The Canadian Financial Transaction and Reporting Analysis Centre (FINTRAC) is the financial intelligence unit of Canada, which was established in 2000. It is an independent body that reports to the Minister of Finance and is responsible for the parliamentary activity centre. Headquartered in Ottawa. It is mainly responsible for collecting, analyzing, evaluating and disclosing relevant information of Canadian financial industry in order to protect the financial stability and security of Canada. Similar to CFTC in the United States. FINTRAC accepts financial institutions and intermediaries to collect, analyze, evaluate and disclose relevant information about the Canadian financial industry in order to protect the financial stability and security of Canada.
Foreign exchange transactions, transfer business, cashing or selling bills of exchange, traveler's cheques, etc.
Monetary Service Business (MSB) needs to understand all the obligations applicable to the business. This includes business registered with FINTRAC, reporting to FINTRAC, record keeping, KYC and compliance planning.
Establishing and implementing a comprehensive and effective compliance plan is the basis for meeting all your reporting, record keeping, customer identification and customer requirements under PCMLTFA and related regulations.
Compliance plans have five essential elements.
1. Appoint the Compliance Officer who is responsible for implementing the Compliance Plan.
2. Develop and apply up-to-date written compliance policies and procedures, including enhanced measures to mitigate high risks;
3. A risk assessment of your business activities and relationships;
4. Develop and maintain a written continuous compliance training plan for employees, agents and other personnel who have the right to act on your behalf;
5. To test its overall effectiveness, review your compliance plans (policies and procedures, risk assessment and training plans) every two years (minimum).
Written compliance policies and procedures must be developed and applied by all individuals and entities subject to PCMLTFA and related regulations. This is an important part of your overall compliance plan, as it will guide your decisions and actions in fulfilling your legal obligations.
Your compliance policies and procedures must be:
1. Written form should be in a form/format accessible to the target audience.
2. Keep up to date (a number of factors may trigger the need for updates, such as legislative changes, irregularities, new services or products, or two-year effectiveness reviews);
3. If you are an entity, it will be approved by a senior official.
Risk assessment is an analysis of potential risks and vulnerabilities that may expose your business to ML/TF activities. This assessment will allow you to identify your inherent risks and will help you and those authorized to act on your behalf to develop mitigation measures to address these risks.
Handbooks have been developed for accountants, British Columbia notaries, credit unions/people's rallies, dealers in precious metals and gems, life insurance companies, brokers and agents, foreign exchange dealers, real estate and securities dealers.
The complexity of risk assessment depends on business scale and risk factors. However, you must consider the following matters:
1. Your customers and business relationships, including their activity patterns and geographic locations;
2. The products, services and delivery channels you provide;
3. The geographical location of your activities;
4. New technologies and their impact on your customers, business relationships and product or delivery channels of your activities;
5. Other relevant factors affecting your business (e.g. employee mobility, industry rules and regulations, etc.);
6. If you are a financial entity, a life insurance company or a securities dealer, you may be exposed to risks arising from the activities of affiliates governed by PCMLTFA and related regulations, or the risk department of a foreign affiliate that performs similar activities.