The Department of Finance Canada recently released the final amending regulations that amend the existing Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Regulations). Our previous update on other aspects of the amendments can be found here.
The Regulations attempt to bring Canada’s anti-money laundering and anti-terrorist financing (AML/ATF) regime in line with international standards, while also addressing the recent industry reports commissioned by the Government of British Columbia.
The high-level takeaways are that the Regulations will:
- extend the “travel rule” (whereby certain reporting entities are required to pass on identifying information about a customer to the next reporting entity when sending money on the customer’s behalf) to businesses dealing in virtual currencies, by requiring them to obtain and hold originator and beneficiary information;
- modify the definition of “business relationship” for the real estate sector, which means that real estate developers, real estate brokers and sales representatives are deemed to be in a “business relationship” with a client after a single transaction or activity that triggers the client identification requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its associated regulations;
- apply stronger customer due diligence requirements and beneficial ownership requirements to certain designated non-financial businesses and professions; and
- require certain customer due diligence measures for casinos in line with international standards.
There have been other recent amendments to the Regulations, which had a phased implementation strategy and staggered coming into force dates. The prohibition on the use of scanned or photocopied documents was repealed and took effect upon registration in June 2019. The 2014 legislative amendments for virtual currency dealers came into force on June 1, 2020, which now require virtual currency dealers to register as money services businesses and comply with other legislative obligations, such as suspicious transaction reporting and implementing a compliance program. With the exception of certain amendments to the Cross-border Currency and Monetary Instruments Reporting Regulations, which came into force on June 1, 2020, all other amendments to the Regulations will come into force on June 1, 2021.
Please contact the author for any questions regarding this article.
The author would like to thank Breanne Matheson, summer student, for her contribution to this legal update.