An Act to amend the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Income Tax Act and to make a consequential amendment to another Act (S.C. 2006, c. 12)
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Assented to 2006-12-14
38. Section 72 of the Act is replaced by the following:
Marginal note:Review of Act by parliamentary committee
72. (1) Every five years beginning on the day on which this section comes into force, the administration and operation of this Act shall be reviewed by the committee of the House of Commons, of the Senate or of both Houses that is designated or established for that purpose.
Marginal note:Review by Privacy Commissioner
(2) Every two years beginning on the day on which this section comes into force, the Privacy Commissioner, appointed under section 53 of the Privacy Act, shall review the measures taken by the Centre to protect information it receives or collects under this Act and shall, within three months after the review, submit a report on those measures to the Speaker of the Senate and the Speaker of the House of Commons, who shall each table the report in the House over which he or she presides without delay after receiving it or, if that House is not then sitting, on any of the first 15 days on which that House is sitting after the Speaker receives it.
Marginal note:2001, c. 41, s. 73(1)
39. (1) Paragraph 73(1)(f) of the Act is replaced by the following:
(e.2) prescribing the form and manner in which persons or entities or classes of persons or entities shall report under section 7, 7.1, 9 or 9.1;
(f) specifying measures, and the periods within which those measures must be taken, that persons or entities are to take to identify any person or entity that requests the opening of an account or any person or entity in respect of which a record is required to be kept or a report made;
(2) Subsection 73(1) of the Act is amended by striking out the word “and” at the end of paragraph (h) and by replacing paragraph (i) with the following:
(i) prescribing the circumstances referred to in section 9.2;
(j) prescribing, for the purposes of subsection 9.3(1), the manner for determining whether a person is a politically exposed foreign person and the circumstances in which it is necessary to make that determination;
(k) prescribing, for the purposes of subsection 9.3(2), the circumstances in which it is necessary to obtain the approval of senior management and the measures to be taken when dealing with a politically exposed foreign person;
(l) prescribing the offices and positions whose holders are politically exposed foreign persons for the purposes of paragraph 9.3(3)(j), prescribing the family members that are included in the definition “politically exposed foreign person” in subsection 9.3(3) and defining “foreign state” for the purposes of that subsection;
(m) prescribing the foreign entities to which subsection 9.4(1) applies and, for the purposes of that subsection, prescribing the information to be obtained about those entities and prescribing the measures to be taken;
(n) defining the expression “shell bank” referred to in section 9.4;
(o) prescribing the services referred to in the definition “correspondent banking relationship” in subsection 9.4(3);
(p) prescribing the electronic funds transfers to which section 9.5 applies, the information to be included with those transfers and the measures to be taken under that section;
(q) specifying the manner for establishing and implementing the program referred to in subsection 9.6(1);
(r) prescribing the special measures to be taken under subsection 9.6(3);
(s) prescribing persons and entities that must be registered with the Centre under section 11.1;
(t) prescribing persons or entities or classes of persons or entities that are not subject to section 11.1;
(u) prescribing, for the purposes of paragraph 11.11(1)(f), persons or entities that are not eligible for registration;
(v) prescribing the form and manner of submitting an application for registration under subsection 11.12(1) and the information that must be included with the application;
(w) prescribing the form and manner of notifying the Centre of any information that must be provided under section 11.13;
(x) prescribing the form and manner of providing the Centre with any clarifications under subsection 11.14(1) and any clarifications under subsection 11.17(1);
(y) prescribing, for the purposes of section 11.19, the form and manner for renewing registration and any longer renewal period;
(z) defining “identifying information” for the purposes of subsection 54.1(3); and
(z.1) prescribing anything else that by this Act is to be prescribed.
40. The Act is amended by adding the following after section 73:
PART 4.1NOTICES OF VIOLATION, COMPLIANCE AGREEMENTS AND PENALTIES
Violations
Marginal note:Regulations
73.1 (1) The Governor in Council may make regulations
(a) designating, as a violation that may be proceeded with under this Part, the contravention of a specified provision of this Act or the regulations;
(b) classifying each violation as a minor violation, a serious violation or a very serious violation, and classifying a series of minor violations as a serious violation or a very serious violation;
(c) having regard to subsection (2), fixing a penalty, or a range of penalties, in respect of any violation;
(d) prescribing the additional penalty to be paid for the purposes of subsection 73.18(1);
(e) respecting the service of documents under this Part, including the manner and proof of service and the circumstances under which documents are deemed to be served; and
(f) generally for carrying out the purposes and provisions of this Part.
