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

Regulations are current to 2019-06-20 and last amended on 2017-06-17. Previous Versions

Due Diligence Measures with Respect to Persons Referred to in Subsection 9.3(1) of the Act (continued)

[SOR/2016-153, s. 75]
  •  (1) A financial entity, life insurance company, life insurance broker or agent or money services business that determines under paragraph 54.2(1)(b), section 56.1 or paragraph 59(5)(a) that a person is a politically exposed foreign person or a family member of, or person who is closely associated with, such a person shall

    • (a) take reasonable measures to establish the source of the funds that have been used for the transaction; and

    • (b) ensure that a member of senior management reviews the transaction.

  • (2) A financial entity, life insurance company, life insurance broker or agent or money services business shall also take the measures referred to in paragraphs (1)(a) and (b) if they determine under paragraph 54.2(1)(b), section 56.1 or paragraph 59(5)(a) that a person is a politically exposed domestic person, a head of an international organization or a family member of, or person who is closely associated with, one of those persons and they consider, based on an assessment of the risk 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.

  • (3) A financial entity or money services business that determines under paragraph 54.2(1)(c) or 59(5)(b) that a person is a politically exposed foreign person or a family member of, or person who is closely associated with, such a person shall ensure that a member of senior management reviews the transaction.

  • (4) A financial entity or money services business shall also take the measure referred to in subsection (3) if they determine under paragraph 54.2(1)(c) or 59(5)(b) that a person is a politically exposed domestic person, a head of an international organization or a family member of, or person who is closely associated with, one of those persons and they consider, based on an assessment of the risk 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) A financial entity, life insurance company, life insurance broker or agent or money services business shall take the reasonable measures referred to in paragraphs 54.2(1)(b) and (c), section 56.1 and paragraphs 59(5)(a) and (b) — and, if applicable, shall take the measures referred to in paragraphs (1)(a) and (b) or that referred to in subsection (3), as the case may be — within 30 days after the day on which the transaction occurs.

  • SOR/2007-122, s. 66
  • SOR/2016-153, s. 77

Reasonable Measures

 If the reasonable measures taken by a person or entity under paragraph 9.5(b) of the Act or under subsection 8(1), 9(1) or 10(1), paragraph 11.1(4)(a) or 14.1(d), subsection 15.1(3), 39(5), 42(3) or (4) or 44(1), paragraph 50(1)(e), subsection 52(1) or (3) or 53.1(1), any of paragraphs 54.2(1)(a) to (c), subsection 54.2(2) or (3), paragraph 55.1(b), section 55.2, 56.1 or 57.1, paragraph 59(5)(a) or (b), subsection 59.2(3), paragraph 67.1(1)(a), subsection 67.1(2), paragraph 67.2(1)(a) or subsection 67.2(2) are unsuccessful, the person or entity shall keep a record that sets out the measures taken, the date on which each measure was taken, and the reasons why the measures were unsuccessful.

  • SOR/2016-153, s. 77

Retention of Records

 If a record is required to be kept under these Regulations, the record or a copy of it may be kept in a machine-readable or electronic form if a paper copy can be readily produced from it.

  • SOR/2016-153, s. 78
  •  (1) Subject to subsection (2), every person or entity that is required to obtain, keep or create records under these Regulations shall retain those records for a period of at least five years following

    • (a) in respect of signature cards, account operating agreements, account application forms, credit card applications and records setting out the intended use of the account, the day on which the account to which they relate is closed;

    • (a.1) in respect of records that are required to be kept under paragraph 14(i) or (n), 14.1(g) or 23(f), the day on which the account to which they relate is closed;

    • (b) in respect of client information records, certificates of corporate status, records that are required to be filed annually under the applicable provincial securities legislation or other similar records that ascertain the existence of a corporation, and records that ascertain the existence of an entity, other than a corporation, including partnership agreements and articles of association, the day on which the last business transaction is conducted;

    • (b.1) in respect of records that are required to be kept under section 11.1, paragraph 14(o), subsection 15.1(2) or section 20.1 or 31, lists that are required to be kept under section 32 and records, other than client information records, that are required to be kept under that section, the day on which the last business transaction is conducted; and

    • (c) in respect of all other records, the day on which they were created.

