Canada Gazette, Part I, Volume 154, Number 7: Regulations Amending the Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2019

February 15, 2020

Statutory authority

Proceeds of Crime (Money Laundering) and Terrorist Financing Act

Sponsoring department

Department of Finance

REGULATORY IMPACT ANALYSIS STATEMENT

(This statement is not part of the Regulations.)

Executive summary

Issues

Canada’s AML/ATF Regime, which was first established in 2000–2001, must regularly adapt and evolve to changes in its operating environment and changes to international standards. Actions to counter money laundering and terrorist financing have long been recognized as powerful means to combat crime and protect the safety and security of Canadians. Regulatory changes are needed to continue to address gaps in Canada’s Regime, address recommendations made through the parliamentary review and reports commissioned by the Government of British Columbia and align the Canadian Regime with international standards.

Background

Canada’s AML/ATF Regime

The core elements of Canada’s AML/ATF Regime are set out in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Act). The Act applies to designated financial and non-financial entities (known as “reporting entities”), ^{footnote 2} which provide access to the financial system and may therefore be susceptible to abuse by criminals seeking to integrate the proceeds of their crimes into the legitimate economy.

The Act sets out obligations that broadly fall into the following four categories: record keeping, verification of identity of designated persons and entities (e.g. clients with whom the reporting entities conduct business), reporting of suspicious and other prescribed financial transactions (e.g. large cash transactions), and the establishment and implementation of an internal compliance program. The Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (the Regulations) set out how reporting entities are to fulfill these obligations.

Reports commissioned by the Government of British Columbia

In September 2017, the Attorney General of British Columbia, Minister David Eby, appointed Peter German to conduct an independent review of allegations of money laundering in B.C. casinos. German’s first report, Dirty Money, was released in July 2018 and found that large-scale, transnational money laundering has been occurring in B.C. casinos, highlighting the “Vancouver Model” for laundering money. German made 48 recommendations, many of which relate closely to those made by the FINA Committee for the 2018 federal parliamentary review, as described below. Minister Eby later mandated Peter German to produce a follow-up report on money laundering relating to real estate, luxury cars and horse racing to verify concerns raised in his original report about the scale and scope of organized crime and money laundering activities in those three sectors. The provincial Minister of Finance also tasked an expert panel to review the B.C. real estate sector and recommend what action can and should be taken to better tackle money laundering. The panel looked at how money was laundered through gaps in consumer protections, compliance and enforcement of existing laws, and standards in financial services regulations, among other areas. German’s second report, Dirty Money – Part 2, and the expert panel’s report were released in May 2019 and highlighted evidence of money laundering in the real estate sector. In its report, the expert panel acknowledged the difficulty in measuring money laundering, but estimated $7.4 billion in money laundering activity in British Columbia in 2018, of which $5.3 billion was laundered through B.C. real estate. The report provided 29 recommendations, many of which also related closely to those made by the FINA Committee. These proposed amendments to the Regulations herein are designed to address the recommendations by increasing the strength of the oversight approach to the casino and the real estate sectors.

2018 Parliamentary review

To ensure that the AML/ATF Regime remains robust and effective, the administration and operations of the Act are reviewed by a committee of Parliament every five years. The FINA Committee launched a statutory review of the Act in February 2018 and published its report in November 2018. The report makes 32 recommendations to strengthen the Regime by addressing legislative and regulatory gaps, enhancing the exchange of information and privacy rights of Canadians, strengthening intelligence capacity and enforcement, and modernizing the Regime overall.

The proposed amendments will specifically address Recommendation 8, which states that all reporting entities, including DNFBPs such as the real estate sector, that are now exempt from the obligation of identifying beneficial ownership (BO) be required to do the following:

• determine and verify the identity of the beneficial owners;
• determine if their customers are politically exposed persons, or if they are the family members or associates of politically exposed persons;
• prohibit opening accounts or completing financial transactions until the beneficial owner has been identified and their identity verified with adequate identification.

These proposed amendments will also strengthen Canada’s compliance with the FATF standards for DNFBPs, where Canada was rated non-compliant in 2016.

FATF and guidance on virtual assets

Canada is a founding member of the FATF, an intergovernmental body that sets standards and promotes effective implementation of legal, regulatory and operational measures for combating money laundering, terrorist activity financing and other related threats to the integrity of the international financial system. Although the standards set by the FATF are not legally binding, as a member, Canada is obligated to implement them and to submit to a peer evaluation of their effective implementation.

Not meeting this commitment could lead to a number of sanctions, from enhanced scrutiny measures to public listing, and, in the extreme, suspension of membership from the FATF. Furthermore, non-compliance could cause reputational harm to Canada’s financial sector and subject Canadian financial institutions to increased regulatory burdens when dealing with foreign counterparties or when doing business overseas.

In 2015, the FATF published a guide for the analysis of risks related to virtual currencies and stressed the responsibility of countries to implement effective regulation and supervision, with dissuasive sanctions, of activities related to virtual currencies. In 2018, the FATF amended its Recommendation to explicitly subject virtual asset service providers to AML/ATF obligations. On June 21, 2019, the FATF finalized and adopted its analysis and guidance in the context of virtual assets to help national authorities better understand and develop the regulation and supervision of these activities. Due to the timing of its release, the last set of regulatory amendments did not fully address the FATF standards, as the scope was purposely limited so as not to overstep international standards as the FATF was finalizing its analysis and guidance.

The modified FATF Recommendation requires countries to assess and mitigate the risks associated with virtual asset activities and service providers, license or register service providers and subject them to supervision or monitoring by competent national authorities, and implement sanctions and other enforcement measures when reporting entities fail to comply with their obligations. The threat of criminal and terrorist misuse of virtual assets is serious and urgent, and the FATF expects all countries to take prompt action to implement the FATF recommendations in the context of virtual asset activities and service providers. The FATF will monitor implementation of the new requirements by countries and service providers and conduct a review in June 2020.

In the Canadian context, the last set of amendments to the Regulations (SOR/2019-240) introduced new virtual currency reporting and record-keeping obligations, which align with the FATF Recommendation. The regulatory amendment clarified that domestic and foreign businesses that are “dealing in virtual currency (VC)” will be considered money services businesses (MSBs). These “dealing in” activities include virtual currency exchange services and value transfer services. As required of all MSBs, persons and entities dealing in VCs will need to fulfill all AML/ATF obligations, including implementing a full compliance program and registering with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). These obligations will come into force in June 2020. In addition, any reporting entity in any sector that receives $10,000 or more in VC (e.g. receiving deposits or any form of payment) will have record-keeping, identification and reporting obligations. These obligations will come into force in June 2021.

One of the outstanding issues that the proposed amendments seek to address is the “travel rule.” The FATF Recommendation requires member countries to apply the travel rule that currently exists for electronic funds transfers to VC transfers. The travel rule is a longstanding customer due diligence requirement for banks and other financial institutions to include certain client information when transferring funds between financial institutions on behalf of their customers. The proposed amendments would extend the travel rule requirements to VC transfers in alignment with the FATF Recommendation.

Objective

The proposed amendments would

• strengthen Canada’s ability to combat money laundering and terrorist activity financing;
• close important customer due diligence gaps in Canada’s AML/ATF Regime with respect to designated non-financial businesses and professions and level the playing field across reporting entities;
• implement measures to respond to recommendations from the parliamentary review and the Government of British Columbia commissioned reports;
• improve Canada’s compliance with international standards; and
• adopt minor technical changes for clarity and ease of understanding.

Description

The proposed regulatory amendments would address gaps that exist in Canada’s AML/ATF Regime, update the requirements for DNFBPs to perform customer due diligence, level the playing field across all reporting entities, respond to the recommendations from the parliamentary review and reports commissioned by the Government of British Columbia, and help further align the Canadian AML/ATF Regime with the FATF recommendations.

