and investigations".

Learn here what AML Experts suggest as the best tips for confirming personal details of suspected money-launderers by way of external sources, including google searches, reddit, internet archives and the dark web.

Welcome to the Mortgage Sector Video

Soon Mortgage Brokers and Companies will be regulated under the PCMLTFA. Recent draft regulations have been set forth, with expected regulatory changes to come later this year. This means that the mortgage sector in Canada will soon be covered by federal anti-money laundering legislation. Mortgage companies will likely be expected to have a compliance plan in place within 10-15 months.

We have recorded this helpful video which outlines what this means for the mortgage sector and the best-practices for developing an AML compliance program.

If you know someone working in the mortgage space, please share this video and don't hesitate to reach out to us should you have any questions contactus@theamlshop.ca

Harm Series Article #3- Violations relating to assessing and documenting a company's risk based approach.

FINTRAC defines "harm" as the degree to which a violation interferes with achieving the objectives of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (“PCMLTFA”).

In the latest Harm Series article, we will have a look at violations related to assessing and documenting the risks of Money Laundering and Terrorist Financing (often referred to as a company’s risk-based approach), and FINTRAC’s stated position on the harm that different types of deficiencies entail.

Harm Series - Article #2 - Violation related to the appointment of a Compliance Officer

Did you know that failing to appoint a Compliance Officer is a serious offence that can lead to an administrative monetary penalty (“AMP”) of up to $100,000? But just naming someone a Compliance Officer is not enough.  FINTRAC issues deficiencies and penalties based on the qualifications, role definition and performance of the Compliance Officer.

Today we bring you another article in our Harm Series, this time highlighting the importance of Compliance Officers and the potential penalties your business may face in violation. 

Harm Series - Article #1: What is "Harm Done" and how is it assessed by FINTRAC?

What is "Harm Done" and how is it assessed by FINTRAC?

According to section 73.11 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (“PCMLTFA”), when deciding whether a penalty should be considered, FINTRAC assesses the “harm done” by a violation by reviewing various factors. FINTRAC considers the nature, relative importance, extent, and root cause of the non-compliance, mitigating or aggravating factors, and the business’s history of compliance. 

Today we bring you the first article in our ongoing Harm Series; a series where our AML experts dive deep into the topic of Harm to help your business stay out of harm's way. In this article, we will outline what constitutes Harm and how FINTRAC assesses it. 

Does your Payment Services business know how to register with FINTRAC?

The AML Shop’s Marcelle Dadoun is back with another article on Payment Services.

In our last article, we discussed the different types of services that qualify as “Payment Services” under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) which compel registration as a Money Services Business.  

This week’s article will touch on the registration process.

There are two stages of registration with the Financial Transactions and Reporting Analysis Centre of Canada (FINTRAC): Stage one is pre-registration. Stage two is the registration itself.


STR Changes to come in 2023

Attention all reporting entities!

FINTRAC has announced that they are expecting to implement important changes to Suspicious Transaction Reports (STR’s) in 2023. The form will now include legislative amendments that came into effect in June 2021. Additionally, the forms functionality will change and provide a more streamlined approach for submitting STR’s.

There are draft documents now available via FINTRAC to help your business prepare for these changes. Click the button below to see new documents for:

  • STR mock form

  • Reporting suspicious transactions to FINTRAC guidance

  • STR JSON schemas (reports and transactions)

Does your business qualify as a provider of payment services under the (Money Laundering) and Terrorist Financing Act (PCMLTFA)?

On April 5th, 2022, amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its regulations were registered and implemented adding new categories of money services business (MSB) activities that were previously not considered to be covered.  The definition of electronic fund transfer (EFT) was also revised during the course of these amendments.

On April 27th, 2022, the Financial Transactions and Reporting Analysis Centre of Canada (FINTRAC) also retracted its policy position concerning these same activities.

In their policy interpretation #7670, FINTRAC previously took the position that persons or entities that were engaged in remitting or transmitting funds by any means solely for the purpose of utility payments, payroll or commission services, mortgage or rent payments or certain tuition payments were not considered to be MSBs because the transfer of funds was corollary to the actual service being provided.

In the same policy interpretation, FINTRAC also previously took the position that those who were engaged in providing settlement directly to merchants on behalf of the merchant’s customers, for the purchase of goods and services were also not considered MSBs.  Again, the reason was that the transfer was corollary to the service being provided.

The amendments to the PCMLTFA and its regulations added crowdfunding and payment services as activities now captured as MSB activities.  Additionally, the definition of EFT was changed to remove the exemption of “carrying out transactions by means of a credit/debit card for the payment of goods and services”.  This means that persons or entities that provide these services, which are now all considered “payment services”, must now comply with the PCMLTFA and its regulations.

In a 4-week series of articles, Marcelle Dadoun from the AML Shop will explore these changes in detail and provide some insight as to what this really means to persons or entities that provide payment services.

This week’s article addresses the question of what types of services qualifies as payment services under the PCMLTFA.

