FINTRAC: New measures as of June 1, 2021
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is Canada's financial intelligence unit. Its mandate is to facilitate the detection, prevention and deterrence of money laundering and the financing of terrorist activities. The measures apply to brokers and agencies and FINTRAC is responsible for their application. As of June 1, 2021, new measures will come into force and the OACIQ deems it necessary to pass on the information to ensure that brokers and agencies are aware of them and comply with them. Here's what it's all about.
1. Business relationship requirements
A business relationship starts when you are required to verify your client’s identity for the first time. Entering into a business relationship triggers several obligations, including those pertaining to risk identification and management.
2. Beneficial ownership requirements
If your client is not a natural person, in order to verify its identity, you will need to obtain beneficial ownership information, i.e. the natural persons who control the legal person or entity. This includes directors, as well as persons who own or control, directly or indirectly, at least 25% of the entity or company.
3. Politically Exposed Persons (PEP) and Heads of International Organizations (HIO)
As soon as a business relationship is established, you are required to determine whether your client is a politically exposed foreign or domestic person, a head of an international organization, a family member or a person who is closely associated with one of those persons. National political figures include those who hold or have held one of these positions in the past 5 years. If your client is a PEP or HIO, you must take reasonable measures to establish the source of that person's wealth.
4. Virtual currency
As of June 1, 2021, if you receive an amount of $10,000 or more in virtual currency (bitcoin or other) in one or more transactions within 24 hours, you will have to report a large virtual currency transaction to FINTRAC within five days. You will also need to keep a large virtual currency transaction record.
5. New record keeping requirements
You must keep a copy of all reports you send to FINTRAC. Whether they are large cash or virtual currency transaction reports, suspicious transaction reports or others.
6. New forms
Finally, changes will be made to the declaration forms. The new versions of these forms have not yet been released. In the meantime, FINTRAC is committed to being flexible and allowing the old forms to continue to be used.
For any questions about these changes, please check the new guidelines on FINTRAC's website or contact FINTRAC directly by email or by phone at 1-866-346-8722 (toll-free).
