Regulations Amending the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations and the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations: SOR/2023-194

Canada Gazette, Part II, Volume 157, Number 21

Registration
SOR/2023-194 September 26, 2023

PROCEEDS OF CRIME (MONEY LAUNDERING) AND TERRORIST FINANCING ACT

P.C. 2023-910 September 25, 2023

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, makes the annexed Regulations Amending the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations and the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations under subsections 73(1)footnote a and 73.1(1)footnote b of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.footnote c

Regulations Amending the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations and the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations

Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations

1 Subsection 1(2) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations footnote 1 is amended by adding the following in alphabetical order:

mortgage administrator
means a person or entity, other than a financial entity, that is engaged in the business of servicing mortgage agreements on real property or hypothec agreements on immovables on behalf of a lender. (administrateur hypothécaire)
mortgage broker
means a person or entity that is authorized under provincial legislation to act as an intermediary between a lender and a borrower with respect to loans secured by mortgages on real property or hypothecs on immovables. (courtier hypothécaire)
mortgage lender
means a person or entity, other than a financial entity, that is engaged in the business of providing loans secured by mortgages on real property or hypothecs on immovables. (prêteur hypothécaire)

2 Paragraph 4.1(c) of the Regulations is replaced by the following:

3 (1) Subparagraph 16(1)(a)(i) of the Regulations is replaced by the following:

(2) Subsection 16(2) of the Regulations is amended by striking out “and” at the end of paragraph (g) and by adding the following after that paragraph:

(3) Subsection 16(2) of the Regulations is amended by adding the following after paragraph (h):

(4) Section 16 of the Regulations is amended by adding the following after subsection (3):

(3.1) A financial entity that enters into a correspondent banking relationship shall periodically conduct, at a frequency that is appropriate to the level of risk, based on a risk assessment referred to in subsection 9.6(2) of the Act that takes into account the information collected in respect of the foreign financial institution in accordance with the Act and these Regulations, ongoing monitoring of that correspondent banking relationship for the purpose of

4 The Regulations are amended by adding the following after section 64:

Mortgage Administrators, Mortgage Brokers and Mortgage Lenders

64.1 (1) A mortgage administrator is engaged in a business or profession for the purposes of paragraph 5(i) of the Act.

(2) A mortgage broker is engaged in a business or profession for the purposes of paragraph 5(i) of the Act.

(3) A mortgage lender is engaged in a business or profession for the purposes of paragraph 5(i) of the Act.

64.2 A mortgage administrator, mortgage broker or mortgage lender that receives an amount of $10,000 or more in cash in a single transaction shall report the transaction to the Centre, together with the information set out in Schedule 1, unless the 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.

64.3 A mortgage administrator, mortgage broker or mortgage lender that receives an amount of $10,000 or more in virtual currency in a single transaction shall report the transaction to the Centre, together with the information set out in Schedule 4, unless the 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.

64.4 A mortgage administrator, mortgage broker or mortgage lender shall keep a large cash transaction record in respect of every amount of $10,000 or more in cash that they receive in a single transaction, unless the 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.

64.5 A mortgage administrator, mortgage broker or mortgage lender shall keep a large virtual currency transaction record in respect of every amount of $10,000 or more in virtual currency that they receive in a single transaction, unless the 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.

64.6 A mortgage administrator, mortgage broker or mortgage lender shall keep the following records:

5 Section 90 of the Regulations is amended by striking out “and” at the end of paragraph (a) and replacing paragraph (b) with the following:

6 The Regulations are amended by adding the following after section 102:

Mortgage Administrators, Mortgage Brokers and Mortgage Lenders

102.1 A mortgage administrator, mortgage broker or mortgage lender shall

7 Paragraph 105(7)(a) of the Regulations is replaced by the following:

8 Paragraph 109(4)(i) of the Regulations is replaced by the following:

9 Paragraph 112(3)(i) of the Regulations is replaced by the following:

10 Section 120.1 of the Regulations is replaced by the following:

120.1 (1) A British Columbia notary public, British Columbia notary corporation, accountant, accounting firm, real estate broker or sales representative, real estate developer, mortgage administrator, mortgage broker, mortgage lender, dealer in precious metals and precious stones, department or agent of His Majesty in right of Canada or agent or mandatary of His 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, mortgage administrator, mortgage broker, mortgage lender, dealer in precious metals and precious stones, department or agent of His Majesty in right of Canada or agent or mandatary of His 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, mortgage administrator, mortgage broker, mortgage lender, dealer in precious metals and precious stones, department or agent of His Majesty in right of Canada or agent or mandatary of His 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 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.

(4) If a British Columbia notary public, British Columbia notary corporation, accountant, accounting firm, real estate broker or sales representative, real estate developer, mortgage administrator, mortgage broker, mortgage lender, dealer in precious metals and precious stones, department or agent of His Majesty in right of Canada or agent or mandatary of His 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.

11 (1) Subsection 140(1) of the English version of the Regulations is replaced by the following:

140 (1) For the purposes of paragraph 7(1)(a), sections 18 and 25 and paragraphs 30(1)(a) and 70(1)(a), if the person or entity that has the obligation to report authorizes another person or entity to receive funds on their behalf, and that other person or entity receives an amount of $10,000 or more in cash in a single transaction in accordance with the authorization, the person or entity that has the obligation to report is deemed to have received the amount when it is received by the other person or entity.

(2) Subsection 140(3) of the Regulations is replaced by the following:

(3) For the purposes of sections 39, 48, 54, 60, 64.2, 66 and 78, if the person or entity that has the obligation to report authorizes another person or entity to receive funds on their behalf in connection with the activity referred to in the applicable section, and that other person or entity receives an amount of $10,000 or more in cash in a single transaction in accordance with the authorization, the person or entity that has the obligation to report is deemed to have received the amount when it is received by the other person or entity.

