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

PART 5General Provisions

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.

Electronic Funds Transfers

• 124 (1) For the purposes of section 9.5 of the Act, the prescribed persons or entities are the financial entities, money services businesses, foreign money services businesses and casinos that are required to keep a record under these Regulations in respect of an electronic funds transfer.

• (2) For the purposes of section 9.5 of the Act, the prescribed electronic funds transfers are

  • (a) electronic funds transfers, as defined in subsection 1(2), that are SWIFT MT-103 messages or their equivalent; and

  • (b) international electronic funds transfers other than, in respect of financial entities and casinos, those carried out by means of a credit or debit card or a prepaid payment product if the beneficiary has an agreement with the payment service provider that permits payment by that means for the provision of goods and services.

• (3) For the purposes of paragraph 9.5(a) of the Act, the prescribed information is

  • (a) the beneficiary’s name and address; and

  • (b) if applicable, the account number or other reference number, if any, of the beneficiary.

• (4) Every person or entity referred in subsection (1) must develop and apply written risk-based policies and procedures for determining, in the case of an electronic funds transfer received by them that, despite reasonable measures taken under paragraph 9.5(b) of the Act, does not have included with it any of the information required under paragraph 9.5(a) of the Act, whether they should suspend or reject the electronic funds transfer and any follow-up measures to be taken.

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.

Foreign Currency or Virtual Currency

125 If a transaction is conducted in a foreign currency or virtual currency, the amount of the transaction shall be converted into Canadian dollars using

• (a) the exchange rate that is published by the Bank of Canada for that foreign currency or virtual currency and that is in effect at the time of the transaction; or

• (b) if no exchange rate is published by the Bank of Canada for that foreign currency or virtual currency, the exchange rate that the person or entity would use in the ordinary course of business at the time of the transaction.

Transactions That Are Deemed To Be Single

126 If a person or entity that is required under these Regulations to report the receipt from a person or entity of an amount in cash or to keep a large cash transaction record receives amounts in cash that total $10,000 or more in two or more transactions that are made within 24 consecutive hours, those transactions are deemed to be a single transaction of $10,000 or more if that person or entity knows that

• (a) the transactions are conducted by the same person or entity;

• (b) the transactions are conducted on behalf of the same person or entity; or

• (c) the amounts are for the same beneficiary.

• 127 (1) If a person or entity that is required to report the initiation of an international electronic funds transfer under these Regulations initiates two or more international electronic funds transfers that total $10,000 or more within 24 consecutive hours, those transactions are deemed to be a single transaction of $10,000 or more if that person or entity knows that

  • (a) the electronic funds transfers are initiated at the request of the same person or entity;

  • (b) the requests are made on behalf of the same person or entity; or

  • (c) the amounts are for the same beneficiary.

• (2) Paragraphs (1)(a) and (b) do not apply if the requests to initiate the electronic funds transfers are made by or on behalf of

  • (a) a public body;

  • (b) a corporation or trust that has minimum net assets of $75 million on its last audited balance sheet, whose shares or units are traded on a Canadian stock exchange or a stock exchange designated under subsection 262(1) of the Income Tax Act and that operates in a country that is a member of the Financial Action Task Force; or

  • (c) an administrator of a pension fund that is regulated under federal or provincial legislation.

• 128 (1) If a person or entity that is required to report the final receipt of an electronic funds transfer under these Regulations finally receives two or more electronic funds transfers that total $10,000 or more within 24 consecutive hours, those transactions are deemed to be a single transaction of $10,000 or more if that person or entity knows that

  • (a) the electronic funds transfers are initiated at the request of the same person or entity; or

  • (b) the amounts are for the same beneficiary.

• (2) Paragraph (1)(b) does not apply if the beneficiary is

  • (a) a public body;

  • (b) a corporation or trust that has minimum net assets of $75 million on its last audited balance sheet, whose shares or units are traded on a Canadian stock exchange or a stock exchange designated under subsection 262(1) of the Income Tax Act and that operates in a country that is a member of the Financial Action Task Force; or

  • (c) an administrator of a pension fund that is regulated under federal or provincial legislation.

• 129 (1) If a person or entity that is required under these Regulations to report the receipt from a person or entity of an amount in virtual currency or to keep a large virtual currency transaction record receives amounts in virtual currency that total $10,000 or more in two or more transactions that are made within 24 consecutive hours, those transactions are deemed to be a single transaction of $10,000 or more if that person or entity knows that

  • (a) the transactions are conducted by the same person or entity;

  • (b) the transactions are conducted on behalf of the same person or entity; or

  • (c) the amounts are for the same beneficiary.

• (2) Paragraph (1)(c) does not apply if the beneficiary is

  • (a) a public body;

  • (b) a corporation or trust that has minimum net assets of $75 million on its last audited balance sheet, whose shares or units are traded on a Canadian stock exchange or a stock exchange designated under subsection 262(1) of the Income Tax Act and that operates in a country that is a member of the Financial Action Task Force; or

  • (c) an administrator of a pension fund that is regulated under federal or provincial legislation.

130 If, within 24 consecutive hours, a casino makes two or more disbursements that total $10,000 or more in any of the transactions referred to in paragraphs 71(a) to (h), those disbursements are deemed to be a single disbursement of $10,000 or more if the casino knows that

• (a) the disbursements are requested by the same person or entity;

• (b) the disbursements are received by the same person or entity;

• (c) the disbursements are requested on behalf of the same person or entity; or

• (d) the disbursements are received on behalf of the same person or entity.