Marginal note:Maximum penalties
(2) The maximum penalty for a violation is $100,000 if the violation is committed by a person and $500,000 if the violation is committed by an entity.
Marginal note:Criteria for penalty
73.11 Except if a penalty is fixed under paragraph 73.1(1)(c), the amount of a penalty shall, in each case, be determined taking into account that penalties have as their purpose to encourage compliance with this Act rather than to punish, the harm done by the violation and any other criteria that may be prescribed by regulation.
Marginal note:How contravention may be proceeded with
73.12 If a contravention that is designated under paragraph 73.1(1)(a) can be proceeded with either as a violation or as an offence under this Act, proceeding in one manner precludes proceeding in the other.
Marginal note:Commission of violation
73.13 (1) Every contravention that is designated under paragraph 73.1(1)(a) constitutes a violation and the person who commits the violation is liable to a penalty determined in accordance with sections 73.1 and 73.11.
Marginal note:Notice of violation or compliance agreement
(2) If the Centre believes on reasonable grounds that a person or entity has committed a violation, the Centre may
(a) issue and cause to be served on the person or entity a notice of violation; or
(b) issue and cause to be served on the person or entity a notice of violation with an offer to reduce by half the penalty proposed in the notice if the person or entity enters into a compliance agreement with the Centre in respect of the provision to which the violation relates.
Notices of Violation
Marginal note:Contents of notice
73.14 (1) When the Centre issues a notice of violation under subsection 73.13(2), the notice shall name the person or entity believed to have committed a violation, identify the violation and set out
(a) the penalty that the Centre proposes to impose;
(b) the right of the person or entity, within 30 days after the day on which the notice is served or within any longer period that the Centre specifies, to pay the penalty or to make representations to the Director with respect to the violation and the proposed penalty, and the manner for doing so; and
(c) the fact that, if the person or entity does not pay the penalty or make representations in accordance with the notice, the person or entity will be deemed to have committed the violation and the Centre will impose the penalty in respect of it.
Marginal note:Administrative corrections
(2) If a notice of violation contains any error or omission, the Centre may serve a corrected notice of violation on the person or entity at any time during the period referred to in paragraph (1)(b).
Marginal note:Payment of penalty
73.15 (1) If the person or entity pays the penalty proposed in the notice of violation, the person is deemed to have committed the violation and proceedings in respect of it are ended.
Marginal note:Representations to Director
(2) If the person or entity makes representations in accordance with the notice, the Director shall decide, on a balance of probabilities, whether the person or entity committed the violation and, if so, may, subject to any regulations made under paragraph 73.1(1)(c), impose the penalty proposed, a lesser penalty or no penalty.
Marginal note:Failure to pay or make representations
(3) A person or entity that neither pays the penalty nor makes representations in accordance with the notice is deemed to have committed the violation and the Centre shall impose the penalty proposed in the notice.
Marginal note:Notice of decision and right of appeal
(4) The Director shall cause notice of any decision made under subsection (2) or the penalty imposed under subsection (3) to be issued and served on the person or entity together with, in the case of a decision made under subsection (2) in respect of a serious violation or very serious violation, notice of the right of appeal under subsection 73.21(1).
Compliance Agreements
Marginal note:Contents of compliance agreement
73.16 (1) When the Centre offers to enter into a compliance agreement under paragraph 73.13(2)(b), the agreement shall
(a) identify the violation and provide that the person or entity will comply with the provision to which the violation relates within the period, and be subject to the terms and conditions, specified in the agreement; and
(b) set out the amount that the person or entity will have to pay as the reduced penalty for the violation if the compliance agreement is entered into.
