Financial Crime World

Canada’s Financial Regulators Crack Down on Compliance with Tough New Rules

In a bid to strengthen its fight against money laundering and terrorist financing, Canada’s financial regulatory body has rolled out a slew of new measures aimed at ensuring compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

Comprehensive Sector-Specific Guidance

At the heart of the initiative is a comprehensive list of sector-specific guidance, which provides detailed instructions on how to comply with the act and associated regulations. The guidance covers:

  • Reporting requirements
  • Customer due diligence procedures
  • And more

This guidance is designed to help financial institutions avoid non-compliance penalties.

Policy Interpretations for Technical Clarity

In addition to the new guidelines, FINTRAC has also issued policy interpretations to provide technical clarity on certain provisions of the Act. These interpretations are intended to:

  • Help financial institutions understand their obligations
  • Make informed decisions about compliance

Electronic Reporting Options

Financial institutions can submit reports electronically through a range of methods, including:

  • FINTRAC Web Reporting System
  • API report submission
  • Batch reporting
  • Upload options

The agency has also provided detailed technical specifications for each method, as well as information on agreements with service providers.

Regular Examinations and Compliance Enforcement

To ensure compliance, FINTRAC conducts regular examinations of financial institutions, using a standardized assessment manual to evaluate their adherence to the Act and regulations. Institutions that fail to comply may face:

  • Criminal penalties
  • Administrative monetary penalties

Review and Appeal Process for Non-Compliance Findings

In addition to these measures, FINTRAC has established a process for reviewing and appealing non-compliance findings.

Learning Resources and Support

The agency also provides learning resources, including:

  • Videos
  • Orientation documents

to help financial institutions understand their role in preventing money laundering and terrorist financing.

Key Legislation: The Proceeds of Crime (Money Laundering) and Terrorist Financing Act

The Proceeds of Crime (Money Laundering) and Terrorist Financing Act is a key piece of legislation aimed at combating financial crime in Canada. First introduced in 2000, the act has undergone several updates since then, with the latest revisions taking effect on October 12, 2023.

Getting Started with Compliance

For more information on compliance requirements and guidance documents, visit the FINTRAC website or contact the agency directly.