Money Laundering has always been the tool of choice for Organized Crime to “Clean” the proceeds they receive from their illegal activities. Legislation under the Proceeds of Crime Act and the Criminal Code of Canada has been enacted to address this activity. However, international terrorists have now turned to these same money laundering techniques to procure “legitimate” funds for their operations.

As a result in December, 2001, the Canadian Government revised the Proceeds of Crime Act to included terrorist activity and renamed the Act the Proceeds of Crime (Money Laundering) and Terrorist Financing. Act.

a)	to implement specific measures to detect and deter money laundering and the financing of terrorist activities and to facilitate the investigation and prosecution of money laundering offences and terrorist activity financing offences, including (S.C. 2001, c. 41, ss. 50(1))
	i.	establishing record keeping and client identification requirements for financial services providers and other persons or entities that engage in businesses, professions or activities that are susceptible to being used for money laundering or the financing of terrorist activities, (S.C. 2001, c. 41, ss. 50(1))
	ii.	requiring the reporting of suspicious financial transactions and of cross-border movements of currency and monetary instruments, and
	iii.	(iii) establishing an agency that is responsible for dealing with reported and other information;
b)	to respond to the threat posed by organized crime by providing law enforcement officials with the information they need to deprive criminals of the proceeds of their criminal activities, while ensuring that appropriate safeguards are put in place to protect the privacy of persons with respect to personal information about themselves; and
c)	to assist in fulfilling Canada 's international commitments to participate in the fight against transnational crime, particularly money laundering, and the fight against terrorist activity (S.C. 2001, c. 41, ss. 50(2)).

What’s New:

Money services businesses must register with FINTRAC by June 23, 2008.

The Globe & Mail:

OTTAWA , June 18, 2008 – All money services businesses will be required to register with FINTRAC by June 23, 2008. This registration requirement follows recent changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

This new requirement is part of a larger package of regulatory changes announced in June 2007 by Finance Minister Jim Flaherty to strengthen Canada ’s anti-money laundering and anti-terrorist financing regime (http://www.fin.gc.ca/news07/07-054e.html). The new regulations bring Canada ’s anti-money laundering and anti-terrorist financing regime in line with the international standards set by the Financial Action Task Force, a G-8 created body. The amendments also follow recommendations made in the 2004 Auditor General’s Report and in a 2004 Treasury Board–mandated evaluation of the regime.

Registering with FINTRAC will be necessary to operate such a business in Canada .

A money services business is an individual or an entity that is engaged in the business of any of the following activities:

• foreign exchange dealing;
• remitting or transmitting funds by any means or through any individual, entity or electronic funds transfer network; or
• issuing or redeeming money orders, traveller's cheques or other similar negotiable instruments. This does not include redeeming cheques payable to a named individual or entity. In other words, cashing cheques made out to a particular individual or entity is not included.

Customers of money services businesses should be aware that certain transactions will require them to provide information such as identification.

More information regarding the legal requirements for money services businesses can be found at http://www.fintrac-canafe.gc.ca/re-ed/msb-eng.asp

FINTRAC is an independent federal government agency with a mandate to detect, deter and prevent, money laundering, terrorist financing, and threats to the security of Canada . FINTRAC analyzes financial transaction reports and discloses financial intelligence to investigative agencies where it has reasonable grounds to suspect the information would be relevant to an investigation of money laundering, terrorist activity financing or threats to the security of Canada .

FINTRAC is part of Canada 's Anti-Money Laundering and Anti-Terrorist Activity Financing Initiative. The initiative is led by the Department of Finance and includes the RCMP, CSIS, Public Safety Canada, Canada Revenue Agency , Canada Border Services Agency, the Communications Security Establishment and the Department of Justice.

Who does this apply to?

That is the million dollar question. The amendments to the legislation place a huge onus on anyone dealing in money or financial services and require them to now maintain records in accordance with the Act.  

If you have any question as to the application of these new amendments to you or your company or employer, be sure to take the necessary steps to determine if these changes affect you. Failure to do so may result in charges against you personally under the Act or the Criminal Code of Canada.