• Politically exposed persons (PEPs) and heads of international organizations (HIOs) are persons entrusted with a prominent position that typically comes with the opportunity to influence decisions and an increased access to or control of large sums of funds. The influence and control a PEP or HIO has puts them in a position to impact policy decisions, institutions and rules of procedure, as well as the allocation of resources and finances, which can make them vulnerable to corruption and money laundering. Currently, only four reporting entity sectors have obligations relating to PEPs and HIOs in Canada: financial entities, securities dealers, money service businesses, and life insurance companies. They are required to take reasonable measures in certain situations to determine if a client is a foreign PEP, a domestic PEP, an HIO, a prescribed family member or a close associate of one of these persons. However, other reporting entity sectors currently covered under the Act do not have such obligations.
  The proposed amendments would address money laundering vulnerabilities in highrisk sectors that have key gatekeeper roles in financial transactions, create a level playing field within the private sector for those who have obligations under the Act, create a level playing field with other jurisdictions, and help increase the transparency and enforceability of the Regulations. The proposed amendments would achieve this by requiring accountants and accounting firms, British Columbia notaries, casinos, departments and agents or mandataries of Her Majesty in right of Canada or of a province (e.g. Canada Post), dealers in precious metals and stones, and real estate brokers, sales representatives and developers to take reasonable measures during certain transactions or activities to determine if a client is a foreign PEP, a domestic PEP, an HIO, a prescribed family member or a close associate of one of these persons. Furthermore, foreign and domestic money services businesses would be required to take reasonable measures to make such a determination when in a business relationship with a person.
  For example, PEP or HIO determination will be required
  • at account opening or the second transaction or activity that triggers client identification (that is, either when an account is opened or when a business relationship is established);
  • on a periodic basis (to be determined by each reporting entity based on its own facts, situation and risk assessment);
  • when detecting a fact (that is, having actual information that “constitutes reasonable grounds to suspect” that a person is a PEP or HIO or close associate or family member of a PEP or HIO — this could occur based on information provided by the client, obtained as a result of media monitoring or knowledge of world events, or based on a search of a public or commercial database); and
  • when DNFBPs conduct a VC transfer or cash transaction of $100,000 or more.
• Beneficial ownership refers to the identity of the natural person who ultimately controls a corporation or entity, and cannot be another corporation or another entity. Beneficial owners are the actual individuals who are the trustees and known beneficiaries and settlors of a trust, or who directly or indirectly own or control 25% or more of a corporation or an entity other than a corporation or trust, such as a partnership. Identifying beneficial ownership is important in order to remove anonymity and identify the actual individuals behind the transactions and account activities, which is a key component of Canada’s AML/ATF Regime. The concealment of the beneficial ownership information of accounts, business dealings and transactions is a technique used in money laundering and terrorist activity financing schemes. The collection and confirmation of this information is an important step to aid in money laundering and terrorist activity financing investigations, and ultimately protect the integrity of Canada’s financial system.
  Similar to PEPs, only four reporting entity sectors have obligations to collect beneficial ownership information from corporations or other entities: financial entities, securities dealers, money services businesses, and life insurance companies. They are required to obtain information that describes the ownership, control and structure of the entity (such as the names and addresses of directors, trustees, and beneficial owners), take reasonable measures to confirm the accuracy of the information obtained, and keep records of this information and the measures taken to confirm its accuracy. However, other reporting entity sectors currently covered by the Act have no such obligations.
  The proposed amendments would require accountants and accounting firms, British Columbia notaries, casinos, departments and agents or mandataries of Her Majesty in right of Canada or of a province, dealers in precious metals and stones, and real estate brokers, sales representatives and developers to collect beneficial ownership information when required to verify the identity of an entity. New obligations include obtaining information that describes the ownership, control and structure of the entity, including corporations and trusts. They will also be required to take reasonable measures to confirm the accuracy of the information obtained, and keep records of the information and the measures taken to confirm its accuracy.
• Currently, real estate developers, brokers and sales representatives must fulfill specific obligations under the Act and its associated regulations to help combat money laundering and terrorist activity financing in Canada. These obligations include providing FINTRAC with certain transaction reports, implementing a compliance program and keeping records that may be required for law enforcement investigations. As part of customer due diligence measures, they establish a business relationship with a client once they conduct two or more transactions or activities for which they have to verify the identity of the individual or confirm the existence of the entity. Once a business relationship is established, real estate developers, brokers and sales representatives have recordkeeping, risk assessment and ongoing monitoring obligations. Record-keeping obligations include determining if the client is a foreign or domestic PEP and keeping a record of the information obtained during the PEP determination. Foreign PEPs, their family members and close associates are always high-risk clients. A risk assessment of domestic PEP and HIO, their family members and close associates is needed as part of a risk-based approach. The measures reporting entities put in place in respect of each client are based on the level of risk assigned. Ongoing monitoring means that the businesses have to monitor their clients on a periodic basis.
  However, a gap has been identified where criminal actors could conduct only a single transaction and avoid repeated transactions to circumvent the formation of a business relationship and the associated record keeping, risk assessment and ongoing monitoring obligations. From a risk perspective, the value of a single transaction in the real estate sector could be used to launder a large sum of money. The proposed amendments would require real estate developers, brokers and sales representatives to enter into a business relationship with a client after a single transaction or activity that triggers client identification. This change would apply a more stringent approach to the real estate sector given the heightened money laundering risks and vulnerabilities, protect the real estate market from unscrupulous operators, and strengthen confidence in the real estate market.
• Currently, casinos must fulfill specific obligations under the Act and associated Regulations to help combat money laundering and terrorist financing in Canada. They are responsible for providing FINTRAC with certain transaction reports, implementing a compliance program and keeping records that may be required for law enforcement investigations. Casinos must also verify the identity of individuals and confirm the existence of entities for certain activities and transactions such as account openings and signature card creations, extension of credit of $3,000 or more, foreign currency exchange of $3,000 or more, electronic funds transfer of $1,000 or more, casino disbursements, large cash transactions of $10,000 or more, and suspicious transactions.
  Under FATF standards, casinos are required to implement customer due diligence measures, including determining and verifying identification, when customers engage in financial transactions of $3,000 or more. To align with international standards, the proposed amendments would specify that casinos must verify the identity of individuals when they receive $3,000 or more in a single transaction. For example, under the proposed amendments, casinos would have to verify the identity of any individual who uses $3,000 or more in cash to buy chips to play at the casino. The proposed amendments would apply a more stringent approach to the casino sector given the heightened money laundering risks and vulnerabilities and improve the effectiveness of the AML/ATF Regime by enhancing the quality and scope of information that FINTRAC discloses to law enforcement, which should better assist them in their investigations.

The proposed amendments would help address new emerging risks, and align virtual currency (VC) record-keeping obligations with international standards.

• In June 2019, legislative and regulatory amendments to VC reporting and record-keeping obligations were introduced in a manner that was consistent with the existing legal framework and international standards, while not unduly hindering innovation. The scope of the last set of regulatory amendments was purposely limited so as to not overstep international standards as the FATF was finalizing its analysis and guidance.
  On June 21, 2019, the FATF finalized and adopted its guidance and interpretation of its amended standards. The FATF requires member countries to ensure that licensed or registered virtual asset service providers are regulated for AML/ATF purposes and subject to effective systems for monitoring and ensuring compliance with the FATF Recommendations, and required to apply the “travel rule” that currently exists for electronic funds transfers to VC transfers. Businesses dealing in VCs are required to implement a comprehensive AML/ATF compliance program, register with FINTRAC as an MSB, and meet regulatory obligations related to client identification, record keeping, and transaction reporting. Canada’s most recent amendments to the Regulations fully align with FATF’s guidance except for the travel rule.
  The travel rule is a long-standing customer due diligence requirement for banks and other financial institutions when sending each other money on customers’ behalf, which requires them to pass on certain pieces of identifying information to the next financial institution a transaction is sent to. Although originally proposed in the prepublication process of the last regulatory amendments, it was ultimately removed during final publication as stakeholders raised competitive disadvantage concerns and the fact that the FATF had not yet finalized its guidance. With the FATF guidance complete, this set of proposed amendments would now require businesses dealing in virtual currencies to obtain and hold originator and beneficiary information, as required by the FATF Recommendation. It would also help address the threat of criminal and terrorist misuse of VC, and ensure consistent application of the travel rule across all jurisdictions.

The proposed amendments would improve compliance, monitoring and enforcement efforts.

• There are currently requirements to provide information (through declaration forms) on currency and monetary instruments (e.g. cash, cheques) crossing the border when the total amount equals or exceeds $10,000. Through the Department of Finance Canada’s internal review of the Cross-border Currency and Monetary Instruments Reporting Regulations (associated with the transportation of currency into and out of Canada), it was found that improvements could be made to the declaration forms to clarify the movement of currency.
  The proposed amendments build upon the changes introduced in June 2019 by clarifying the new information that must be declared. The 2019 amendments introduced new fields to existing declaration forms that will have to be completed by individuals, couriers, and companies (e.g. armoured car companies) transporting $10,000 or more of currencies and monetary instruments across the border. These proposed amendments clarify the intent behind some of the fields. In practice, this means that the number of fields would be expanded upon; however, the same information would be expected from the declarant. For example, the proposed amendments clarify that the amount of foreign currency or monetary instruments must be declared in both Canadian dollars and the original foreign currency, that dates of travel (such as departure, transit points and arrival) must be provided and that the full names and addresses of relevant parties involved in the cross-border movement of the funds be given (this includes the ultimate origin and destination of the funds, the courier company, and any intermediaries used to transport the shipment).
  The proposed amendments address concerns that the terms used to describe the type of information being sought was described in broad terms. For example, under the proposed amendments, “ultimate origin” will be changed to “Name and permanent address of the person or entity that is the ultimate origin of currency or monetary instrument and, in the case of an entity, the nature of their principal busines.” As a result, the proposed amendments would make the type of information being sought more explicit, although the cumulative impact on the type and scope of the information provided through these forms would not change.

Finally, the following technical amendments would also be adopted:

• repealing and replacing obsolete references in the regulatory text;
• improving the organization of the text, making it easier for regulatees to find and understand the requirements that apply to them;
• updating the Schedules to the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations to reflect new and updated obligations;
• adding “services” to the list of considerations reporting entities must make when conducting risk assessments to accurately capture sectoral activities; and
• reintroducing the terms “remit” and “transmit” to describe an MSB’s electronic funds transfer activities, to align with the Act.

Regulatory development

Consultation

In February 2018, the Department released a discussion paper intended to support Parliament’s 2018 review of the Act and its consideration of issues relating to money laundering and terrorist activity financing in Canada. The Department sought input from stakeholders in response to the paper to support the development of forward policy and technical measures that would lead to legislative changes or inform the Department’s longer-term approaches to Canada’s AML/ATF Regime. For example, one section entitled “Expanding the Scope of the PCMLTFA to High Risk Areas” identified expanding requirements for DNFBPs in relation to PEPs, HIOs, and beneficial ownership as a practical next step to close regulatory gaps.