The AML Shop Announce New Principals - Marie Noel, Marcelle Dadoun and Adam Feldman

FOR IMMEDIATE RELEASE 

Toronto, Canada (November 15, 2022) – Today Matt McGuire and Monika Cywinska, founders of The AML Shop, have announced that the acclaimed anti-money laundering (AML) consulting firm’s advisors Marie Noel, Marcelle Dadoun and Adam Feldman are joining the organization as Principals and owners, as they continue to contribute to the growth and success of The AML Shop in their respective areas of expertise.

This exciting organizational change comes at the helm of the expansion and success of The AML Shop’s evolution in the AML, counter-terrorist financing, sanctions compliance, and risk management space. Since The AML Shop’s inception in 2016, the firm has served hundreds of clients across Canada and abroad, and expanded its team to over 40 AML experts, rapidly becoming Canada's leading business solution for AML compliance matters.

Bringing in its key employees as part of its new broader management structure, The AML Shop is strengthening its commitment to client service excellence, continuity, and subject matter specialization.  With its new Principals, it is positioned for its next stage of growth.

 ABOUT THE NEW PRINCIPALS

Marie Noel has over 20 years collective experience with financial institutions, insurance companies, and money services businesses, and will join as Principal, Outsourced Services and Investigations. Bringing her breadth of experience to managing The AML Shop’s outsourced services, Marie ensures clients are not only meeting their compliance obligations, but that they have the knowledge and training to understand and respond to compliance risks. Her background in managing investigations and high-risk accounts and businesses is invaluable to clients looking to make informed business decisions. She also works with clients and regulators alike on the development and implementation of remediation plans.

 Marcelle Dadoun leads The AML Shop's compliance program design division and provides advisory support to all reporting types, including new and evolving money services businesses, payment service providers and fintech clients looking to navigate local and international regimes for registration, licensing, banking access, and regulations. She will be joining as Principal, Program Design and Advisory. With over 20 years of compliance experience, Marcelle came to The AML Shop after serving in senior level roles with international banks and has since become a thought leader for emerging and newly regulated industries, such as crypto currency, payment services providers and prepaid card powered neo-banks.  She specializes in the development and maintenance of policies, procedures, risk assessments and training programs. Marcelle serves on several government and industry advisory groups and is a Certified Anti-Money Laundering Specialist and has additionally obtained a certification in risk management from the Association of Certified Anti-Money Laundering Specialists, as well as the Chainalysis Inc. Cryptocurrency Fundamental Certificate.

 Adam Feldman leads The AML Shop's risk management and technology divisions and will be joining as Principal, Risk Management and Technology.  As a former process engineer, Adam has a passion and talent for understanding, quantifying, and implementing efficient mitigation systems and processes across multiple industries and jurisdictions. Adam helps The AML Shop’s clients right size and optimize their compliance systems, processes and staffing, leveraging a toolbox of technology solutions. Those engagements are often designed as a response to regulatory examination findings or companies experiencing significant growth or change.  Adam is recognized as a specialist in the real estate and professional services sector. He is a Certified Anti-Money Laundering Specialist and has additionally obtained a certification in risk management from the Association of Certified Anti-Money Laundering Specialists.

“We are thrilled to announce the appointment of Marie, Marcelle and Adam as Principals at The AML Shop, each of whom are proven leaders in their respective areas of expertise and incredibly talented individuals that live the values The AML Shop is so proud of, helping us build a centre for AML excellence” says Monika Cywinska, Managing Director of The AML Shop. 

“This progressive change to our organization is a vital step forward to drive continued growth and help super-serve our clients with enhanced bench-strength and increased specialization and continuity of services. We are truly honoured to have them join as Principals and play a larger role in the growth and success of The AML Shop.”

Bank of Canada Supervisory Framework for Retail Payment Activities Act

This week, the Bank of Canada published their Supervisory Framework related to the Retail Payment Activities Act (RPAA).

There are several important changes for Payment Service Providers that will be regulated under the RPAA. The AML Shop is here to help your business maintain compliance and navigate the three pillars of the Bank of Canada's latest framework: Registration, Risk Monitoring and Enforcement.

Whether you are a MSB that needs to register as a Payment Service Provider under the RPAA or an existing Payment Service Provider, The AML Shop is your partner in RPAA compliance. Contact one of our AML Advisors today for more information and to get started.

Virtual, real or hybrid? – AML training post pandemic - An article featuring Matt McGuire

The AML Shop’s Matt McGuire (Practice Leader) was recently interviewed for the Money Laundering Bulletin to discuss what AML/CFT training looks like post pandemic.

Matt discusses the benefits of keeping training programs ‘real’ in whichever medium they are created in, acknowledging and reacting to a growing thirst for more short burst (15-minute) virtual training segments that focus on in-person live virtual content as opposed to slide deck presentations.

The AML Shop's Yong Li featured in Money Laundering Bulletin - Essential ingredients - data for compliance.

