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Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (SOR/2002-184)

Regulations are current to 2022-06-20 and last amended on 2022-04-05. Previous Versions

PART 3Measures for Verifying Identity (continued)

  •  (1) A person or entity that is required to verify an entity’s identity in accordance with subsection 112(1) may rely on measures that were previously taken by another person or entity if

    • (a) the other person or entity is referred to in section 5 of the Act; or

    • (b) the other entity is affiliated with the one that is required to verify the entity’s identity or with another entity referred to in section 5 of the Act and carries out activities outside Canada that are similar to those of a person or entity that is referred to in any of paragraphs 5(a) to (g) of the Act.

  • (2) The person or entity that is required to verify an entity’s identity shall not rely on measures that were previously taken by an entity referred to in paragraph (1)(b) unless they are satisfied, after taking into account the risk of money laundering or terrorist activity financing offences in the foreign state in which that entity carries out the activities, that

    • (a) the entity applies policies that establish requirements similar to those in sections 6, 6.1 and 9.6 of the Act; and

    • (b) the entity’s compliance with those policies is subject to the supervision of a competent authority under the legislation of that foreign state.

  • (3) In order to rely, under subsection (1), on measures taken by another person or entity, the person or entity that is required to verify an entity’s identity shall

    • (a) as soon as feasible, obtain from the other person or entity the information that was confirmed as being that of the entity and be satisfied that the information is valid and current and that the other person or entity verified the entity’s identity in the manner described in subsection 112(1) or, if the measures were taken before the coming into force of this section, that the other person or entity confirmed the entity’s existence in accordance with these Regulations, as they read at the time the measures were taken; and

    • (b) have a written agreement or arrangement with the other person or entity that requires the other person or entity to provide them on request, as soon as feasible, with all of the information that the other person or entity referred to in order to verify the entity’s identity.

  •  (1) If a person or entity that is referred to in any of paragraphs 5(a) to (g) of the Act and that is required to verify an entity’s identity in accordance with subsection 112(1) considers, based on an assessment of the risk referred to in subsection 9.6(2) of the Act, that there is a low risk of a money laundering offence or terrorist activity financing offence, they are deemed to comply with subsection 112(1) if

    • (a) the entity whose identity is to be verified

      • (i) is an entity that is referred to in any of those paragraphs 5(a) to (g),

      • (ii) is a foreign entity that carries out activities that are similar to those of an entity that is referred to in any of those paragraphs,

      • (iii) administers a pension or investment fund that is regulated under the legislation of a foreign state and that either is created by a foreign government or is subject to the supervision of a competent authority under the legislation of that foreign state,

      • (iv) is one whose shares are traded on a Canadian stock exchange or a stock exchange designated under subsection 262(1) of the Income Tax Act,

      • (v) is a subsidiary of an entity that is referred to in any of subparagraphs (i) to (iv) or of a corporation that is referred to in any of subparagraphs 111(1)(a)(i) to (iv) and is one whose financial statements are consolidated with the financial statements of that entity or corporation,

      • (vi) is an institution or agency of the government of a foreign state, or

      • (vii) is a public service body, as defined in subsection 123(1) of the Excise Tax Act;

    • (b) within the applicable time referred to in one of paragraphs 112(3)(a) to (i), they are satisfied that the entity exists and that every person who deals with them on behalf of the entity is authorized by it to do so; and

    • (c) they keep a record that sets out the grounds for considering that there is a low risk of a money laundering offence or terrorist activity financing offence and the information obtained about the entity and the persons referred to in paragraph (b).

  • (2) If the person or entity subsequently considers, based on an assessment of the risk referred to in subsection 9.6(2) of the Act, that the risk of a money laundering offence or terrorist activity financing offence has increased and is no longer low, they shall verify the entity’s identity in accordance with subsection 112(1) as soon as feasible.

PART 4Requirements with Respect to Persons Referred to in Subsection 9.3(1) of the Act

Application of Parts 5 and 6

 The provisions of this Part are subject to the provisions of Parts 5 and 6.

Financial Entities

  •  (1) A financial entity shall take reasonable measures to determine whether

    • (a) 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:

      • (i) a person for whom it opens an account,

      • (ii) a person who is identified as an authorized user; and

    • (b) any of the following persons 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:

      • (i) a person who requests that it initiate an international electronic funds transfer of $100,000 or more,

      • (ii) a beneficiary for whom it finally receives an international electronic funds transfer of $100,000 or more,

      • (iii) a person who makes a payment of $100,000 or more to a prepaid payment product account,

      • (iv) a person who requests that it transfer virtual currency in an amount of $100,000 or more,

      • (v) a beneficiary for whom it receives virtual currency in an amount of $100,000 or more.

  • (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:

    • (a) a holder of an account;

    • (b) an authorized user.

  • (3) If a financial entity or any of its employees or officers detects a fact that constitutes reasonable grounds to suspect that a person referred to in paragraph (2)(a) or (b) 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 financial entity shall take reasonable measures to determine whether they are such a person.

Life Insurance Companies and Life Insurance Brokers or Agents

 A life insurance company or life insurance broker or agent shall take reasonable measures to determine whether either of the following persons 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:

  • (a) a person who makes a lump-sum payment of $100,000 or more in respect of an immediate or deferred annuity or a life insurance policy;

  • (b) a beneficiary to whom they are to remit an amount of $100,000 or more over the duration of an immediate or deferred annuity or a life insurance policy.

 Section 117 does not apply to a life insurance company or a life insurance broker or agent when they are dealing in reinsurance.

Securities Dealers

  •  (1) A securities dealer 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 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.

  • (3) If a securities dealer 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 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 securities dealer shall take reasonable measures to determine whether the account holder is such a person.

Money Services Businesses and Foreign Money Services Businesses

  •  (1) A money services business shall take reasonable measures to determine whether any of the following persons 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:

    • (a) a person who requests that the money services business initiate an international electronic funds transfer of $100,000 or more;

    • (b) a beneficiary for whom the money services business finally receives an international electronic funds transfer of $100,000 or more;

    • (c) a person who requests that the money services business transfer virtual currency in an amount of $100,000 or more;

    • (d) a beneficiary for whom the money services business receives virtual currency in an amount of $100,000 or more.

  • (2) A foreign money services business shall take reasonable measures to determine whether any of the following persons 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:

    • (a) a person who requests that the foreign money services business initiate an international electronic funds transfer of $100,000 or more in the course of providing services in Canada;

    • (b) a beneficiary for whom the foreign money services business finally receives an international electronic funds transfer of $100,000 or more in the course of providing services in Canada;

    • (c) a person who requests that the foreign money services business transfer virtual currency in an amount of $100,000 or more in the course of providing services in Canada;

    • (d) a beneficiary for whom the foreign money services business receives virtual currency in an amount of $100,000 or more in the course of providing services in Canada.

  • (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.

Other Businesses and Professions

  •  (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 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, 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

  •  (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.

 
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