More than 60 submissions were received from a wide range of reporting sectors and industry associations representing financial entities (banks, credit unions and trust companies), life insurance companies, securities dealers, MSBs, accountants, lawyers, casinos, real estate agents, and dealers in precious metals and stones. A large majority of the submissions indicated support for the proposed measures, while some submissions included recommendations for additional changes. The Department had follow-up meetings with private sector representatives to discuss their submissions and their comments were taken into consideration when drafting these proposed amendments.

The proposed amendments were also broadly discussed at the Advisory Committee on Money Laundering and Terrorist Financing. ^{footnote 3} Stakeholders were further consulted on this proposal at in-person meetings from November 2019 to January 2020.

While some reporting entities expressed concerns about the implementation costs associated with the some of proposed amendments (e.g. those associated with updating their procedures, policies and systems and training their staff), they were overall supportive of the intent and need for these changes.

Modern treaty obligations and Indigenous engagement and consultation

No impacts have been identified in respect of the Government’s obligations in relation to Indigenous rights protected by section 35 of the Constitution Act, 1982, or its modern treaty obligations.

Instrument choice

Canada’s AML/ATF Regime is entrenched in legislation and regulations. To close gaps and align with FATF standards, amending the Regulations is the most effective way to simultaneously keep pace with international standards and technological advances, strengthen the AML/ATF regime and harmonize requirements while limiting burdens to industry.

Without these regulatory changes, Canada’s AML/ATF Regime would become increasingly outdated over time, enabling criminals to harness more economic and social power and increasing the likelihood of criminal activity. This would compromise the integrity of Canada’s financial system and the security and safety of Canadians at home and abroad. Furthermore, if Canada’s regulatory regime is not aligned with FATF standards, this would have significant adverse consequences for Canada.

The FATF continues to monitor Canada’s progress to address priority actions identified in its 2016 evaluation. Not aligning with FATF standards could lead to a number of sanctions, from enhanced scrutiny measures to public listing and, in the extreme, suspension of membership from the FATF. Furthermore, non-compliance could cause serious reputational harm to Canada’s financial sector and subject Canadian financial institutions to increased regulatory burden when dealing with foreign counterparts or when doing business overseas. Therefore, forgoing regulatory modernization would ultimately be more costly to Canadian businesses in the absence of necessary regulatory change.

During the policy development of these proposed measures, a wide range of regulatory options were considered. Some were determined to go beyond international standards, and others were determined to be too burdensome to industry. Accordingly, a risk-based and incremental approach was taken to ensure the proposed measures still capture the policy intent within an appropriate scope.

Regulatory analysis

Benefits and costs

Costs

As a result of these proposed amendments, reporting entities are expected to carry an estimated $17,163,957 (PV) in compliance costs and $905,140 (PV) in administrative costs for an estimated $18,069,097 (PV) in total costs over a 10-year period (or $2,572,632 annually). Approximately 18 006 reporting entities will be affected, all of them businesses.

These costs primarily stem from the provision of additional information to FINTRAC if asked in a compliance examination, associated updates that would be required to reporting entities’ internal policies and procedures, and internal information management and information technology (IM/IT) system changes that would be required to support the implementation of these proposed amendments.

Benefits

The proposed amendments would strengthen Canada’s AML/ATF Regime and improve its effectiveness by improving customer due diligence standards; closing regulatory gaps; enhancing compliance, monitoring and enforcement efforts; and aligning the Canadian Regime with international standards.

Money laundering and terrorist activity financing have criminal and economic effects and contribute to facilitating and perpetuating criminal activity. Money laundering and terrorist activity financing harm the integrity and stability of the financial sector and the broader economy, and threaten the quality of life of Canadians. Money laundering damages the financial institutions that are critical to economic growth (through internal corruption and reputational damage), causes economic distortions by impairing the legitimate private sector, reduces productivity by diverting resources and encouraging crime and corruption; distorts the economy’s international trade and capital flows (through reputational damage and market distortions) to the detriment of long-term economic development, and reduces tax revenue as it becomes more difficult for municipal, provincial and federal governments to collect revenue from related transactions which frequently take place in the underground economy. At the same time, there are substantial qualitative benefits associated with the proposed amendments that cannot be monetized due to the lack of available or reliable data to accurately measure the reputational, economic and national security benefits that would result from the implementation of the regulatory changes.

A strengthened AML/ATF Regime helps to combat money laundering and terrorist activity financing threats while protecting Canadians, the integrity of markets and the global financial system, and increases the investment attractiveness and competitiveness of Canada. The proposed amendments would support the stability, utility and efficiency of the financial sector framework by strengthening the Regime and combating financial crime. All Canadians would benefit from a stable, efficient, and competitive financial sector that services and drives economic growth.

Strong AML/ATF policies help deter and detect money laundering and terrorist activity financing offences. The proposed amendments would enhance the quality and scope of FINTRAC disclosures of financial intelligence to law enforcement and disclosure recipients, which would better assist them in their investigations. The additional information on PEPs, HIOs and beneficial ownership will better equip FINTRAC to enhance financial intelligence disclosures that law enforcement would use to detect and prosecute more money laundering cases.

Furthermore, the proposed amendments would positively respond to the recommendations made by the FINA Committee, the Peter German reports and the report by the Expert Panel on Money Laundering in B.C. real estate, and address the money laundering vulnerabilities described in each report. The proposed amendments would address money laundering vulnerabilities in high-risk sectors that have key gatekeeper roles in financial transactions, such as the real estate sector.

The proposed amendments would also improve Canada’s compliance with FATF international standards, which will be considered during the next on-site FATF evaluation. Meeting these standards would improve the integrity of the global AML/ATF framework, positively impact Canada’s international reputation, and may lead to regulatory efficiencies with other countries’ AML/ATF regimes, making it easier for Canadian businesses to operate internationally. Furthermore, meeting these standards would help ensure Canada is not flagged as a jurisdiction of concern by the FATF for lack of action to address key AML/ATF deficiencies and ultimately prevent other countries from levying sanctions on Canada. Such reputational, economic and national security impacts cannot be quantified.

Cost-benefit statement

Consolidated cost-benefit statement

The cost-benefit analysis uses the following key assumptions for the monetization of impacts:

• Base year: 2020
• Price year: 2018
• Period of analysis: 10 years
• Discount rate: 7%

Cost-benefit statement

Quantified impacts (in dollars)

Quantified impacts	Stakeholder Group	Year 1	Year 5	Year 10	Annualized Value	Total PV
Expanding requirements for DNFBPs in relation to PEPs, HIOs, and BO — Compliance costs (IM/IT systems updates)	Industry	$12,429,744	$0	$0	$1,769,716	$12,429,744
Expanding requirements for DNFBPs in relation to PEPs, HIOs, and BO — Compliance costs (policies and procedures updates)	Industry	$4,734,213	$0	$0	$674,045	$4,734,213
Expanding requirements for DNFBPs in relation to PEPs, HIOs, and BO — Administrative costs	Industry	$98,973	$75,505	$53,834	$105,900	$743,800
Modifying the definition of business relationship for the real estate sector — Administrative costs	Industry	$211,047	$16,100	$11,479	$22,582	$158,605
Aligning customer due diligence measures for casinos with international standards — Administrative costs	Industry	$364	$278	$198	$389	$2,735
Aligning virtual currency record-keeping obligations with international standards	Industry	$0	$0	$0	$0	$0
Making minor amendments to the Cross-border Currency and Monetary Instruments Reporting Regulations	Industry Travellers	$0	$0	$0	$0	$0
Total		$17,474,341	$91,883	$65,511	$2,572,632	$18,069,097

Qualitative impact

Positive impacts

A strong and effective AML/ATF Regime acts as a deterrent to crime and therefore improves the safety of Canadians and the integrity of Canada’s financial system. In turn, this increases confidence in Canada’s financial system, making it an attractive place to invest and do business. Investors seek investment opportunities in locations that have a relatively low crime environment and that are politically and economically stable, among other factors. The willingness of businesses and individuals to invest in Canada could be negatively affected if Canada were viewed as weak on combating money laundering and terrorist activity financing or if Canada were to have a reputation for being a safe haven for raising terrorist funds. A strong reputation with regard to an effective AML/ATF Regime helps Canadian financial institutions avoid burdensome regulatory hurdles and additional costs when dealing with their foreign counterparts or doing business overseas.

Small business lens

It is estimated that approximately 18 006 businesses would be impacted by this proposal, over 99.7% of them small businesses. The total incremental administrative and compliance costs imposed on small businesses are estimated at $17,833,169 ([PV], $2,539,042 annualized average), which is equivalent to $994 (PV) per small business impacted.

Small Business Lens Summary

• Number of small businesses impacted17 948
• Number of years10
• Base year for costing2018

Compliance costs	Annualized Value ($)	Present Value
Expanding requirements for DNFBPs in relation to PEPs, HIOs, and BO — Compliance costs (IM/IT systems updates)	$1,754,596	$12,323,545
Expanding requirements for DNFBPs in relation to PEPs, HIOs, and BO — Compliance costs (policies and procedures updates)	$669,717	$4,703,812
Total	$2,424,313	$17,027,357

Administrative costs	Annualized Value ($)	Present Value
Expanding requirements for DNFBPs in relation to PEPs, HIOs, and BO — Administrative costs (additional documents for FINTRAC exam)	$92,145	$647,191
Modifying the definition of business relationship for the real estate sector — Administrative costs (additional documents for FINTRAC exam)	$22,238	$156,190
Aligning customer due diligence measures for casinos with international standards — Administrative costs (additional documents for FINTRAC exam)	$346	$2,430
Total	$114,729	$805,811
Total cost (all impacted small businesses)	$2,539,042	$17,833,169
Cost per impacted small business	$141	$994

These costs stem from the provision of additional documents to FINTRAC if asked in a compliance examination, the associated updates that would be required to report entities’ internal policies and procedures, and internal information management and information technology (IM/IT) system changes that would be required to support the implementation of these proposed amendments.