The AML Shop’s Yong Li (AML Advisor) has been called upon again by the Money Laundering Bulletin to lend his expert insights on AML/CFT Technology in the feature “Essential ingredients - data for compliance”. 

This feature discusses how making a decision based on incorrect data, while possibly rational, will not be sufficient for an AML examiner.  Yong highlights that the preparation of accurate data inputs in conjunction with AI assisted AML systems, is the key to accurate results. 

Ultimately, a mix of machine intelligence and human intelligence is ideal.

Read the full article by clicking the button below.

The AML Shop's Matt McGuire featured on CBC.CA

Matt McGuire is featured today in the CBC.ca article “Quebec casinos, gaming halls still vulnerable to money laundering by organized crime, experts say”. This journalistic analysis centres in on Quebec Casino’s and Gambling Halls and the associated vulnerability to money laundering and organized crime.

Additionally, this insightful article containing expert commentary from Matt McGuire and other experts discusses how Loto-Quebec is implementing controls to keep money-launderer’s from funnelling illicit funds through the gaming system.

Read the full article with Matt’s contribution, via the button below.

VIRTUAL EVENT - Most PSPs are now considered MSBs. Have you registered with FINTRAC yet?

THIS IS A FREE EVENT!

On April 27, 2022, new regulations were introduced by the Department of Finance enacting requirements specifically targeted towards Payment Services Providers (PSPs) and crowdfunding platforms. FINTRAC has recently sent a follow-up notice on July 21, 2022, related to the fact that there is an expectation that ALL PSPs, with very few exceptions, register with FINTRAC. The notice can be found here: link

The intent of FINTRAC’s notice is to most likely capture entities that would be covered under the changes coming as part of the new Retail Payments Activity Act. With the rescinding of PI-7760 by FINTRAC, most entities providing third-party payments services must immediately register with FINTRAC.

In this session, industry experts including The AML Shop’s Marcelle Dadoun (AML Advisor) have been brought together to provide information:

  • Where did this come from and why now?

  • What does it mean to PSPs and the associated definition?

  • Consequences of not registering.

  • Scope of responsibility

  • Suggested Steps to take

  • What does it mean to MSB/FMSB who are servicing PSPs or being serviced by PSP?


Following the presentation, there will be a short Q&A/Panel to answer any questions you may have!

Join us on Aug 25/22 from 1-3 pm!

Presenters:

  • Marc Lemieux - Lead counsel at Lemieux Business Law

  • Amber Scott - Founder & CEO - Outlier Solutions Inc.

  • Peter Morcos - Founder & Practice Leader - Reliance Compliance Solutions Inc. (RCS)

  • Duane Tough - Founder - Tough Money Group Ltd.

  • Susan Han - Partner - WeirFoulds LLP

  • Joseph Iuso - Executive Director - CMSBA

  • Marcelle Dadoun - AML advisor- The AML shop

FINTRAC - Crowdfunding Platforms and certain PSP's must register with FINTRAC

IT’S OFFICIAL – FINTRAC announced last week that all payment service providers are required to be registered as MSBs if they are providing:

 

  1. invoice payment services when they act as an intermediary between a payer and a payee to make payments to invoices, such as those pertaining to utilities, payroll and commission, mortgage and rent, or tuition

  2. payment services for goods or services when:

    1. they receive payment instructions and act as an intermediary between a payer purchasing goods or services and a payee supplying goods or services;

    2. the payer consents to make the payment for the goods or services through them; and

    3. the payee has an agreement with them to have access to the transfers carried out as payment for the goods or services.

  3. crowdfunding platforms that provide services to raise funds or virtual currency.

 

If you are not clear whether you fall into these categories or if you need help with registration or compliance program documents, The AML Shop is here to help.  Contact us today via the button below.

Money Laundering and The Real Estate Sector - Points to Ponder by Abhishek Desai

The Real Estate sector contributes more than 10% of the GDP in Canada – estimated to be worth 225 billion in 2022.

A report produced by the Criminal Intelligence Service Canada (CISC), a national intelligence agency of the RCMP, focused on the scope and extent of money laundering in Canada. The agency found real estate was used extensively as a tool for criminal activity. According to the report, the proceeds of crime are used to buy the property through various schemes.

The AML Shop’s Abhishek Desai is here to give his expert insights on this important topic. Read the article by clicking the button below.

EFT Travel Rule Threshold - FINTRAC Policy Interpretation

There has been some uncertainty regarding when the travel rule obligations apply to international electronic fund transfers (“EFT”) or SWIFT MT-103 messages (or equivalent) (“Prescribed EFT Transactions”).  Specifically, the question being asked is “At what threshold does the travel rule obligation apply to Prescribed EFT Transactions?”

Marcelle Dadoun (AML Advisor at The AML Shop) is here to breakdown this topic in a thorough FINTRAC Policy Interpretation on the EFT Travel Rule Threshold.

Click the button below to read the full article.