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Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations

Version of section 9 from 2007-06-30 to 2008-06-22:

  •  (1) Subject to subsection (4), every person or entity that is required to keep a signature card or an account operating agreement in respect of an account under these Regulations, or would be required to do so if not for subsection 23(2), shall, at the time that the account is opened, take reasonable measures to determine whether the account is to be used by or on behalf of a third party.

  • (2) Subject to subsections (5) and (6), where the person or entity determines that the account is to be used by or on behalf of a third party, the person or entity shall keep a record that sets out

    • (a) the third party’s name and address and the nature of the principal business or occupation of the third party, if the third party is an individual;

    • (b) if the third party is an entity, the third party’s name and address and the nature of the principal business of the third party, and, if the entity is a corporation, the entity’s incorporation number and its place of issue; and

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

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

    • (a) indicates whether, according to the individual who is authorized to act in respect of the account, the account is to be used by or on behalf of a third party; and

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

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

  • (5) Subsection (2) does not apply where 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 of Canada, or would be required to do so if not for subsection 23(2), and where

    • (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 Task Force referred to in paragraph (a) but has implemented the recommendations of the Task Force relating to customer identification and, at the time that the account is opened, the securities dealer has obtained written assurance from the entity where the account is located that the country has implemented those recommendations; or

    • (c) the account is in a country that is not a member of the Task Force referred to in paragraph (a) and has not implemented the recommendations of the Task Force relating to customer identification but, at the time that the account is opened, the securities dealer has ascertained the identity of all third parties relating to the account as described in paragraph 64(1)(c).

  • (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.

  • SOR/2007-122, s. 23
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