The Department is not able to provide a flexibility analysis for small businesses because the proposed amendments are being made to comply with FATF standards which, while not legally binding, Canada is obligated to follow. Furthermore, the Regulations and Canada’s obligations to meet the FATF’s international standards are non-discretionary in nature, with clear implementation guidelines. The Department recognizes that businesses, irrespective of size, will require time to implement these changes and will therefore provide 12 months of transition time (i.e. delay in coming into force) for businesses to comply with the new requirements. While this does not constitute a special consideration for small businesses alone, it should be noted that impacts on businesses have been considered when establishing compliance requirements.

One-for-one rule

Canada’s obligations to meet the FATF’s international standards are non-discretionary in nature (due to the potential for punitive consequences in the event Canada fails to meet them). Other jurisdictions’ perception of Canada has tangible impacts on Canadian businesses. If Canada is not aligned with the FATF standards or is perceived by its international peers as making insufficient progress on its AML/ATF Regime generally, there could be negative reputational consequences for Canada’s financial sector that could ultimately lead to increased costs for Canadian financial institutions. By its nature, including the need to be aligned with FATF standards and effectively detecting and deterring crimes, Canada’s legislative and regulatory framework for combating money laundering and terrorist activity financing imposes an unavoidable burden on reporting entities.

The total net annualized administrative cost increase for affected businesses is estimated at $68,426. The annualized administrative cost increase per affected business is estimated to be $147. These costs were estimated by using the Treasury Board Secretariat’s Regulatory Cost Calculator and the relevant monetization parameters for the one-for-one rule reporting.

The proposed Regulations Amending the Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2019 amend the following five existing regulations through the one amending regulation:

• the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations;
• the Cross-border Currency and Monetary Instruments Reporting Regulations;
• the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations;
• the Proceeds of Crime (Money Laundering) and Terrorist Financing Registration Regulations; and
• the Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations.

The administrative burden associated with this proposal stems from the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations. While the amendments to the Cross-border Currency and Monetary Instruments Reporting Regulations (CBCRs) are discretionary in nature, they do not increase or decrease the administrative burden for businesses.

As Canada is required to make the majority of these amendments to comply with FATF standards, and all the requirements considered to be the administrative burden (i.e. all except those being made to the CBCRs), the proposed amendments that impose an administrative burden are considered non-discretionary in nature and are therefore exempt from the requirement to offset under the one-for-one rule. This means that an equal amount of the administrative burden would not have to be offset two years after these amendments are made.

Regulatory cooperation and alignment

Canada’s AML/ATF Regime is largely consistent with international standards set by the FATF with the exception of some notable gaps, which the current proposed amendments would address. The proposed amendments align with the FATF standards and mirror the language in certain FATF standards, guidance, and recommendations. Although the standards set by the FATF are not legally binding, as a member, Canada is obligated to implement them and to submit to a peer evaluation of their effective implementation. Canada’s last mutual evaluation took place in 2015–16, and the subsequent report outlined a number of deficiencies, which the last set of amendments to the Regulations in 2019 were intended to address. In an effort to continue with this progress, and in light of emerging risks in the operating environment, the proposed amendments serve to continue to support Canada’s alignment with FATF standards.

Strategic environmental assessment

In accordance with the Cabinet Directive on the Environmental Assessment of Policy, Plan and Program Proposals, a preliminary scan concluded that the proposed amendments would not result in positive or negative environmental impacts. Therefore, a strategic environmental assessment is not required.

Gender-based analysis plus

A gender-based analysis plus (GBA+) assessment was undertaken for this proposal. The results indicate that by strengthening and modernizing Canada’s AML/ATF Regime, the proposed amendments would reduce potential threats to the country’s economic development and its financial security, increase investment attractiveness and competitiveness, and benefit the overall economy by contributing to the stability of the Canadian financial system, benefiting both men and women. Any crime that generates profit can be a precursor to money laundering, including drug offences, fraud, and human trafficking. As such, these measures target a broad array of crimes, for which the gender, age and socio-economic status of the victims vary greatly. As a result, these measures have the potential to advance gender-specific objectives, e.g. by targeting prostitution rings, yet are expected to be gender neutral on balance.

Privacy impacts

FINTRAC requires a certain volume, and specific types, of financial transaction information in order to be able to produce actionable financial intelligence for law enforcement partners. The Regime aims to strike the right balance between the privacy rights of Canadians and the policy objectives of Canada’s AML/ATF Regime. Clear principles for the protection of privacy are set out in FINTRAC’s governing legislation, which respects the Canadian Charter of Rights and Freedoms and the Privacy Act, and are reinforced by FINTRAC’s own operational policies and security measures. Under the Act, FINTRAC can only make a disclosure of designated information to appropriate police forces and prescribed law enforcement and security agencies. Furthermore, the legislation clearly states what information may be disclosed and sets out specific thresholds that must be met before FINTRAC is able to disclose it. Furthermore, pursuant to subsection 72(2) of the Act, the Privacy Commissioner is required to conduct a biennial review of the measures taken by FINTRAC to protect information it receives or collects, and to report the results of these audits to Parliament.

Implementation, compliance and enforcement, and service standards

Under the Act, FINTRAC is designated as Canada’s financial intelligence unit and the regulator responsible for administering and enforcing the Act and regulations.

FINTRAC’s responsibilities include the overall supervision of reporting entities to determine compliance with the Act and regulations. Under the Act, reporting entities are required to comply with FINTRAC’s information demands and to give all reasonable assistance when FINTRAC carries out its compliance responsibilities.

Once the proposed amendments are approved, FINTRAC would update its guidance to set out its expectations for how obligations are to be met as well as undertake possible outreach activities to ensure reporting entities are aware of the new obligations. FINTRAC would be responsible for enforcing the obligations and would include them into their compliance examinations and processes. Should non-compliance be identified, FINTRAC could impose administrative monetary penalties or take other enforcement actions.

There have been other recent amendments to these Regulations, which had a phased implementation strategy and staggered coming into force dates. The prohibition on the use of scanned or photocopied documents was repealed and took effect upon registration in June 2019. The 2014 legislative amendments for virtual currency dealers will come into force on June 1, 2020, which will require virtual currency dealers to register as money services businesses and comply with other legislative obligations, such as suspicious transaction reporting and implementing a compliance program. The remaining virtual currency dealers’ obligations stemming from these proposed amendments will come into force on June 1, 2021. The amendments to the Cross-border Currency and Monetary Instruments Reporting Regulations will come into force on June 1, 2020.

In light of this, the transition period and coming into force dates of the proposed regulatory amendments will align with the previous regulatory amendments. The proposed amendments to the previous amendments to the Cross-border Currency and Monetary Instruments Reporting Regulations will come into force on June 1, 2020. All other proposed amendments amending the previous amendments will come into force on June 1, 2021, giving stakeholders 12 months to comply with the new requirements and apply the required changes to their systems. This transition period is intended to limit impacts on industry and avoid any unnecessary costs where possible. The phased-in approach of these changes will also help facilitate industry readiness for the coming into force of the regulatory amendments and reduce costs to implement the proposed changes.

Contact

Lynn Hemmings
Director General
Financial Crimes and Security Division
Financial Sector Policy Branch
Department of Finance
90 Elgin Street
Ottawa, Ontario
K1A 0G5
Email: fin.fc-cf.fin@canada.ca

PROPOSED REGULATORY TEXT

Notice is given that the Governor in Council, pursuant to subsection 73(1) ^{footnote a} and paragraphs 73.1(1)(a) to (c) ^{footnote b} of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act ^{footnote c}, proposes to make, on the recommendation of the Minister of Finance, the annexed Regulations Amending the Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2019.

Interested persons may make representations concerning the proposed Regulations within 30 days after the date of publication of this notice. All such representations must cite the Canada Gazette, Part I, and the date of publication of this notice, and be addressed to Lynn Hemmings, Director General, Financial Crimes and Security Division, Financial Sector Policy Branch, Department of Finance, 90 Elgin Street Ottawa, Ontario K1A 0G5 (email: fin.fc-cf.fin@canada.ca).

Ottawa, January 30, 2020

Julie Adair
Assistant Clerk of the Privy Council

Regulations Amending the Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2019

Amendments

1 Subsection 1(1) of the Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2019 ^{footnote 4} is replaced by the following:

1 (1) The definitions accountant, accounting firm, British Columbia notary corporation, British Columbia notary public, CICA Handbook, credit union central, dealer in precious metals and stones, electronic funds transfer, financial entity, financial services cooperative, jewellery, life insurance broker or agent, precious metal, precious stones, real estate broker or sales representative, real estate developer, SWIFT and trust company in subsection 1(2) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations ^{footnote 5} are repealed.

2 (1) Subsection 22(2) of the Regulations is replaced by the following:

(2) The definitions business relationship, CICA Handbook, client information record, ongoing monitoring, physical presence and transaction ticket in subsection 1(2) of the Regulations are repealed.