Marginal note:Refusal to enter into agreement
(2) The person or entity shall enter into the compliance agreement and pay the reduced penalty within 10 days after receiving the notice of violation and, if it does not do so, the person or entity is deemed to have refused to enter into the agreement, and the full penalty proposed in the notice of violation and section 73.15 apply.
Marginal note:Extension of period
(3) The Centre may extend the period referred to in paragraph (1)(a) if the Centre is satisfied that the person or entity with which the compliance agreement was entered into is unable to comply with it within that period for reasons beyond their control.
Marginal note:Compliance agreement complied with
73.17 If the Centre considers that a compliance agreement has been complied with, the Centre shall serve a notice to that effect on the person or entity and, on the service of the notice, no further proceedings may be taken against the person or entity with respect to the violation.
Marginal note:Compliance agreement not complied with
73.18 (1) If the Centre considers that a compliance agreement has not been complied with, the Centre may issue and serve a notice of default on the person or entity to the effect that the person or entity is liable to pay the remainder of the penalty set out in the notice of violation and a prescribed additional penalty.
Marginal note:Contents of notice
(2) A notice of default shall include the date, which shall be 30 days after the day on which the notice is served, on or before which an application for review may be filed and particulars of how the application may be filed.
Marginal note:No set-off or compensation
(3) On the service of a notice of default, the person or entity served has no right of set-off or compensation against any amount that they spent under the compliance agreement.
Marginal note:Application for review
73.19 (1) A person or entity served with a notice of default under subsection 73.18(1) may, on or before the date specified in the notice or within any further time that the Centre allows, file an application for review by the Director.
Marginal note:Review
(2) The Director may confirm the Centre’s decision or decide that the person or entity has complied with the compliance agreement.
Marginal note:Failure to pay or apply for review
(3) A person or entity that neither pays the amounts set out in the notice of default nor files an application for review in accordance with the notice is deemed to have not complied with the compliance agreement and shall pay the amounts without delay.
Marginal note:Notice of decision and right of appeal
(4) The Director shall cause notice of the decision to be issued and served on the person or entity together with, in the case of a serious violation or very serious violation, notice of the right of appeal under subsection 73.21(1).
Marginal note:Deemed violation
73.2 A person or entity that enters into a compliance agreement is deemed to have committed the violation in respect of which the agreement was entered into.
Appeal to Federal Court
Marginal note:Right of appeal
73.21 (1) A person or entity on which a notice of a decision made under subsection 73.15(2) or 73.19(2) is served, in respect of a serious violation or very serious violation, may, within 30 days after the day on which the notice is served, or within any longer period that the Court allows, appeal the decision to the Federal Court.
Marginal note:Appeal — no notice of decision
(2) If the Director does not cause notice of a decision to be issued and served under subsection 73.15(4) within 90 days after the completion of representations made under subsection 73.15(2), the person or entity that made the representations may appeal the penalty proposed in the notice of violation to the Federal Court, within 30 days after the day on which the 90-day period expires.
Marginal note:Appeal — no notice of decision
(3) If the Director does not cause notice of a decision to be issued and served under subsection 73.19(4) within 90 days after the day on which the Director received the application for review under subsection 73.19(1), the person or entity that filed the application may appeal to the Federal Court the amounts set out in the notice of default referred to in subsection 73.18(1), within 30 days after the day on which the 90-day period expires.
Marginal note:Precautions against disclosure
(4) In an appeal, the Court shall take every reasonable precaution, including, when appropriate, conducting hearings in private, to avoid the disclosure by the Court or any person or entity of information referred to in subsection 55(1).
Marginal note:Powers of Court
(5) On an appeal, the Court may confirm, set aside or, subject to any regulations made under paragraph 73.1(1)(c), vary the decision of the Director.
Publication
Marginal note:Publication
73.22 When proceedings in respect of a violation are ended, the Centre may make public the nature of the violation, the name of the person or entity that committed it, and the amount of the penalty imposed.
Rules about Violations
Marginal note:Violations not offences
73.23 (1) For greater certainty, a violation is not an offence.
Marginal note:Non-application of section 126 of the Criminal Code
(2) Section 126 of the Criminal Code does not apply in respect of any obligation or prohibition under this Act whose contravention is a violation under this Act.
