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

PART 2Requirement To Verify Identity

Application of Parts 5 and 6

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

Persons and Entities Required To Keep Large Cash Transaction Record or Large Virtual Currency Transaction Record

84 A person or entity shall verify, in accordance with section 105, 109 or 112, the identity of a person or entity from which they receive an amount

• (a) in respect of which they are required to keep a large cash transaction record under these Regulations, unless the amount is received as a deposit made into a business account or a deposit made by means of an automated banking machine; or

• (b) in respect of which they are required to keep a large virtual currency transaction record under these Regulations.

Suspicious Transactions

• 85 (1) A person or entity that is subject to these Regulations shall take reasonable measures to verify, in accordance with section 105, 109 or 112, the identity of a person or entity that conducts or attempts to conduct a transaction with them that is required to be reported to the Centre under section 7 of the Act.

• (2) If the person or entity believes that taking the reasonable measures would inform the person or entity that conducts or attempts to conduct a transaction with them that the transaction and related information will be reported under section 7 of the Act, they are not required to comply with subsection (1).

Financial Entities

86 A financial entity shall

• (a) in accordance with section 105, verify the identity of

  • (i) a person for whom it opens an account, other than a credit card account or a prepaid payment product account,

  • (ii) a person, other than an account holder, who is authorized to give instructions in respect of an account, other than a credit card account or a prepaid payment product account, and

  • (iii) a person – other than one referred to in subparagraph (i) or (ii) — who

    • (A) requests that it issue or redeem money orders, traveller’s cheques or similar negotiable instruments in an amount of $3,000 or more,

    • (B) requests that it initiate an international electronic funds transfer — or any other electronic funds transfer that is a SWIFT MT-103 message or its equivalent — of $1,000 or more,

    • (C) requests that it exchange an amount of $3,000 or more in a foreign currency exchange transaction,

    • (D) requests that it transfer an amount of $1,000 or more in virtual currency,

    • (E) requests that it exchange an amount of $1,000 or more in a virtual currency exchange transaction, or

    • (F) is the beneficiary of an international electronic funds transfer of $1,000 or more, or of a transfer of an amount of $1,000 or more in virtual currency, to whom it makes the remittance;

• (b) in accordance with section 109, verify the identity of a corporation for which it opens an account, other than a credit card account or a prepaid payment product account; and

• (c) in accordance with section 112, verify the identity of an entity, other than a corporation, for which it opens an account, other than a credit card account or a prepaid payment product account.

87 A financial entity shall

• (a) in accordance with section 105, verify the identity of a person for whom it opens a credit card account;

• (b) in accordance with section 109, verify the identity of a corporation for which it opens a credit card account; and

• (c) in accordance with section 112, verify the identity of an entity, other than a corporation, for which it opens a credit card account.

88 A financial entity shall

• (a) in accordance with section 105, verify the identity of

  • (i) a person for whom it opens a prepaid payment product account,

  • (ii) an authorized user, and

  • (iii) any other person who makes a payment of $1,000 or more to a prepaid payment product account;

• (b) in accordance with section 109, verify the identity of

  • (i) a corporation for which it opens a prepaid payment product account, and

  • (ii) any other corporation that makes a payment of $1,000 or more to a prepaid payment product account; and

• (c) in accordance with section 112, verify the identity of

  • (i) an entity, other than a corporation, for which it opens a prepaid payment product account, and

  • (ii) any other entity, other than a corporation, that makes a payment of $1,000 or more to a prepaid payment product account.

89 A trust company shall also

• (a) in accordance with section 105, verify the identity of a person who is the settlor of an inter vivos trust in respect of which it is required to keep a record under subsection 15(1);

• (b) in accordance with section 109, verify the identity of a corporation that is the settlor of an institutional trust in respect of which it is required to keep a record under subsection 15(1);

• (c) in accordance with section 112, verify the identity of an entity, other than a corporation, that is the settlor of an institutional trust in respect of which it is required to keep a record under subsection 15(1);

• (d) in accordance with section 105, verify the identity of a person who is authorized to act as a co-trustee of a trust; and

• (e) if an entity is authorized to act as a co-trustee of a trust,

  • (i) in accordance with section 105, verify the identity of all persons — up to three — who are authorized to give instructions with respect to the entity’s activities as co-trustee, and

  • (ii) in accordance with section 109 or 112, verify the identity of the entity.

90 A financial entity that enters into a correspondent banking relationship

• (a) shall ascertain the name and address of the foreign financial institution by examining a copy of the foreign financial institution’s banking licence, banking charter, authorization or certification to operate issued by the competent authority under the legislation of the jurisdiction in which the foreign financial institution was incorporated, of its certificate of incorporation or of a similar document;

• (b) shall take reasonable measures to

  • (i) ascertain, based on information that is accessible to the public, whether any civil or criminal penalties have been imposed on the foreign financial institution in respect of anti-money laundering or anti-terrorist financing requirements and, if such a penalty has been imposed, shall monitor all transactions conducted in the context of the correspondent banking relationship to detect any transactions that are required to be reported to the Centre under section 7 of the Act,

  • (ii) assess, based on information that is accessible to the public, the reputation of the foreign financial institution with respect to its compliance with anti-money laundering and anti-terrorist financing requirements, and

  • (iii) assess, based on information that is accessible to the public, the quality of the anti-money laundering and anti-terrorist financing supervision of the jurisdiction in which the foreign financial institution was incorporated and the jurisdiction in which it conducts transactions in the context of the correspondent banking relationship; and

• (c) shall take reasonable measures to determine the nature of the clientele and markets served by the foreign financial institution.

