FINTRAC has released a statement that they are currently managing a cyber incident and have temporarily taken their corporate systems offline. This means that LCTRs, EFTRs and STRs cannot currently be submitted. There is no indicated resolution time at the moment, however, we will keep our followers up to date as we get updates.
If you have any questions in regards to this or other matters concerning FINTRAC, please contact one of our AML experts now at contactus@theamlshop.ca
On February 14th, the Bank of Canada published new guidance on the Retail Payment Activities Act (RPAA).
As we have been informing our clients, under the legislation, registration with the Bank of Canada is mandatory for PSPs starting November 1st, 2024. Your registration with the Bank of Canada must be filed by November 15th, 2024. Learn more about the regulations here.
Additionally, the Bank of Canada has recently released a step by step guide for new registrants. This guide will help applicants gather documentation and information required to complete the registration forms.
There have also been new policies and amendments announced under this guidance. Notably, new PSPs are now obliged to new quantitative reporting when registering and on an annual basis. Conveniently, the Bank of Canada has offered guidance on how to report these metrics in their newly released policy.
Additionally, any amendments to registration applications must be reported to the Bank of Canada. This includes any changes to information provided in your application; please note, it is the applicant’s mandatory responsibility to inform the BOC of these changes. Read more about the policy here.
At The AML Shop, we can help PSPs register under the new regulations of the Retail Payment Activities Act and help plan for these upcoming changes. Reach out to us today to get started!
Attention Regulated Entities!
As part of its enhanced risk-based supervisory approach, FINTRAC has recently implemented the use of electronic questionnaires consisting of a self-assessment and request for compliance and business information. The questionnaires may take a variety of forms depending on the sectors, organizations, and assessment objectives and represents the diversification of tools and interventions to promote compliance. This new process will assist FINTRAC by leveraging data to assess the effectiveness of the compliance programs and MLTF risks of reporting entities.
ECAR’s are very important for your business’ compliance program and they must be attended to.
Read our latest article on ECAR’s to learn more.
As you might already be aware, the final regulations related to the Retail Payment Activities Act (RPAA) were recently released. If you didn’t see them, here is a link.
RPAA will apply to payment service providers (PSP) that perform one or more of the five payment functions defined within the legislation:
Providing or maintaining a payment account
Holding funds
Initiating an electronic funds transfer
Authorizing or transmitting instructions about an electronic funds transfer
Clearing or settling
If you are a money services business (MSB) or PSP, this legislation will almost certainly apply to you. Generally, the obligations under the RPAA will require you to have an operational framework, a safeguarding client funds framework, and an incident reporting framework. The Bank of Canada (the Bank) is expecting registration to begin November 1, 2024, with full compliance expected by November 1, 2025.
If you have not already done so, please sign up to receive updates from the Bank. You can do so here.
The Bank is currently seeking volunteers to help with their registration pilot project. You can sign up here until December 15th, 2023.
There are many other opportunities to get involved in the industry discussions or provide feedback. You can also contact us directly to find out more about industry participation. The more participation we can get from the community, the more likely we are to effect some real change.
Although this new legislation brings with it many compliance challenges, the AML Shop is here to help. If you are not sure how or if RPAA applies to your business, or if you have any questions, please do not hesitate to reach out to us.
This week, the expected final amendments to the PCMLTFA were announced. As expected the final amendments heavily cover mortgage entities, armoured cars and general currency movement.
The key issues as outlined the Canada Gazette include:
Renewing and improving Canada’s AML/ATF regime
A cost recovery framework for FINTRAC compliance and related activities
Obligations for the Armoured Car Sector
Obligations for Mortgage Entities
Strengthening Correspondent Banking Relationships
Increasing cross-border currency reporting penalties
Streamlining requirements for sending AMP’s documents to reporting entities
Enhancing the MSB registration framework
Technical amendments
Read the full amendments via the Canada Gazette.
Stay tuned to the AML Shop website and LinkedIn for further updates and commentary from our AML experts on how these changes may affect your business. And as always, if you need help navigating these amendments or any other AML related topic, reach out to one of our experts today at contactus@theamlshop.ca
The AML Shop’s Yong Li was recently featured in Money Laundering Bulletin to speak on Infowars - The Large Language Model Threat. In this article, we learn about how AI can undermine anti-money laundering and counter terrorist financing defences, including evading and attacking KYC data controls.
Yong contributes key expert insights to this discussion and provides recommendations on what vendors, regulators and obligated entities may need to enforce to prevail in the use and abuse of AI in Money Laundering and AML.
The Canadian real estate sector has become a hotbed for criminal activity, with money laundering (ML) and terrorist financing (TF) posing a significant threat to its integrity.
Compliance with the regulatory framework is of utmost importance to thwart these risks and preserve the sanctity of this sector.
We have put together an article outlining the 10 unique and potent suspicious indicators that can be used to identify potential ML/TF in the real estate sector.
On March 7th 2023, the Retail Payment Activities Act Committee (RPAC) held a meeting to discuss proposed Regulations for the Retail Payment Activities Act, as published in Part I of the Canada Gazette.
We want to extend a reminder to you that the comment period is open and ends on March 28th, 2023.
At The AML Shop, our experts are busy reviewing and curating analysis with the CMSBA to drive forth feedback to the committee. We would like to call out to our Subject Matter Experts and other followers to supply any important feedback to us that you would like to be communicated to the Bank of Canada; we will consider your feedback in our analysis to determine our final comments.
A full summary of notes from the RPAC meeting is here
You may forward your feedback and comments to contactus@theamlshop.ca and as always, if you have any questions or need help with your AML compliance, be sure to reach out.
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.
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
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.
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.
On February 11th, Matt McGuire (The AML Shop Principal and Practice Leader) was featured in the New York Times article “Can Money Buy Love? Romance Scammers Want You to Believe It”.
This article outlines how romance scams in Canada have more than doubled during the pandemic, costing Canadians millions of dollars.
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.
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.
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)
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.
