On February 7, the Department of Finance published the Discussion Paper Reviewing Canada’s Anti- Money Laundering and Anti-Terrorist Financing Regime. The paper is intended to support Parliament’s upcoming study of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). The PCMLTFA requires such a review every five years and the last review was completed in 2013.
The paper notes that the money laundering and terrorist financing environment has evolved substantially in the past five years. For example, on the technology front:
- Developments in virtual currencies offer new ways to move value with anonymity;
- New financial technologies (Fintech) are changing how Canadians interact with the financial system;
- Digital identity recognition can facilitate the customer due diligence process; and
- Reporting entities can use technology (Regtech) to better understand and mitigate their risks and/or meet their obligations under the framework.
The paper also identifies potential regulatory gaps in the Canadian AML/ATF regime and indicates that the government is considering policy measures that improve the PCMLTFA and related regulations while striving to minimize the compliance burden and cost of measures required to detect and deter money-laundering and terrorist financing activities.