In-house counsel must take measures to uplift their policies: Osler lawyer
Substantial regulatory amendments came into play on June 1, changing or creating new obligations for reporting entities that are subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
Aiming to prevent unauthorized transactions, the amendments include new virtual currency obligations for all reporting entities and new definitions under the PCMLTFA. They also include recordkeeping and reporting changes for all reporting entities, and obligations for foreign money services businesses. The amendments introduce new requirements for all reporting entities to take reasonable measures to confirm the accuracy of information regarding beneficial ownership.
These amendments are the latest development in a series of ongoing changes that have been made to the PCMLTFA and its regulations since 2019.
“It really is an overhaul of a lot of the day-to-day compliance requirements,” says Elizabeth Sale, partner at Osler, Hoskin & Harcourt LLP, and co-author of a client guide explaining and analysing the latest changes. “A detailed look is required by counsel to ensure that companies have appropriately uplifted their policies, if they are in fact affected by this legislation.”
In-house counsel should take the opportunity to review their policies and procedures and training requirements, and ensure they are reporting properly to remain in compliance with the amended legislation, Sale says. There is a grace period for certain obligations, which will allow time to update policies, although this grace period does not apply to new virtual currency-related obligations, which are being rigorously enforced as of June 1.
“It’s an issue of ensuring that companies are aware of their obligations and that they are doing that uplift because entities that have a smaller presence may not have the same strong cultural compliance that you would expect at a larger organization,” says Sale. “It’s important to make sure that you have a robust compliance program and that it’s appropriately understood throughout the organization at the right levels.”
The Financial Transactions and Reports Analysis Centre of Canada issued new guidance in key areas earlier this year, to allow entities subject to reporting obligations time to review their new anti-money laundering compliance obligations in anticipation of the June 1 date. All reporting entities will be required to keep a “large virtual currency transaction record” for amounts received in virtual currency of C$10,000 or more in a single transaction, or across multiple virtual currency transactions that total $10,000 or more within a span of 24 hours.