91 If a client of a foreign financial institution has direct access to services provided by the financial entity under a correspondent banking relationship, the financial entity shall take reasonable measures to ascertain whether the foreign financial institution

• (a) has, in respect of its clients that have direct access to the accounts of the financial entity, met requirements that are consistent with the requirements of section 86; and

• (b) has agreed to provide relevant client identification information on request to the financial entity.

Life Insurance Companies and Life Insurance Brokers or Agents

92 A life insurance company or life insurance broker or agent shall

• (a) in accordance with section 105, verify the identity of a person in respect of whom they are required to keep an information record under section 22;

• (b) in accordance with section 109, verify the identity of a corporation in respect of which they are required to keep an information record under section 22; and

• (c) in accordance with section 112, verify the identity of an entity, other than a corporation, in respect of which they are required to keep an information record under section 22.

93 Section 92 does not apply to a life insurance company or a life insurance broker or agent when they are dealing in reinsurance.

Securities Dealers

94 A securities dealer shall

• (a) in accordance with section 105, verify the identity of a person for whom they open an account and every other person who is authorized to give instructions in respect of the account;

• (b) in accordance with section 109, verify the identity of a corporation for which they open an account; and

• (c) in accordance with section 112, verify the identity of an entity, other than a corporation, for which they open an account.

Money Services Businesses and Foreign Money Services Businesses

• 95 (1) A money services business — or a foreign money services business in connection with services that they provide in Canada — shall, in accordance with section 105, verify the identity of a person who

  • (a) requests that they issue or redeem money orders, traveller’s cheques or similar negotiable instruments in an amount of $3,000 or more;

  • (a.1) requests that they transmit an amount of $1,000 or more in funds, other than in the case of an electronic funds transfer;

  • (b) requests that they initiate an electronic funds transfer of $1,000 or more;

  • (c) requests that they exchange an amount of $3,000 or more in a foreign currency exchange transaction;

  • (c.1) requests that they transport an amount of $1,000 or more in cash or virtual currency within the meaning of paragraph (b) of the definition of that term in subsection 1(2) or an amount of $3,000 or more in money orders, traveller’s cheques or other similar negotiable instruments;

  • (d) requests that they transfer an amount of $1,000 or more in virtual currency;

  • (e) requests that they exchange an amount of $1,000 or more in a virtual currency exchange transaction;

  • (e.1) is a beneficiary of an amount of $1,000 or more in funds, to whom they make the remittance, other than in the case of an electronic funds transfer;

  • (f) is a beneficiary of an international electronic funds transfer of $1,000 or more, or of a transfer of an amount of $1,000 or more in virtual currency, to whom they make the remittance;

  • (g) is a person in respect of whom they are required to keep an information record under paragraph 36.1(a); or

  • (h) donates an amount of $1,000 or more in funds or virtual currency using a crowdfunding platform that is provided and maintained by the money services business or foreign money services business.

• (2) Paragraphs (1)(a) to (e) do not apply if an employee who is authorized to order transactions under an agreement referred to in section 37 conducts the transaction on behalf of their employer under the agreement.

• (3) A money services business — or foreign money services business in connection with services that they provide in Canada — shall, in accordance with section 109, verify the identity of a corporation

  • (a) that requests that they transport an amount of $1,000 or more in cash or virtual currency within the meaning of paragraph (b) of the definition of that term in subsection 1(2) or an amount of $3,000 or more in money orders, traveller’s cheques or other similar negotiable instruments;

  • (a.1) in respect of which they are required to keep an information record under paragraph 36.1(a);

  • (b) in respect of which they are required to keep an information record under section 37; or

  • (c) that donates an amount of $1,000 or more in funds or virtual currency using a crowdfunding platform that is provided and maintained by the money services business or foreign money services business.

• (4) A money services business — or foreign money services business in connection with services that they provide in Canada — shall, in accordance with section 112, verify the identity of an entity, other than a corporation,

  • (a) that requests that they transport an amount of $1,000 or more in cash or virtual currency within the meaning of paragraph (b) of the definition of that term in subsection 1(2) or an amount of $3,000 or more in money orders, traveller’s cheques or other similar negotiable instruments;

  • (a.1) in respect of which they are required to keep an information record under paragraph 36.1(a);

  • (b) in respect of which they are required to keep an information record under section 37; or

  • (c) that donates an amount of $1,000 or more in funds or virtual currency using a crowdfunding platform that is provided and maintained by the money services business or foreign money services business.

• (5) Subsections (3) and (4) do not apply if the entity 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) a subsidiary of a public body referred to in paragraph (a) or a corporation or trust referred to in paragraph (b), whose financial statements are consolidated with the financial statements of the public body, corporation or trust.