Publication of Regulations: new obligations and funding model

[TaylorWarden]

On October 11, 2023, the Government of Canada published new Regulations in the Canada Gazette, Part II (Volume 157, Number 21) that will create new obligations for armoured cars and the mortgage sector, strengthen correspondent banking relationship requirements, and shift the funding of the Financial Transactions and Reports Analysis Centre of Canada’s (FINTRAC) compliance program from taxpayers to certain businesses and individuals subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated Regulations.

These changes support Canada’s efforts to combat money laundering and terrorist financing, and strengthen FINTRAC’s ability to help protect Canadians and Canada’s economy.

New obligations for armoured cars, the mortgage sector and stronger correspondent banking relationship requirements

The following sectors will have anti-money laundering and anti-terrorist financing obligations:

• As of July 2024: Businesses transporting currency and negotiable instruments.
• As of October 2024: Businesses and professionals involved in the mortgage sector, specifically mortgage administrators, brokers and lenders.

Starting in October 2024, financial entities entering into a correspondent banking relationship will also need to comply with additional requirements.

For more information on theses changes, consult: Modernization and upcoming changes impacting reporting entities. Additional information and resources will be communicated in advance of the coming-into-force dates to give businesses time to prepare to comply with new obligations.

Regulations for FINTRAC’s new assessment of expenses funding model

Starting on April 1, 2024, FINTRAC will charge the following businesses and individuals for the annual cost of its compliance program as part of its assessment of expenses funding model:

• banks (to which the Bank Act applies) and authorized foreign banks (as defined in section 2 of the Bank Act);
• trust and loan companies (to which the Trust and Loan Companies Act applies);
• life insurance companies (to which the Insurance Companies Act applies); and
• other businesses and individuals that submit 500 or more threshold transaction reports (such as casino disbursement reports, electronic funds transfer reports, large cash transaction reports, and large virtual currency transaction reports) to the Centre during a given fiscal year.

FINTRAC will contact and provide further detailed information to businesses and individuals who may be charged.

Information on the assessment of expenses funding model is available on FINTRAC’s website, including details on how the Centre will determine the amounts charged to certain businesses and individuals subject to the Act. Consult: Charging reporting entities for FINTRAC’s compliance program.