Reports

• 131 (1) A report that is required to be made to the Centre under these Regulations shall be sent electronically in accordance with guidelines that are prepared by the Centre, if the sender has the technical capabilities to do so.

• (2) The report shall be sent in paper format in accordance with guidelines that are prepared by the Centre, if the sender does not have the technical capabilities to send the report electronically.

• (3) For greater certainty, although items in Schedules 1 to 6 are described in the singular, a person or entity shall report all known information that falls within an item.

• 132 (1) A report that is required to be made under these Regulations in respect of an electronic funds transfer shall be sent to the Centre within five working days after the day on which the person or entity initiates or finally receives the electronic funds transfer, as the case may be.

• (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.

• (3) A report that is required to be made under these Regulations in respect of a receipt of an amount in cash or in respect of a disbursement referred to in section 71 shall be sent to the Centre within 15 days after the day on which the person or entity receives the amount or makes the disbursement, as the case may be.

Transactions Conducted by Employees and Authorized Persons and Entities

• 133 (1) For greater certainty, if a person who is subject to these Regulations is an employee of a person or entity referred to in any of paragraphs 5(a) to (l) of the Act, it is the employer rather than the employee that is responsible for complying with these Regulations.

• (2) For greater certainty, if a person or entity that is subject to these Regulations, other than a life insurance broker or agent, is authorized to act on behalf of another person or entity referred to in any of paragraphs 5(a) to (l) of the Act in any capacity, including as an agent or mandatary, it is that other person or entity rather than the authorized person or entity that is responsible for complying with these Regulations.

Third-Party Determination

• 134 (1) A person or entity that is required under these Regulations to report the receipt from a person or entity of an amount of $10,000 or more in cash or in virtual currency or to keep a large cash transaction record or a large virtual currency transaction record shall, when they receive the amount in cash or virtual currency, take reasonable measures to determine whether the person from whom the cash or virtual currency is received is acting on behalf of a third party.

• (2) If the person or entity determines that the person from whom the cash or virtual currency is received is acting on behalf of a third party, the person or entity shall take reasonable measures to obtain the following information and shall keep a record of the information obtained:

  • (a) if the third party is a person, their name, address and date of birth and the nature of their principal business or their occupation;

  • (b) if the third party is an entity, its name and address, the nature of its principal business, its registration or incorporation number and the jurisdiction and country of issue of that number; and

  • (c) the relationship between the third party and the person from whom the cash or virtual currency is received.

• (3) If the person or entity is not able to determine whether the person from whom the cash or virtual currency is received is acting on behalf of a third party but there are reasonable grounds to suspect that they are, the person or entity shall keep a record that

  • (a) indicates whether, according to the person from whom the cash or virtual currency is received, they are acting on their own behalf only; and

  • (b) describes the reasonable grounds to suspect that they are acting on behalf of a third party.

• (4) Despite subsection (2), a person or entity that receives the cash or virtual currency from a person or entity referred to in subparagraph 5(h)(ii.1) or (h.1)(ii.1) of the Act and determines that the person or entity is acting on behalf of a third party shall, when they receive the cash or virtual currency, obtain the information referred to in subsection (2) from that person or entity and shall keep a record of that information.

• 135 (1) A person or entity that is required under these Regulations to keep a signature card or an account operating agreement shall, when they open the account, take reasonable measures to determine whether the account will be used by or on behalf of a third party.

• (2) If the person or entity determines that the account will be used by or on behalf of a third party, the person or entity shall take reasonable measures to obtain the following information and shall keep a record of the information obtained:

  • (a) if the third party is a person, their name, address, telephone number and date of birth and the nature of their principal business or their occupation;

  • (b) if the third party is an entity, its name, address and telephone number, the nature of its principal business, its registration or incorporation number and the jurisdiction and country of issue of that number; and

  • (c) the relationship between the third party and each account holder.

• (3) If the person or entity is not able to determine whether the account will be used by or on behalf of a third party but there are reasonable grounds to suspect that it will, the person or entity shall keep a record that

  • (a) indicates whether, according to a person who is authorized to act in respect of the account, the account will only be used by or on behalf of an account holder; and

  • (b) describes the reasonable grounds to suspect that the account will be used by or on behalf of a third party.

• (4) Subsection (1) does not apply if every account holder is a financial entity or a securities dealer that is engaged in the business of dealing in securities in Canada.

• (4.1) [Repealed, SOR/2019-240, s. 24]

• (5) Subsection (2) does not apply if a securities dealer is required to keep an account operating agreement in respect of an account of a person or entity that is engaged in the business of dealing in securities only outside Canada and

  • (a) the account is in a country that is a member of the Financial Action Task Force;

  • (b) the account is in a country that is not a member of the Financial Action Task Force but has implemented the Financial Action Task Force’s recommendations relating to client identification and, when the account is opened, the securities dealer has obtained written assurance from the account holder that the country has implemented those recommendations; or

  • (c) the account is in a country that is not a member of the Financial Action Task Force and has not implemented the Financial Action Task Force’s recommendations relating to client identification but, when the account is opened, the securities dealer has verified the identity of all third parties in accordance with subsection 105(1), 109(1) or 112(1).

• (6) Subsection (2) does not apply where

  • (a) the account is opened by a legal counsel, an accountant or a real estate broker or sales representative; and

  • (b) the person or entity has reasonable grounds to believe that the account is to be used only for clients of the legal counsel, accountant or real estate broker or sales representative, as the case may be.