12 (1) Subsection 141(1) of the English version of the Regulations is replaced by the following:

141 (1) For the purposes of paragraph 7(1)(d), sections 19 and 26 and paragraphs 30(1)(f) and 70(1)(d), if the person or entity that has the obligation to report authorizes another person or entity to receive virtual currency on their behalf, and that other person or entity receives an amount of $10,000 or more in virtual currency in a single transaction in accordance with the authorization, the person or entity that has the obligation to report is deemed to have received the amount when it is received by the other person or entity.

(2) Subsection 141(3) of the Regulations is replaced by the following:

(3) For the purposes of sections 40, 49, 55, 61, 64.3, 67 and 79, if the person or entity that has the obligation to report authorizes another person or entity to receive virtual currency on their behalf in connection with the activity referred to in the applicable section, and that other person or entity receives an amount of $10,000 or more in virtual currency in a single transaction in accordance with the authorization, the person or entity that has the obligation to report is deemed to have received the amount when it is received by the other person or entity.

13 (1) Subsection 142(1) of the English version of the Regulations is replaced by the following:

142 (1) For the purposes of sections 10, 20, 27 and 31 and subsection 72(1), if the person or entity that has the obligation to keep a large cash transaction record authorizes another person or entity to receive funds on their behalf, and that other person or entity receives an amount of $10,000 or more in cash in a single transaction in accordance with the authorization, the person or entity that has the obligation to keep the large cash transaction record is deemed to have received the amount when it is received by the other person or entity.

(2) Subsection 142(3) of the Regulations is replaced by the following:

(3) For the purposes of sections 41, 50, 56, 62, 64.4, 68 and 80, if the person or entity that has the obligation to keep a large cash transaction record authorizes another person or entity to receive funds on their behalf in connection with the activity referred to in the applicable section, and that other person or entity receives an amount of $10,000 or more in cash in a single transaction in accordance with the authorization, the person or entity that has the obligation to keep the large cash transaction record is deemed to have received the amount when it is received by the other person or entity.

14 (1) Subsection 143(1) of the English version of the Regulations is replaced by the following:

143 (1) For the purposes of sections 11, 21, 28, 32 and 73, if the person or entity that has the obligation to keep a large virtual currency transaction record authorizes another person or entity to receive virtual currency on their behalf, and that other person or entity receives an amount of $10,000 or more in virtual currency in a single transaction in accordance with the authorization, the person or entity that has the obligation to keep the large virtual currency transaction record is deemed to have received the amount when it is received by the other person or entity.

(2) Subsection 143(3) of the Regulations is replaced by the following:

(3) For the purposes of sections 42, 51, 57, 63, 64.5, 69 and 81, if the person or entity that has the obligation to keep a large virtual currency transaction record authorizes another person or entity to receive virtual currency on their behalf in connection with the activity referred to in the applicable section, and that other person or entity receives an amount of $10,000 or more in virtual currency in a single transaction in accordance with the authorization, the person or entity that has the obligation to keep the large virtual currency transaction record is deemed to have received the amount when it is received by the other person or entity.

15 Subparagraph 156(1)(c)(i) of the Regulations is replaced by the following:

16 Schedule 1 to the Regulations is amended by replacing the references after the heading “SCHEDULE 1” with the following:

(Paragraph 7(1)(a), sections 18 and 25, paragraphs 30(1)(a) and 33(1)(a), sections 39, 48, 54, 60, 64.2 and 66, paragraph 70(1)(a), section 78, subsection 131(3) and section 152)

17 Schedule 4 to the Regulations is amended by replacing the references after the heading “SCHEDULE 4” with the following:

(Paragraph 7(1)(d), sections 19 and 26, paragraphs 30(1)(f) and 33(1)(f), sections 40, 49, 55, 61, 64.3 and 67, paragraph 70(1)(d), section 79, subsection 131(3) and section 152)

18 The English version of the Regulations is amended by replacing “Her Majesty” with “His Majesty” in the following provisions:

Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations

19 (1) Part 2 of the schedule to the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations footnote 2 is amended by adding the following after item 18:
Item

Column 1

Provision of Act

Column 2

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

Column 3

Classification of Violation

18.1 9.4(1)(e) 16(3.1) Serious
(2) Part 2 of the schedule to the Regulations is amended by adding the following after item 67:
Item

Column 1

Provision of Act

Column 2

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

Column 3

Classification of Violation

67.1 9(1) 64.2 Minor
67.2 9(1) 64.3 Minor
67.3 6 64.4 Minor
67.4 6 64.5 Minor
67.5 6 64.6 Minor
(3) Item 92 of Part 2 of the schedule to the Regulations is replaced by the following:
Item

Column 1

Provision of Act

Column 2

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

Column 3

Classification of Violation

92 9.4(1)(a) 90(b)(i) Minor
92.1 9.4(1)(a) 90(b)(ii) Minor
92.2 9.4(1)(e) 90(b)(iii) Minor
92.3 9.4(1)(e) 90(c) Minor
(4) Part 2 of the schedule to the Regulations is amended by adding the following after item 103:
Item

Column 1

Provision of Act

Column 2

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

Column 3

Classification of Violation

103.1 6.1 102.1 Minor

Coming into Force

20 These Regulations come into force on the first anniversary of the day on which they are published in the Canada Gazette, Part II.

N.B. The Regulatory Impact Analysis Statement for these Regulations appears following SOR/2023-193, Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.