As we discussed in November 2012, the Department of Finance initiated a consultation process in 2011 intended to address deficiencies in the customer due diligence provisions under the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFR). A final version of the amendments, which included clarifications made to the initial proposal, was published in early 2013 and came into force on February 1, 2014. The amendments to the PCMLTFR generally extend certain AML/ATF obligations to “business relationships”, add provisions in regards to ongoing monitoring, enhance the requirements in regards to collecting beneficial ownership information in regards to entities other than corporations, and require that “enhanced measures” be taken in certain high risk situations based on a risk assessment.
FINTRAC’s Guideline 4 Implementation of a Compliance Regime and Guideline 6 Record Keeping and Client Identification have also been updated effective February 1 to reflect the legislative amendments. Among other things, changes to the guidelines include guidance in respect of the documents that can be provided by clients to confirm beneficial ownership information, examples of enhanced measures that can be taken to mitigate the risk in cases of high-risk business relationships, guidance in respect of maintaining up-to-date client identification information and in determining whether a “business relationship” exists.