Canada’s Banking System Takes a Stance Against Money Laundering and Terrorist Financing

The Bank of Canada has taken proactive measures to prevent the misuse of its services and delivery channels for illegal purposes, aiming to maintain a secure, stable, and resilient financial system infrastructure.

Financial Crimes Risk Management Program (FCRM Program)

To achieve this goal, the institution has developed a comprehensive Financial Crimes Risk Management Program (FCRM Program) designed to detect and deter suspected money laundering, terrorist financing, and activities prohibited by sanctions. At the heart of the program are a team of specialists who utilize cutting-edge analytics and technology to stay abreast of the latest anti-money laundering (AML) and anti-terrorist financing (ATF) sanctions, trends, and typologies.

Key Components of the FCRM Program

The Bank of Canada’s FCRM Program includes:

• Senior Management Oversight: Ongoing oversight by senior management to ensure that the program is effective in preventing financial crimes.
• Documented Policies and Procedures: Clear policies and procedures are in place to guide employees on how to identify, report, and prevent financial crimes.
• Ongoing AML and ATF Sanctions Awareness Training for Employees: Regular training sessions are conducted to educate employees about AML and ATF sanctions, trends, and typologies.
• Periodic Risk-Based Due Diligence and Assessment of Client Relationships: The Bank periodically assesses the risk associated with client relationships and conducts due diligence to ensure that they comply with AML and ATF regulations.
• Ongoing Monitoring of Transactions and Activity: The Bank continuously monitors transactions and activity to detect suspicious behavior and prevent financial crimes.
• Screening against Terrorist and Other Sanctions Watchlists: The Bank screens all clients and transactions against terrorist and other sanctions watchlists to ensure compliance with international sanctions.
• Reporting of Prescribed Transactions, as Applicable: The Bank reports prescribed transactions to the relevant authorities, as required by law.
• Assessment of Money Laundering, Terrorist Financing, and Sanctions Risk: Regular assessments are conducted to identify potential risks associated with money laundering, terrorist financing, and sanctions violations.
• Independent Testing of Processes and Controls: Independent testing is performed to ensure that the Bank’s processes and controls are effective in preventing financial crimes.

Ensuring Effectiveness

To ensure the effectiveness of its FCRM Program, the Bank of Canada periodically assesses its controls and processes to guarantee they continue to meet the evolving financial crimes risk environment. This commitment has led to the implementation of a comprehensive program that aligns with international standards and ensures the security, stability, and resilience of Canada’s banking system.