Marginal note:Due diligence available
73.24 (1) Due diligence is a defence in a proceeding in relation to a violation.
Marginal note:Common law principles
(2) Every rule and principle of the common law that renders any circumstance a justification or an excuse in relation to a charge for an offence applies in respect of a violation to the extent that it is not inconsistent with this Act.
Collection of Penalties
Marginal note:Debts to Her Majesty
73.25 (1) A penalty and any interest due in respect of the penalty constitute a debt due to Her Majesty in right of Canada and may be recovered in the Federal Court.
Marginal note:Time limit
(2) No proceedings to recover a debt referred to in subsection (1) may be commenced after the period of five years that begins on the day on which the debt became payable.
Marginal note:Proceeds payable to Receiver General
(3) A penalty paid or recovered under this Part is payable to and shall be remitted to the Receiver General.
Marginal note:Certificate
73.26 (1) The unpaid amount of any debt referred to in subsection 73.25(1) may be certified by the Director.
Marginal note:Registration in Federal Court
(2) Registration in the Federal Court of a certificate made under subsection (1) has the same effect as a judgment of that Court for a debt of the amount specified in the certificate and all related registration costs.
Marginal note:Collecting penalties
73.27 (1) The Centre may, for the purpose of collecting penalties proposed in a notice of violation issued under subsection 73.13(2) or imposed under this Part, enter into a contract, memorandum of understanding or other agreement with a department or an agency of the Government of Canada or the government of a province and with any other person or organization, inside Canada, in its own name or in the name of Her Majesty in right of Canada.
Marginal note:Disclosure of information
(2) The Centre may disclose to the other party of the contract, memorandum or agreement any information required to collect the penalties.
Marginal note:Use of information
(3) The other party shall not use the information referred to in subsection (2) for any purpose other than collecting the penalties.
Marginal note:Interest
73.28 If a person or entity fails to remit a penalty payable under this Part to the Receiver General, the person or entity shall pay to the Receiver General interest on the amount of the penalty. The interest shall be calculated at the prescribed rate for the period beginning on the first day after the day on which the amount was required to be paid and ending on the day on which the amount is paid.
Marginal note:Garnishment
73.29 (1) If the Director is of the opinion that a person or entity is or is about to become liable to make a payment to a person or entity liable to pay a penalty or interest under this Part, the Director may, by written notice, require the first person or entity to pay without delay to the Receiver General, on account of the second person’s or entity’s liability, all or part of the money otherwise payable to the second person or entity.
Marginal note:Applicability to future payments
(2) If the Director requires an employer to pay to the Receiver General money otherwise payable to an employee as remuneration,
(a) the requirement is applicable to all future payments of remuneration until the liability is satisfied; and
(b) the employer shall pay to the Receiver General out of each payment of remuneration the amount that the Director stipulates in the notice.
Marginal note:Discharge of liability
(3) The receipt of the Director is a good and sufficient discharge of the original liability to the extent of the payment.
Marginal note:Write-off
73.3 (1) The Director may write off in whole or in part a penalty or interest payable by a person or entity under this Part.
Marginal note:Effect of write-off
(2) The writing off of a penalty or interest under this section does not affect any right of Her Majesty to collect or recover the penalty or interest.
General Provisions
Marginal note:Evidence
73.4 In a proceeding in respect of a violation or a prosecution for an offence, a notice of violation purporting to be issued under subsection 73.13(2), a notice of decision purporting to be issued under subsection 73.15(4) or 73.19(4), a notice of default purporting to be issued under subsection 73.18(1) or a certificate purporting to be made under subsection 73.26(1) is admissible in evidence without proof of the signature or official character of the person appearing to have signed it.
Marginal note:Time limit
73.5 (1) No proceedings in respect of a violation may be commenced later than two years after the subject-matter of the proceedings became known to the Centre.
Marginal note:Certificate of Centre
(2) A document appearing to have been issued by the Centre, certifying the day on which the subject-matter of any proceedings became known to the Centre, is admissible in evidence without proof of the signature or official character of the person appearing to have signed it and is, in the absence of evidence to the contrary, proof of the matter asserted in it.
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