Financial Crime World

Canada’s Anti-Money Laundering Regulations Take a Step Forward: A Look at the Latest Draft Regulations

The Canadian government has released draft regulations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), aimed at strengthening Canada’s anti-money laundering (AML) and counter-terrorism financing (CFT) regime. The changes are designed to bring Canada in line with international standards and will come into effect on July 5, 2024.

Key Objectives

The regulatory impact analysis statement accompanying the draft regulations highlights several key objectives:

  • Improve reporting obligations for sanctioned property: Currently, there is no standardized process for reporting terrorist property. Under the new regulations, regulated entities will be required to report all transactions involving the property of individuals or entities listed under various Canadian sanctions legislation.
  • Enhance due diligence requirements for money services businesses (MSBs): MSBs will be required to conduct criminal record checks for key personnel and implement a full AML compliance regime. Additionally, MSBs that provide acquiring services for white-label ATMs will need to register with FINTRAC.

New Requirements

The draft regulations introduce several new requirements:

  • Title insurers: The PCMLTFA’s scope is extended to include title insurers, who will now be subject to the same reporting and record-keeping requirements as other financial institutions. This includes verifying the identity of clients and determining whether they are politically exposed persons (PEPs).
  • Real estate brokers and sales representatives: These individuals will be required to identify unrepresented parties in real estate transactions, aimed at reducing the risk of money laundering in the sector.

Public Comment Period

The draft regulations are now open for public comment until August 4, 2024. Parties affected by these changes should review them carefully and consider submitting comments before the deadline.

Source: Blake, Cassels & Graydon LLP

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