This June, new federal regulations seeking to combat money laundering will come into effect, marking what Michele Wood-Tweel, CPA Canada’s vice-president of regulatory affairs, describes as important changes in evolving Canada’s regime to address new and current risks.
Coming five years after the international Financial Action Task Force found improvements were required to Canada’s approach to anti-money laundering and anti-terrorist financing, the new rules, Wood-Tweel says, will align various domestic standards with global ones in an effort to combat the movement of dirty money.
As the introduction to the new rules states, “The amendments to the regulations strengthen Canada’s AML/ATF Regime, align measures with international standards and level the playing field across reporting entities by applying stronger customer due diligence requirements and beneficial ownership requirements to designated non-financial businesses and professions (DNFBPs).”
We will be publishing an updated guide on complying with the “Proceeds of Crime (Money Laundering) and Terrorist Financing Act” and the revised rules. It will include what constitutes a “triggering” activity by an accountant or accounting firm and the related obligations under Canada’s anti-money laundering and terrorist financing regime.
The new beneficial ownership requirements in the regulations aren’t the only changes afoot in how Canada deals with transparency and ownership of assets. Wood-Tweel says CPAs will have to educate themselves about the new beneficial ownership rules that require most private companies under the Canada Business Corporations Act and in many provincial jurisdictions to create and maintain beneficial ownership registers. These changes will be directly relevant to CPAs who, for example, sit on private company boards or serve as CFOs, as well as those with private corporate clients.
“These changes related to beneficial ownership are entirely relevant to the work that our members do with private companies every day,” she says. “Members need to be aware of these developments and keep apprised of the changes that are coming down the track.”
Guidance from Canada’s AML/ATF regulator, FINTRAC, is available on many aspects of the new regulations which are effective on June 1, 2021, including:
FINTRAC understands that some reporting entities may experience certain challenges in meeting their obligations by June 1, 2021. In that regard, it has published a Notice on its website indicating that it will begin assessing compliance with the regulatory amendments on April 1, 2022 while also noting that FINTRAC may assess transactional information for a period prior to April 1, 2022 while exercising reasonability and taking into consideration previously communicated flexible measures.
Watch for more details in the coming weeks as we explore what these new regulations mean for CPAs.