Anti-money laundering and other illegal and unethical conduct

CPA Canada recognizes the threats posed by money laundering, terrorist financing, and other forms of illegal and unethical conduct to Canada’s economy, society and national reputation. We contribute to policy development in these areas.

The federal government and a parliamentary committee consulted during 2018 on potential policy and legislative changes and proposed regulations to improve Canada’s anti-money laundering and anti-terrorist financing (AML/ATF) regime.

As reporting entities with obligations under the AML/ATF regime, accountants and accounting firms are seeing changes to regulations in 2019 with some changes regarding identity verification immediately in effect and others which will be coming into effect in June 2020, or in some cases, in June 2021. Additionally, new requirements for federal corporations for beneficial ownership information came into force in June 2019.

A REVIEW OF CANADA’S AML/ATF REGIME

In February 2018, Finance Canada released a discussion paper seeking stakeholders’ views on how to improve the Canadian AML/ATF regime. Among other subjects, the paper sought views on corporate ownership transparency and mechanisms to improve timely access to beneficial ownership information by authorities while maintaining the ease of doing business in Canada.

CPA Canada submitted a response to the discussion paper providing input on several legislative and regulatory subjects. On improving the availability of beneficial ownership information, we support increased transparency but expressed the need for caution regarding the creation of new requirements and expectations that may be confusing or duplicative if beneficial ownership information could be leveraged from existing information streams already required by government, such as through the tax system.

In November 2018, the House Standing Committee on Finance completed its review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Among its recommendations, the committee recommended that the federal government work with the provinces and territories to create a pan-Canadian beneficial ownership registry, which would be accessible to certain law enforcement authorities and other public authorities.

The Advisory Committee on Money Laundering and Terrorist Financing holds meetings to discuss and address emerging issues and provide general advice on Canada’s AML/ATF policy. As a member of this committee, co-chaired and supported by Finance Canada, CPA Canada brings the important perspective of the accounting profession to the discussions and through its participation on both of the committee’s working groups.

In February 2019, the government tabled its response to the House Standing Committee on Finance review, indicating that it substantively agrees with the direction of the majority of the recommendations made in the parliamentary report. In addition to highlighting the actions already taken or underway, the government response mentions that “officials are working to address the Committee’s recommendations by developing forward policy and technical measures that could help shape or inform the Government’s longer-term approaches to anti-money laundering and anti-terrorist financing through coordinated horizontal action among the federal government departments and agencies that are part of Canada’s AML/ATF Regime.”

Additional legislative changes to strengthen the AML/ATF regime may result from the Finance Canada consultations in 2018 and the recommendations made by the House Standing Committee on Finance.

Beneficial ownership information changes in the Canada Business Corporations Act

The federal government passed legislation in 2018 that amends the Canada Business Corporations Act to require any federally-incorporated corporation that meets certain criteria to keep a register of information on beneficial ownership. This requirement came into force in June 2019. CPA Canada and the federal government teamed up to prepare for Canadian CPAs for changes to comply with requirements for new beneficial ownership registers; Corporations Canada has made a recording available for the information it presented to CPAs in Spring 2019.

Provinces and territories are expected to pass similar legislation applicable to provincially-incorporated companies, according to the federal-provincial-territorial agreement in December 2017 to strengthen beneficial ownership transparency. As of June 2019, the provinces of British Columbia and Manitoba had introduced provincial legislation. In June 2019, several provinces and territories joined with the federal government in issuing a joint statement which included a commitment towards consultations on public registries of beneficial ownership information.

CONSULTATIONS

  • CPA Canada submission to the Department of Finance Canada discussion paper, Reviewing Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime, May 2018