(2) The portion of subsection 22(3) of the Regulations before the definition accountant that it enacts is replaced by the following:

(3) The definitions accountant, British Columbia notary corporation, dealer in precious metals and stones, deposit slip, electronic funds transfer, financial entity, financial services cooperative, funds, large cash transaction record, life insurance broker or agent, real estate broker or sales representative, receipt of funds record and trust company in subsection 1(2) of the Regulations are replaced by the following:

(3) Subsection 22(3) of the Regulations is amended by adding, after the definition financial entity that it enacts, the following:

• financial services cooperative means a financial services cooperative that is regulated by An Act respecting financial services cooperatives, CQLR, c. C-67.3, other than a caisse populaire. (coopérative de services financiers)

(4) Subsections 22(7) to (10) of the Regulations are repealed.

(5) Subsection 22(15) of the Regulations is repealed.

(6) Subsection 22(18) of the Regulations is repealed.

3 Section 23 of the Regulations is amended by adding, after the section 4 that it enacts, the following:

4.1 For the purposes of these Regulations, a person or entity to which section 5 of the Act applies enters into a business relationship with a client at the earliest of the following events:

• (a) the time when the person or entity opens an account for the client, except in the circumstances set out in any of paragraphs 154(1)(a) to (d) and (2)(g) to (l) and (p) and subsection 154(3),
• (b) the second time that the person or entity is required to verify the identity of the client under these Regulations,
• (c) if the person or entity is a real estate broker or sales representative or a real estate developer, the first time that the person or entity is required to verify the identity of the client under these Regulations,
• (d) if the person or entity is a money services business and the client is an entity, the time when the person or entity enters into a service agreement with the client to provide a service referred to in any of subparagraphs 5(h)(i) to (v) of the Act, and
• (e) if the person or entity is a foreign money services business and the client is an entity in Canada, the time when the person or entity enters into a service agreement with the client to provide a service referred to in any of subparagraphs 5(h.1)(i) to (v) of the Act.

4 Section 25 of the Regulations is amended by replacing the subparagraph 12(s)(xi) that it enacts with the following:

• (xi) the name and address of the person or entity that requested the transfer unless that information was not, despite the taking of reasonable measures, included with the transfer and is not otherwise known;

5 (1) Subsections 27(1) to (3) of the Regulations are replaced by the following:

27 (1) The portion of subsection 11.1(1) of the Regulations before paragraph (a) is replaced by the following:

11.1 (1) Every person or entity that is required to verify an entity’s identity in accordance with these Regulations shall, at the time the entity’s identity is verified, obtain the following information:

(2) Subsection 27(7) of the Regulations is amended by replacing the subsections 11.1(1.1) and (2) that it enacts with the following:

(2) Every person and entity that is subject to subsection (1) shall take reasonable measures to confirm the accuracy of the information when it is first obtained under that subsection and in the course of ongoing monitoring of business relationships.

(3) Subsection 27(7) of the Regulations is amended by replacing the portion of the subsection 11.1(4) that it enacts before paragraph (a) with the following:

(4) If the person or entity is not able to obtain the information, to keep it up to date in the course of ongoing monitoring of business relationships or to confirm its accuracy, the person or entity shall take

6 (1) Section 28 of the Regulations is amended by replacing the subparagraph 14(1)(k)(xi) that it enacts with the following:

• (xi) the name and address of the person or entity that requested the transfer unless that information was not, despite the taking of reasonable measures, included with the transfer and is not otherwise known; and

(2) Section 28 of the Regulations is amended by adding, after the paragraph 36(c) that it enacts, the following:

• (c.1) if they transmit an amount of $1,000 or more in funds at the request of a person or entity, other than in the case of an electronic funds transfer, a record of
  • (i) the date of the transmission,
  • (ii) the type and amount of each type of funds that is involved in the transmission,
  • (iii) the person’s or entity’s name, address and telephone number, the nature of their principal business or their occupation and, in the case of a person, their date of birth,
  • (iv) the exchange rates used and their source,
  • (v) the name and address of each beneficiary,
  • (vi) the number of every account that is affected by the transaction, and
  • (vii) every reference number that is connected to the transaction and has a function equivalent to that of an account number;
• (c.2) if they remit an amount of $1,000 or more in funds to a beneficiary at the request of a person or entity, other than in the case of an electronic funds transfer, a record of
  • (i) the date of the remittance,
  • (ii) the type and amount of each type of funds that is involved in the remittance,
  • (iii) the name of the person or entity who requested the remittance,
  • (iv) the name, address and telephone number of each beneficiary, the nature of their principal business or their occupation and, in the case of a person, their date of birth,
  • (v) the exchange rates used for the remittance and their source,
  • (vi) the number of every account that is affected by the transaction, and
  • (vii) every reference number that is connected to the transaction and has a function equivalent to that of an account number;

(3) Section 28 of the Regulations is amended by replacing the subparagraph 36(g)(iv) that it enacts with the following:

• (iv) the name and address of each beneficiary,

(4) Section 28 of the Regulations is amended by replacing the subparagraph 36(h)(xi) that it enacts with the following:

• (xi) the name and address of the person or entity that requested the transfer unless that information was not, despite the taking of reasonable measures, included with the transfer and is not otherwise known;

7 Section 36 of the Regulations is amended by adding “and” at the end of the paragraph 74(2)(e) that it enacts and by adding the following after that paragraph:

• (f) if the casino receives an amount of $3,000 or more from a person or entity in a single transaction, a receipt of funds record in respect of that amount, unless that amount is received from a financial entity or public body or from a person who is acting on behalf of a client that is a financial entity or public body.

8 (1) Section 40 of the Regulations is amended by adding, after the paragraph 95(1)(a) that it enacts, the following:

• (a.1) requests that they transmit an amount of $1,000 or more in funds, other than in the case of an electronic funds transfer;

(2) Section 40 of the Regulations is amended by striking out “or” at the end of the paragraph 95(1)(e) that it enacts and by adding the following after that paragraph:

• (e.1) is a beneficiary of an amount of $1,000 or more in funds, to whom they make the remittance, other than in the case of an electronic funds transfer; or

9 (1) Section 44 of the Regulations is amended by replacing the subparagraph 103(a)(iv) that it enacts with the following:

• (iv) who conducts a transaction in respect of which the casino is required to keep a record under paragraph 74(2)(a) or (f),

(2) Section 44 of the English version of the Regulations is amended by replacing the portion of the subsection 116(2) that it enacts before paragraph (a) with the following:

(2) A financial entity shall periodically take reasonable measures to determine whether either of the following persons is a politically exposed foreign person, a politically exposed domestic person, a head of an international organization, a family member — referred to in subsection 2(1) — of one of those persons or a person who is closely associated with a politically exposed foreign person:

(3) Section 44 of the English version of the Regulations is amended by replacing the subsection 119(2) that it enacts with the following:

(2) A securities dealer shall periodically take reasonable measures to determine whether an account holder is a politically exposed foreign person, a politically exposed domestic person, a head of an international organization, a family member — referred to in subsection 2(1) — of one of those persons or a person who is closely associated with a politically exposed foreign person.

(4) Section 44 of the Regulations is amended by adding, after the subsection 120(2) that it enacts, the following:

(3) A money services business or a foreign money services business shall take reasonable measures to determine whether a person with whom they enter into a business relationship is a politically exposed foreign person, a politically exposed domestic person, a head of an international organization, a family member — referred to in subsection 2(1) — of one of those persons or a person who is closely associated with a politically exposed foreign person.

(4) A money services business or a foreign money services business shall periodically take reasonable measures to determine whether a person with whom they have a business relationship is a politically exposed foreign person, a politically exposed domestic person, a head of an international organization, a family member — referred to in subsection 2(1) — of one of those persons or a person who is closely associated with a politically exposed foreign person.

(5) If a money services business or a foreign money services business — or any of their employees or officers — detects a fact that constitutes reasonable grounds to suspect that a person with whom they have a business relationship is a politically exposed foreign person, a politically exposed domestic person or a head of an international organization, or a family member — referred to in subsection 2(1) — of, or a person who is closely associated with, one of those persons, the money services business or foreign money services business shall take reasonable measures to determine whether they are such a person.

(5) Section 44 of the Regulations is amended by adding, after the section 120 that it enacts, the following:

Other Businesses and Professions

120.1 (1) A British Columbia notary public, British Columbia notary corporation, accountant, accounting firm, real estate broker or sales representative, real estate developer, dealer in precious metals and precious stones or department or agent of Her Majesty in right of Canada or agent or mandatary of Her Majesty in right of a province shall take reasonable measures to determine whether a person with whom they enter into a business relationship is a politically exposed foreign person, a politically exposed domestic person, a head of an international organization, a family member — referred to in subsection 2(1) — of one of those persons or a person who is closely associated with a politically exposed foreign person.

(2) A British Columbia notary public, British Columbia notary corporation, accountant, accounting firm, real estate broker or sales representative, real estate developer, dealer in precious metals and precious stones or department or agent of Her Majesty in right of Canada or agent or mandatary of Her Majesty in right of a province shall periodically take reasonable measures to determine whether a person with whom they have a business relationship is a politically exposed foreign person, a politically exposed domestic person, a head of an international organization, a family member — referred to in subsection 2(1) — of one of those persons or a person who is closely associated with a politically exposed foreign person.

