Financial Crime World

Canada’s Anti-Money Laundering and Terrorist Financing Regime: A Review of Compliance with FATF Recommendations

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A recent report by the Financial Action Task Force (FATF) has evaluated Canada’s compliance with its technical requirements for preventing money laundering and terrorist financing. The report assesses Canada’s progress in implementing the 40 recommendations outlined by FATF.

Compliance Highlights

  • National Cooperation and Coordination: Canada is largely compliant with this recommendation (R.2).
  • Confiscation and Provisional Measures: Canada has made significant strides in implementing these measures (R.4).
  • Financial Intelligence Units: Canada is also largely compliant with this recommendation (R.29).

Areas for Improvement

  • Customer Due Diligence for Non-Profit Organizations: Canada is partially compliant with this recommendation (R.8).
  • Transparency and Beneficial Ownership of Legal Persons: Canada has room for improvement in implementing these measures (R.24).
  • Regulation and Supervision of DNFBPs: Canada is partially compliant with this recommendation (R.28).
  • Prevention of Misuse of Cash Couriers: Canada needs to improve its implementation of measures to prevent the misuse of cash couriers (R.32).
  • International Cooperation through Mutual Legal Assistance: Canada has room for improvement in ensuring international cooperation (R.37).

Non-Compliance and Areas Requiring Further Improvement

  • Financial Institution Secrecy Laws: Canada is non-compliant with this recommendation (R.9).
  • Reliance on Third Parties: Canada needs to improve its reliance on third parties (R.17).
  • Internal Controls and Foreign Branches and Subsidiaries: Canada has not fully implemented measures for internal controls and foreign branches and subsidiaries (R.18).
  • Prevention of Misuse of New Technologies: Canada has not fully implemented measures to prevent the misuse of new technologies (R.15).
  • Wire Transfers: Canada needs to improve its implementation of measures to prevent the misuse of wire transfers (R.16).

Conclusion

While Canada has made significant progress in implementing FATF recommendations, there are areas where further improvement is needed to strengthen its anti-money laundering and terrorist financing regime.