  • (2) Where records that an individual keeps under these Regulations are the property of the individual’s employer or a person or entity with which the individual is in a contractual relationship, the individual is not required to retain the records after the end of the individual’s employment or contractual relationship.

  • SOR/2008-195, s. 4
  • SOR/2016-153, s. 79

 Every record that is required to be kept under these Regulations shall be retained in such a way that it can be provided to an authorized person within 30 days after a request is made to examine it under section 62 of the Act.

Compliance

  •  (1) For the purpose of subsection 9.6(1) of the Act, a person or entity referred to in that subsection shall, as applicable, implement the compliance program referred to in that subsection by

    • (a) appointing a person — who, where the compliance program is being implemented by a person, may be that person — who is to be responsible for the implementation of the program;

    • (b) developing and applying written compliance policies and procedures that are kept up to date and, in the case of an entity, are approved by a senior officer;

    • (c) assessing and documenting, in a manner that is appropriate for the person or entity, the risk referred to in subsection 9.6(2) of the Act, taking into consideration

      • (i) the person’s or entity’s clients and business relationships,

      • (ii) the person’s or entity’s products and delivery channels,

      • (iii) the geographic location of the person’s or entity’s activities,

      • (iii.1) any new developments in respect of, or the impact of new technologies on, the person’s or entity’s clients, business relationships, products or delivery channels or the geographic location of their activities,

      • (iii.2) in the case of an entity that is referred to in any of paragraphs 5(a) to (g) of the Act, any risk resulting from the activities of an entity that is affiliated with it and that is referred to in any of those paragraphs or from the activities of a foreign entity that is affiliated with it and that carries out activities that are similar to those of entities referred to in any of those paragraphs, and

      • (iv) any other relevant factor;

    • (d) if the person or entity has employees, agents or mandataries or other persons authorized to act on their behalf, developing and maintaining a written, ongoing compliance training program for those employees, agents or mandataries or other persons; and

    • (e) instituting and documenting a review of the policies and procedures, the risk assessment and the training program for the purpose of testing their effectiveness, which review is required to be carried out every two years by an internal or external auditor of the person or entity, or by the person or entity if they do not have such an auditor.

  • (2) For the purposes of the compliance program referred to in subsection 9.6(1) of the Act, every entity referred to in that subsection shall report the following in written form to a senior officer within 30 days after the assessment:

    • (a) the findings of the review referred to in paragraph (1)(e);

    • (b) any updates made to the policies and procedures within the reporting period; and

    • (c) the status of the implementation of the updates to those policies and procedures.

  • SOR/2007-122, s. 67
  • SOR/2016-153, s. 80

 The prescribed special measures that are required to be taken by a person or entity referred to in subsection 9.6(1) of the Act for the purpose of subsection 9.6(3) of the Act are the development and application of written policies and procedures for

  • (a) taking enhanced measures based on the risk assessment undertaken in accordance with subsection 9.6(2) of the Act to ascertain the identity of any person or confirm the existence of any entity in addition to the measures required in sections 54, 54.1, 55, 56, 57, 59 and 59.1, subsection 59.2(1), section 59.3, subsection 59.4(1) and sections 59.5, 60 and 61; and

  • (b) taking any other enhanced measure to mitigate the risks identified in accordance with subsection 9.6(3) of the Act, including,

    • (i) keeping client identification information and the information referred to in section 11.1 up to date, and

    • (ii) in addition to the measures required in sections 54.3, 56.3, 57.2, 59.01, 59.11, 59.21, 59.31, 59.41, 59.51, 60.1 and 61.1, conducting ongoing monitoring of business relationships for the purpose of detecting transactions that are required to be reported to the Centre under section 7 of the Act.

  • (c) [Repealed, SOR/2013-15, s. 18]

  • SOR/2007-122, s. 67
  • SOR/2013-15, s. 18
 
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