(3) A British Columbia notary public, British Columbia notary corporation, accountant, accounting firm, real estate broker or sales representative, real estate developer, dealer in precious metals and precious stones or department or agent of Her Majesty in right of Canada or agent or mandatary of Her Majesty in right of a province shall take reasonable measures to determine whether a person from whom they receive an amount of $100,000 or more, in cash or in virtual currency, is a politically exposed domestic person or a head of an international organization, or a family member — referred to in subsection 2(1) — of, or a person who is closely associated with, one of those persons.

(4) If a British Columbia notary public, British Columbia notary corporation, accountant, accounting firm, real estate broker or sales representative, real estate developer, dealer in precious metals and precious stones or department or agent of Her Majesty in right of Canada or agent or mandatary of Her Majesty in right of a province — or any of their employees or officers — detects a fact that constitutes reasonable grounds to suspect that a person with whom they have a business relationship is a politically exposed foreign person, a politically exposed domestic person or a head of an international organization, or a family member — referred to in subsection 2(1) — of, or a person who is closely associated with, one of those persons, the person or entity shall take reasonable measures to determine whether they are such a person.

Casinos

120.2 (1) A casino shall take reasonable measures to determine whether a person for whom they open an account is a politically exposed foreign person, a politically exposed domestic person, a head of an international organization, a family member — referred to in subsection 2(1) — of one of those persons or a person who is closely associated with a politically exposed foreign person.

(2) A casino shall periodically take reasonable measures to determine whether an account holder is a politically exposed foreign person, a politically exposed domestic person, a head of an international organization, a family member — referred to in subsection 2(1) — of one of those persons or a person who is closely associated with a politically exposed foreign person.

(3) A casino shall take reasonable measures to determine whether any of the following persons is a politically exposed foreign person, a politically exposed domestic person, a head of an international organization or a family member — referred to in subsection 2(1) — of, or a person who is closely associated with, one of those persons:

• (a) a person who requests that the casino initiate an international electronic funds transfer of $100,000 or more;
• (b) a beneficiary for whom the casino finally receives an international electronic funds transfer of $100,000 or more; or
• (c) a person from whom the casino receives an amount of $100,000 or more, in cash or in virtual currency.

(4) If a casino or any of their employees or officers detects a fact that constitutes reasonable grounds to suspect that an account holder is a politically exposed foreign person, a politically exposed domestic person, a head of an international organization or a family member — referred to in subsection 2(1) — of, or a person who is closely associated with, one of those persons, the casino shall take reasonable measures to determine whether the account holder is such a person.

(6) Section 44 of the Regulations is amended by replacing the portion of the subsection 121(1) that it enacts before paragraph (b) with the following:

121 (1) A financial entity, securities dealer or casino that determines under paragraph 116(1)(a), subsection 116(2) or (3), section 119 or subsection 120.2(1), (2) or (4) that a person is a politically exposed foreign person or a family member — referred to in subsection 2(1) — of, or a person who is closely associated with, a politically exposed foreign person shall

• (a) take reasonable measures to establish the source of the funds or virtual currency that is or is expected to be deposited into the account in question and the source of the person’s wealth;

(7) Section 44 of the Regulations is amended by replacing the portion of the subsection 121(2) that it enacts before paragraph (b) with the following:

(2) A financial entity, securities dealer or casino shall also take the measures referred to in paragraphs (1)(a) to (c) if

• (a) they determine under paragraph 116(1)(a), subsection 116(2) or (3), section 119 or subsection 120.2(1), (2) or (4) that a person is a politically exposed domestic person, a head of an international organization or a family member — referred to in subsection 2(1) — of one of those persons or they determine under subsection 116(3), 119(3) or 120.2(4) that a person is closely associated with a politically exposed domestic person or a head of an international organization; and

(8) Section 44 of the Regulations is amended by replacing the subsection 121(3) that it enacts with the following:

(3) A financial entity, securities dealer or casino shall take the reasonable measures referred to in paragraph 116(1)(a) and subsections 116(3), 119(1) and (3) and 120.2(1) and (4) — and, if applicable, shall take the measures referred to in paragraphs (1)(a) and (b) — within 30 days after the day on which the account is opened or the fact is detected, as the case may be.

(9) Section 44 of the Regulations is amended by replacing the portion of the subsection 122(1) that it enacts before paragraph (a) with the following:

122 (1) A financial entity, life insurance company, life insurance broker or agent, money services business, foreign money services business or casino that determines under subparagraph 116(1)(b)(i) or (iii), paragraph 117(a) or 120(1)(a) or (2)(a) or subsection 120.2(3) that a person is a politically exposed foreign person or a family member — referred to in subsection 2(1) — of, or a person who is closely associated with, such a person shall

(10) Section 44 of the Regulations is amended by replacing the portion of the subsection 122(5) that it enacts before paragraph (b) with the following:

(5) A financial entity, life insurance company, life insurance broker or agent, money services business, foreign money services business or casino shall also take the measures referred to in paragraphs (1)(a) and (b) if

• (a) they determine under subparagraph 116(1)(b)(i) or (iii), paragraph 117(a) or 120(1)(a) or (2)(a) or subsection 120.2(3) that a person is a politically exposed domestic person or a head of an international organization, or a family member — referred to in subsection 2(1) — of, or a person who is closely associated with, one of those persons; and

(11) Section 44 of the Regulations is amended by replacing the subsection 122(9) that it enacts with the following:

(9) A financial entity, life insurance company, life insurance broker or agent, money services business, foreign money services business or casino shall take the reasonable measures referred to in paragraphs 116(1)(b) and 117(a) and subsections 120(1) and (2) and 120.2(3) — and, if applicable, shall take the measures referred to in paragraphs (1)(a) and (b) or (2)(a) and (b) or subsection (3), as the case may be — within 30 days after the day on which the transaction is conducted.

(12) Section 44 of the Regulations is amended by adding, after the section 122 that it enacts, the following:

122.1 (1) A person or entity that determines under subsection 120(3), (4) or (5) or 120.1(1), (2) or (4) that a person is a politically exposed foreign person or a family member — referred to in subsection 2(1) — of, or a person who is closely associated with, a politically exposed foreign person shall

• (a) take reasonable measures to establish the source of the person’s wealth; and
• (b) take the special measures referred to in section 157.

(2) A person or entity that determines under subsection 120.1(3) that a person is a politically exposed foreign person or a family member — referred to in subsection 2(1) — of, or a person who is closely associated with, a politically exposed foreign person shall

• (a) take reasonable measures to establish the source of the funds or virtual currency used for the transaction and the source of the person’s wealth; and
• (b) ensure that a member of senior management reviews the transaction.

(3) A person or entity shall also take the measures referred to in paragraphs (1)(a) and (b) if

• (a) they determine under subsection 120(3), (4) or (5) or 120.1(1), (2) or (4) that a person is a politically exposed domestic person, a head of an international organization or a family member — referred to in subsection 2(1) — of one of those persons or they determine under subsection 120(5) or 120.1(4) that a person is closely associated with a politically exposed domestic person or a head of an international organization; and
• (b) they consider, based on a risk assessment referred to in subsection 9.6(2) of the Act, that there is a high risk of a money laundering offence or terrorist activity financing offence.

(4) A person or entity shall also take the measures referred to in paragraphs (2)(a) and (b) if

• (a) they determine under subsection 120.1(3) that a person is a politically exposed domestic person, a head of an international organization or a family member — referred to in subsection 2(1) — of one of those persons or is a person who is closely associated with a politically exposed domestic person or a head of an international organization; and
• (b) they consider, based on risk assessment referred to in subsection 9.6(2) of the Act, that there is a high risk of a money laundering offence or terrorist activity financing offence.

(5) The person or entity shall take the reasonable measures referred to in subsections 120(3) and (5) and 120.1(1) and (4) — and, if applicable, shall take the measures referred to in paragraph (1)(a) — within 30 days after the day on which they enter into the business relationship or the fact is detected, as the case may be.

(6) The person or entity shall take the reasonable measures referred to in subsection 120.1(3) — and, if applicable, shall take the measures referred to in paragraphs (2)(a) and (b) — within 30 days after the day on which the transaction is conducted.

(13) Section 44 of the Regulations is amended by replacing the portion of the subsection 123(1) that it enacts before paragraph (a) with the following:

123 (1) If a financial entity, securities dealer or casino obtains approval under subsection 121(1) or (2) to keep an account open, they shall keep a record of

(14) Section 44 of the Regulations is amended by replacing the portion of the subsection 123(2) that it enacts before paragraph (a) with the following:

(2) If a transaction that is conducted with a financial entity, money services business, foreign money services business or casino is reviewed under any of subsections 122(1) to (3) and (5) to (7), the financial entity, money services business, foreign money services business or casino shall keep a record of

(15) Section 44 of the Regulations is amended by adding, after the subsection 123(3) that it enacts, the following:

(4) If a person or entity takes any of the measures referred to in subsection 122.1(1) or (3), the person or entity shall keep a record of

• (a) the office or position and the organization or institution in respect of which the person is determined to be a politically exposed foreign person, a politically exposed domestic person or a head of an international organization, or a family member — referred to in subsection 2(1) — of, or a person who is closely associated with, one of those persons;
• (b) the date of the determination; and
• (c) the source, if known, of the person’s wealth.

(5) If a transaction that is conducted with a person or entity is reviewed under subsection 122.1(2) or (4), the person or entity shall keep a record of

• (a) the office or position and the organization or institution in respect of which the person is determined to be a politically exposed foreign person, a politically exposed domestic person or a head of an international organization, or a family member — referred to in subsection 2(1) — of, or a person who is closely associated with, one of those persons;
• (b) the date of the determination;
• (c) the source, if known, of the funds or virtual currency used for the transaction;
• (d) the source, if known, of the person’s wealth;
• (e) the name of the member of senior management who reviewed the transaction; and
• (f) the date of that review.

