New anti-money laundering and anti-terrorist financing (AML/ATF) requirements came into force on June 1, 2021. According to CPA Canada, the amendments to the AML/ATF legislation have significant implications for the updating of compliance programs with changes to rules about “know your client” (KYC), beneficial ownership information, politically exposed persons (PEP) and heads of international organizations, record-keeping, reporting of large virtual currency transactions, among other requirements.
Key implications are:
- The issuance and publication of an administrative monetary penalty (AMP) for a violation of the AML/ATF requirements, increasing the risk and consequences of non-compliance. FINTRAC has the authority to impose an AMP when it finds non-compliance with the AML/ATF legislation.
- The change to section 462.31 of the Criminal Code now lowers the threshold of accountant involvement. Law enforcement and prosecutors can pursue money-laundering charges because of the addition of a “recklessness” provision to the definition of money laundering.
- Exposure to risk for accountants and accounting firms becomes greater if there is failure to meet due diligence standards.
These amendments will mean that all Compliance Departments, Accountants and Financial Institutions will need to adjust their Compliance strategies to reassess their effectiveness in light of these changes. The article Risky business: Non-compliance with anti-money laundering requirements (cpacanada.ca) advises that “the stakes for accountants and accounting firms are now higher in ensuring that they know their clients, conduct proper risk assessments, and implement and maintain an effective compliance program to prevent being misused by those with criminal pursuits and to limit the risks of running afoul of the Criminal Code’s new money laundering provision”.
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