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

Regulations are current to 2021-09-11 and last amended on 2021-06-01. Previous Versions

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

Required Measures (continued)

  •  (1) A person or entity that determines under subsection 120(3), (4) or (5) or 120.1(1), (2) or (4) that a person is a politically exposed foreign person or a family member — referred to in subsection 2(1) — of, or a person who is closely associated with, a politically exposed foreign person shall

    • (a) take reasonable measures to establish the source of the person’s wealth; and

    • (b) take the special measures referred to in section 157.

  • (2) A person or entity that determines under subsection 120.1(3) that a person is a politically exposed foreign person or a family member — referred to in subsection 2(1) — of, or a person who is closely associated with, a politically exposed foreign person shall

    • (a) take reasonable measures to establish the source of the funds or virtual currency used for the transaction and the source of the person’s wealth; and

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

  • (3) A person or entity shall also take the measures referred to in paragraphs (1)(a) and (b) if

    • (a) they determine under subsection 120(3), (4) or (5) or 120.1(1), (2) or (4) that a person is a politically exposed domestic person, a head of an international organization or a family member — referred to in subsection 2(1) — of one of those persons or they determine under subsection 120(5) or 120.1(4) that a person is closely associated with a politically exposed domestic person or a head of an international organization; and

    • (b) they consider, based on a risk assessment 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.

  • (4) A person or entity shall also take the measures referred to in paragraphs (2)(a) and (b) if

    • (a) they determine under subsection 120.1(3) that a person is a politically exposed domestic person, a head of an international organization or a family member — referred to in subsection 2(1) — of one of those persons or is a person who is closely associated with a politically exposed domestic person or a head of an international organization; and

    • (b) they consider, based on risk assessment 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) The person or entity shall take the reasonable measures referred to in subsections 120(3) and (5) and 120.1(1) and (4) — and, if applicable, shall take the measures referred to in paragraph (1)(a) — within 30 days after the day on which they enter into the business relationship or the fact is detected, as the case may be.

  • (6) The person or entity shall take the reasonable measures referred to in subsection 120.1(3) — and, if applicable, shall take the measures referred to in paragraphs (2)(a) and (b) — within 30 days after the day on which the transaction is conducted.

Requirements To Keep Records

  •  (1) If a financial entity, securities dealer or casino obtains approval under subsection 121(1) or (2) to keep an account open, they shall keep a record of

    • (a) the office or position and the organization or institution in respect of which the person is determined to be 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;

    • (b) the date of the determination;

    • (c) the source, if known, of the funds or virtual currency that is or is expected to be deposited into the account or of the funds or virtual currency that is or is expected to be paid to the prepaid payment product account;

    • (d) the source, if known, of the person’s wealth;

    • (e) the name of the member of senior management who gave the approval; and

    • (f) the date of that approval.

  • (2) If a transaction that is conducted with a financial entity, money services business, foreign money services business or casino is reviewed under any of subsections 122(1) to (3) and (5) to (7), the financial entity, money services business, foreign money services business or casino shall keep a record of

    • (a) the office or position and the organization or institution in respect of which the person is determined to be 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;

    • (b) the date of the determination;

    • (c) the source, if known, of the funds or virtual currency used for the transaction;

    • (d) the source, if known, of the person’s wealth;

    • (e) the name of the member of senior management who reviewed the transaction; and

    • (f) the date of that review.

  • (3) If a transaction that is conducted with a life insurance company or life insurance broker or agent is reviewed under any of subsections 122(1), (4), (5) and (8), the life insurance company or life insurance broker or agent shall keep a record of

    • (a) the office or position and the organization or institution in respect of which the person is determined to be 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;

    • (b) the date of the determination;

    • (c) the source, if known, of the funds or virtual currency used for a transaction referred to in paragraph 117(a) or of the funds or virtual currency that they receive from an annuitant of an immediate or deferred annuity or a holder of a life insurance policy referred to in paragraph 117(b);

    • (d) the source, if known, of the person’s wealth;

    • (e) the name of the member of senior management who reviewed the transaction; and

    • (f) the date of that review.

  • (4) If a person or entity takes any of the measures referred to in subsection 122.1(1) or (3), the person or entity shall keep a record of

    • (a) the office or position and the organization or institution in respect of which the person is determined to be 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;

    • (b) the date of the determination; and

    • (c) the source, if known, of the person’s wealth.

  • (5) If a transaction that is conducted with a person or entity is reviewed under subsection 122.1(2) or (4), the person or entity shall keep a record of

    • (a) the office or position and the organization or institution in respect of which the person is determined to be 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;

    • (b) the date of the determination;

    • (c) the source, if known, of the funds or virtual currency used for the transaction;

    • (d) the source, if known, of the person’s wealth;

    • (e) the name of the member of senior management who reviewed the transaction; and

    • (f) the date of that review.

PART 5General Provisions

Ongoing Monitoring

 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.

 
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