(16) Section 44 of the Regulations is amended by adding, before the heading “Electronic Funds Transfers” before the section 124 that it enacts, the following:

Ongoing Monitoring

123.1 A person or entity referred to in section 5 of the Act that enters into a business relationship with a client shall periodically conduct, based on a risk assessment referred to in subsection 9.6(2) of the Act that is undertaken in accordance with paragraph 156(1)(c) of these Regulations, ongoing monitoring of that business relationship for the purpose of

• (a) detecting any transactions that are required to be reported in accordance with section 7 of the Act;
• (b) keeping client identification information and the information referred to in sections 138 and 145 of these Regulations up to date;
• (c) reassessing the level of risk associated with the client’s transactions and activities; and
• (d) determining whether transactions or activities are consistent with the information obtained about their client, including the risk assessment of the client.

(17) Section 44 of the French version of the Regulations is amended by replacing the subsection 124(4) that it enacts with the following:

(4) La personne ou entité visée au paragraphe (1) élabore, par écrit des principes et des mesures axés sur le risque qu’elle applique afin d’établir, lorsqu’elle reçoit un télévirement qui, malgré la prise de mesures raisonnables au titre de l’alinéa 9.5b) de la Loi, n’est pas accompagné des renseignements requis par l’alinéa 9.5a) de la Loi, si elle devrait suspendre ou refuser le télévirement et quelles mesures de suivi elle doit prendre.

(18) Section 44 of the Regulations is amended by adding, after the section 124 that it enacts, the following:

Virtual Currency Transfers

124.1 (1) A financial entity, money services business or foreign money services business that is required to keep a record under these Regulations in respect of a virtual currency transfer shall

• (a) include, with the transfer, the name, address and, if any, the account number or other reference number of both the person or entity who requested the transfer and the beneficiary; and
• (b) take reasonable measures to ensure that any transfer received includes the information referred to in paragraph (a).

(2) Every person or entity referred to in subsection (1) shall develop and apply written risk-based policies and procedures for determining, in the case of a virtual currency transfer received by them that, despite reasonable measures taken under paragraph (1)(b), does not have included with it any of the information required under paragraph (1)(a), whether they should suspend or reject the virtual currency transfer and any follow-up measures to be taken.

(19) Section 44 of the English version of the Regulations is amended by replacing the subsection 132(2) that it enacts with the following:

(2) A report that is required to be made under these Regulations in respect of a receipt of an amount in virtual currency shall be sent to the Centre within five working days after the day on which the person or entity receives the amount.

10 (1) Section 46 of the Regulations is amended by replacing the subparagraph 156(1)(c)(ii) that it enacts with the following:

• (ii) their products, services and delivery channels,

(2) Section 46 of the Regulations is amended by replacing the subsection 156(2) that it enacts with the following:

(2) If the person or entity intends to carry out a new development or introduce a new technology that may have an impact on their clients, business relationships, products, services or delivery channels or the geographic location of their activities, they shall, in accordance with paragraph (1)(c), assess and document the risk referred to in subsection 9.6(2) of the Act before doing so.

(3) Section 46 of the Regulations is amended by replacing the subparagraph 157(b)(ii) that it enacts with the following:

• (ii) conducting, at a frequency appropriate to the level of risk, the ongoing monitoring of business relationships referred to in section 123.1.

11 Sections 47 to 49 of the Regulations are replaced by the following:

47 Schedules 1 to 3 to the Regulations are replaced by the Schedules 1 to 4 set out in Schedule 1 to these Regulations.

48 Schedule 4 to the Regulations, as enacted by SOR/2002-184, is renumbered as Schedule 5.

48.1 Schedule 5 to the Regulations is amended by replacing the references after the heading “SCHEDULE 5” with the following:

(Paragraph 8(1)(g) and subsections 131(3) and 152(1) and (3))

49 Schedules 5 to 8 to the Regulations, as enacted by SOR/2002-184, are replaced by the Schedule 6 set out in Schedule 1 to these Regulations.

12 (1) Section 60 of the Regulations is amended by replacing the item 3 of Part C of Schedule 1 that it enacts with the following:

• 3Amount of currency in the foreign currency, and its amount in Canadian dollars and exchange rate used

(2) Section 60 of the Regulations is amended by replacing the item 2 of Part D of Schedule 1 that it enacts with the following:

• 2Amount of monetary instrument in the foreign currency and its amount in Canadian dollars and exchange rate used

(3) Section 60 of the Regulations is amended by adding, after the item 5 of Part D of Schedule 1 that it enacts, the following:

• 6Purpose of importation or exportation

13 (1) Section 70 of the Regulations is amended by replacing the items 3 to 5 of Part C of Schedule 2 that it enacts with the following:

• 3Name and permanent address of person or entity shipped to and from
• 4Name of courier and names of any intermediaries
• 5Permanent address of courier and permanent addresses of any intermediaries

(2) Section 70 of the Regulations is amended by replacing the items 8 to 13 of Part C of Schedule 2 that it enacts with the following:

• 8Name and permanent address of the person or entity that is ultimate origin of currency or monetary instrument and, in the case of an entity, the nature of their principal business
• 9Name and permanent address of the person or entity that is ultimate destination of currency or monetary instrument and, in the case of an entity, the nature of their principal business
• 10Departure point of currency or monetary instrument (country, city) and date of departure
• 11Arrival point of currency or monetary instrument (country, city) and date of arrival
• 12Transit points of currency or monetary instrument (country, city) and dates of arrival at and departure from each transit point
• 13Points where (country, city) and dates when intermediaries obtain physical possession of currency or monetary instrument

14 Section 73 of the Regulations is amended by repealing the item 8 of Part D of Schedule 2 that it enacts.

15 (1) Section 74 of the Regulations is amended by replacing the item 3 of Part E of Schedule 2 that it enacts with the following:

• 3Amount of currency in the foreign currency, and its amount in Canadian dollars and exchange rate used
• 4Purpose of importation or exportation

(2) Section 74 of the Regulations is amended by replacing the item 2 of Part F of Schedule 2 that it enacts with the following:

• 2Amount of monetary instrument in the foreign currency and its amount in Canadian dollars and exchange rate used

(3) Section 74 of the Regulations is amended by adding, after the item 5 of Part F of Schedule 2 that it enacts, the following:

• 6Purpose of importation or exportation

16 Section 80 of the Regulations is replaced by the following:

80 Part B of Schedule 3 to the Regulations is amended by replacing item 2 with the following:

• 2Amount, in Canadian dollars, of currency or monetary instrument
• 3Name and permanent address of person or entity shipped to and from
• 4Departure point of currency or monetary instrument (country, city) and date of departure
• 5Arrival point of currency or monetary instrument (country, city) and date of arrival
• 6Transit points of currency or monetary instrument (country, city) and dates of arrival at and departure from each transit point

17 Section 83 of the Regulations is amended by replacing the section 2 that it enacts with the following:

2 For the purposes of subsection 54.1(3) of the Act, identifying information means the information set out in Parts A and C of Schedule 1 and the dates when a person’s or entity’s registration is revoked or expires and when a registered person or entity ceases an activity.

18 Sections 106 to 108 of the Regulations are replaced by the following:

105.1 The heading before section 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations¹ is replaced by the following:

Definition

106 Section 2 of the Regulations is repealed.

107 (1) Paragraph 3(b) of the Regulations is replaced by the following:

• (b) a provision of the Act and a provision of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations set out in columns 1 and 2 of Part 2 of the schedule or, in the case of an item of Part 2 of the schedule where no provision of the Act is set out in column 1, a provision of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations set out in column 2 of Part 2 of the schedule; and

(2) Section 3 of the Regulations is amended by striking out “and” at the end of paragraph (c) and by repealing paragraph (d).

108 Subsection 4(1) of the Regulations is replaced by the following:

4 (1) Each violation is classified as a minor, serious or very serious violation, as set out in column 2 of Part 1 of the schedule and in column 3 of Parts 2 and 3 of the schedule.

19 Sections 113 to 118 of the Regulations are replaced by the following:

113 Items 2 and 3 of Part 4 of the schedule to the Regulations are replaced by the following:

Item	Column 1 Provision of Proceeds of Crime (Money Laundering) and Terrorist Financing Act	Column 2 Provision of Proceeds of Crime (Money Laundering) and Terrorist Financing Registration Regulations	Column 3 Short-form Description	Column 4 Classification of Violation
2	11.13	4(b) and 5	Failure of an applicant or a registered person or entity to submit a notification of a change to the information contained in an application, or of newly obtained information, in the prescribed manner and with the prescribed information	serious

114 The schedule to the Regulations is replaced by the schedule set out in Schedule 2 to these Regulations.

20 Subsection 119(3) of the Regulations is replaced by the following:

(3) Section 3, subsections 6(1) to (3) and sections 50 to 98, 100 to 105 and 111 to 113 come into force on the day on which subsection 256(2) of the Economic Action Plan 2014 Act, No. 1, chapter 20 of the Statutes of Canada, 2014, comes into force.

21 The schedule to the Regulations is numbered as Schedule 1.

22 The Regulations are amended by adding, after Schedule 1, the Schedule 2 set out in the schedule to these Regulations.

Coming into Force

23 These Regulations come into force on the day on which they are registered.

SCHEDULE

(Section 22)

SCHEDULE 2

(Section 114)

SCHEDULE

(Sections 3 and 4)

PART 1

Proceeds of Crime (Money Laundering) and Terrorist Financing Act

Item	Column 1 Provision of Act	Column 2 Classification of Violation
1	7	Very serious
2	9(3)	Serious
3	9.2	Serious
4	9.31(1)	Serious
5	9.4(1)(c)	Serious
6	9.4(1)(d)	Serious
7	9.4(2)	Serious
8	9.5(a)	Minor
9	9.5(b)	Minor
10	9.6(3)	Serious
11	9.7(1)	Serious
12	9.7(2)	Serious
13	9.7(4)	Minor
14	9.8(1)	Serious
15	11.1	Serious
16	11.12(1)	Serious
17	11.13(1)	Serious
18	11.14(1)	Serious
19	11.17(1)	Serious
20	11.19	Serious
21	11.2	Serious
22	11.43	Very serious
23	11.44(1)	Very serious
24	11.44(2)	Serious
25	62(2)	Serious
26	63.1(2)	Serious

PART 2

Proceeds of Crime (Money Laundering) and Terrorist Financing Act and Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations

Item	Column 1 Provision of Act	Column 2 Provision of Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations	Column 3 Classification of Violation
1	9(1)	7(1)(a)	Minor
2	9(1)	7(1)(b)	Minor
3	9(1)	7(1)(c)	Minor
4	9(1)	7(1)(d)	Minor
5	9(1)	8(3)(a)	Minor
6	9(1)	8(3)(b)(i)	Minor
7	9(1)	8(3)(b)(ii)	Minor
8	9(1)	8(3)(b)(iii)	Minor
9	9(3)	9(a)	Minor
10	9(3)	9(b)	Minor
11	6	10	Minor
12	6	11	Minor
13	6	12	Minor
14	6	13	Minor
15	6	14(1)	Minor
16	6	15(1)	Minor
17	9.4(1)(a)	16(2)	Minor
18	9.4(1)(e)	16(3)	Serious
19	9(1)	18	Minor
20	9(1)	19	Minor
21	6	20	Minor
22	6	21	Minor
23	6	22	Minor
24	6	23	Minor
25	9(1)	25	Minor
26	9(1)	26	Minor
27	6	27	Minor
28	6	28	Minor
29	6	29	Minor
30	9(1)	30(1)(a)	Minor
31	9(1)	30(1)(b)	Minor
32	9(1)	30(1)(c)	Minor
33	9(1)	30(1)(d)	Minor
34	9(1)	30(1)(e)	Minor
35	9(1)	30(1)(f)	Minor
36	6	31	Minor
37	6	32	Minor
38	9(1)	33(1)(a)	Minor
39	9(1)	33(1)(b)	Minor
40	9(1)	33(1)(c)	Minor
41	9(1)	33(1)(d)	Minor
42	9(1)	33(1)(e)	Minor
43	9(1)	33(1)(f)	Minor
44	6	34	Minor
45	6	35	Minor
46	6	36	Minor
47	6	37	Minor
48	9(1)	39	Minor
49	9(1)	40	Minor
50	6	41	Minor
51	6	42	Minor
52	6	43	Minor
53	9(1)	48	Minor
54	9(1)	49	Minor
55	6	50	Minor
56	6	51	Minor
57	6	52	Minor
58	9(1)	54	Minor
59	9(1)	55	Minor
60	6	56	Minor
61	6	57	Minor
62	6	58(1)	Minor
63	9(1)	60	Minor
64	9(1)	61	Minor
65	6	62	Minor
66	6	63	Minor
67	6	64	Minor
68	9(1)	66	Minor
69	9(1)	67	Minor
70	6	68	Minor
71	6	69	Minor
72	9(1)	70(1)(a)	Minor
73	9(1)	70(1)(b)	Minor
74	9(1)	70(1)(c)	Minor
75	9(1)	70(1)(d)	Minor
76	9(1)	71	Minor
77	6	72(1)	Minor
78	6	73	Minor
79	6	74	Minor
80	9(1)	78	Minor
81	9(1)	79	Minor
82	6	80	Minor
83	6	81	Minor
84	6	82	Minor
85	6.1	84	Minor
86	6.1	85(1)	Minor
87	6.1	86	Minor
88	6.1	87	Minor
89	6.1	88	Minor
90	6.1	89	Minor
91	9.4(1)(a)	90(a)	Minor
92	9.4(1)(a)	90(b)	Minor
93	9.4(1)(a)	91(a)	Minor
94	9.4(1)(a)	91(b)	Minor
95	6.1	92	Minor
96	6.1	94	Minor
97	6.1	95(1), (3) or (4)	Minor
98	6.1	96	Minor
99	6.1	100	Minor
100	6.1	101(1)	Minor
101	6.1	101(3)	Minor
102	6	101(4)	Minor
103	6.1	102	Minor
104	6.1	103	Minor
105	6.1	104	Minor
106	6	108	Minor
107	6	109(5)	Minor
108	6.1	111(2)	Minor
109	6	112(4)	Minor
110	6.1	114(2)	Minor
111	9.3(1)	116(1)(a)	Minor
112	9.3(1)	116(1)(b)	Minor
113	9.3(1)	116(2)	Minor
114	9.3(1)	116(3)	Minor
115	9.3(1)	117	Minor
116	9.3(1)	119(1)	Minor
117	9.3(1)	119(2)	Minor
118	9.3(1)	119(3)	Minor
119	9.3(1)	120(1)	Minor
120	9.3(1)	120(2)	Minor
121	9.3(1)	120(3)	Minor
122	9.3(1)	120(4)	Minor
123	9.3(1)	120(5)	Minor
124	9.3(1)	120.1(1)	Minor
125	9.3(1)	120.1(2)	Minor
126	9.3(1)	120.1(3)	Minor
127	9.3(1)	120.1(4)	Minor
128	9.3(1)	120.2(1)	Minor
129	9.3(1)	120.2(2)	Minor
130	9.3(1)	120.2(3)	Minor
131	9.3(1)	120.2(4)	Minor
132	9.3(2)	121(1)(a)	Minor
133	9.3(2)	121(1)(b)	Minor
134	9.3(2)	121(1)(c)	Minor
135	9.3(2.1)	121(2)	Minor
136	9.3	121(3)	Minor
137	9.3(2)	122(1)(a)	Minor
138	9.3(2)	122(1)(b)	Minor
139	9.3(2)	122(2)(a)	Minor
140	9.3(2)	122(2)(b)	Minor
141	9.3(2)	122(3)	Minor
142	9.3(2)	122(4)(a)	Minor
143	9.3(2)	122(4)(b)	Minor
144	9.3(2.1)	122(5)	Minor
145	9.3(2.1)	122(6)	Minor
146	9.3(2.1)	122(7)	Minor
147	9.3(2.1)	122(8)	Minor
148	9.3	122(9)	Minor
149	9.3	122(10)	Minor
150	9.3(2)	122.1(1)(a)	Minor
151	9.3(2)	122.1(1)(b)	Minor
152	9.3(2)	122.1(2)(a)	Minor
153	9.3(2)	122.1(2)(b)	Minor
154	9.3(2.1)	122.1(3)	Minor
155	9.3(2.1)	122.1(4)	Minor
156	9.3(2.1)	122.1(5)	Minor
157	9.3(2.1)	122.1(6)	Minor
158	6	123(1)	Minor
159	6	123(2)	Minor
160	6	123(3)	Minor
161	6	123(4)	Minor
162	6	123(5)	Minor
163		123.1	Minor
164		124.1(1)	Minor
165		124.1(2)	Minor
166	9(1)	125	Minor
167	9(1)	131(1)	Minor
168	9(1)	131(2)	Minor
169	9(1)	132(1)	Minor
170	9(1)	132(2)	Minor
171	9(1)	132(3)	Minor
172	6.1	134(1)	Minor
173	6	134(2)	Minor
174	6	134(3)	Minor
175	6.1	135(1)	Minor
176	6	135(2)	Minor
177	6	135(3)	Minor
178	6.1	136(1)	Minor
179	6	136(2)	Minor
180	6	136(3)	Minor
181	6.1	137(1)	Minor
182	6	137(2)	Minor
183	6	137(3)	Minor
184	6.1	138(1)	Minor
185	6.1	138(2)	Minor
186	6	138(3)	Minor
187	6.1	138(4)(a)	Serious
188	9.6(3)	138(4)(b)	Serious
189	6	138(5)	Minor
190	6	139	Minor
191	6	144	Minor
192	6	145	Minor
193	6	146(1)	Minor
194	6	148(1)	Minor
195	6	149	Minor
196	9.6(1)	156(1)(a)	Serious
197	9.6(1)	156(1)(b)	Serious
198	9.6(1)	156(1)(c) and (2)	Serious
199	9.6(1)	156(1)(d) and (e)	Serious
200	9.6(1)	156(1)(f) and (3)	Serious
201	9.6(1)	156(4)	Serious

PART 3

Proceeds of Crime (Money Laundering) and Terrorist Financing Act and Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations

Item	Column 1 Provision of Act	Column 2 Provision of Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations	Column 3 Classification of Violation
1	7	9(1)	Serious
2	7	9(2)	Serious
3	7.1	10	Very serious
4	7 and 7.1	12	Serious
5	6	12.1(1)	Minor