PROCESSING...
We recently sought clarification from the Autorité des marchés financiers (AMF), Québec’s provincial regulator, on when money services businesses (MSBs) need to be licensed in Québec. The Québec licensing process is completely separate from the federal MSB registration with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). The full text of the response that we received appears below this blog entry.
When many of us think of money laundering, it involves large well organised criminal organizations, like the mafia or large drug cartels. We think of elaborate schemes, with money funnelled through many layers and across international borders, numbered bank accounts off shore accounts hiding millions. While these things do happen, money laundering also happens on a much smaller scale with much less elaborate plots. Since money laundering is something that is done to hide the proceeds of crime, it can relate to any amount of money that someone do not want to be traceable back to them (because that money was obtained through illegal means). The more easily something is passed from person to person anonymously, the more easily it can be used for money laundering. High value items can be used to launder money, as they can be bought or sold on secondary markets. Because jewellery can have a high value and be passed from person, it is a potential vehicle for money laundering. Jewellers in Canada and in the USA are required to report certain transactions, and the consequences for failing to do so can be severe.
Canadian reporting entities are required to conduct and document an effectiveness review at least every two years. This review must consider the completeness and effectiveness of the anti money laundering (AML) and anti-terrorist financing (ATF) compliance program and include operational testing (testing what the organization is actually doing). For larger institutions, this is generally done as part of audit related testing. For federally regulated financial institutions (banks, trust companies, insurance companies, etc.) there is a requirement for the testing to be independent. For smaller companies that aren’t designated as federally regulated financial institutions, effectiveness reviews may be performed by staff members, consultants or by another organization. Deciding who should perform the review and what to spend can be challenging. No matter which option you choose for your business, your reviewer should be qualified and the final report should be comprehensive and signed-off by your management team within 30 days of the date that you receive the final version.
Having worked for a couple of consulting firms, it occurs to me that there are things that everyone should consider while negotiating a consulting contract. The hefty disclaimer: I’m not a lawyer, and this shouldn’t be construed as legal advice. Outlier is a consulting company, but I’ve worked to build a model that’s different from the status quo. I’m not saying that we’re perfect, or that it doesn’t pay to shop around (in fact, I encourage it and will happily provide names and contact information for other companies that do the same type of work that we do). I am saying that it pays to be informed, and to ask the right questions before you sign an agreement. This is my “top 10 list” to help you negotiate your consulting agreements.
Read more on Negotiate Your Consulting Contracts Like a Pro…
For many reporting entities, a growing concern has become obtaining and maintaining banking relationships. Most, if not all, businesses need a banking relationship to survive and prosper. If you are an individual in Canada, you are entitled to basic banking services, but it is not so for businesses. Banks and other financial service providers choose the business customers that they will serve. This means that the stakes can be very high for businesses shopping for a banking relationship.
I’ve met a lot of Compliance Officers from around the world, and not one of them has ever told me that as a child they wanted to be a Compliance Officer. This isn’t to say that the job isn’t interesting (or even an awful lot of fun sometimes), but that we get here in different ways. One of my favourites (who will remain nameless here) is a gentleman who missed a senior management meeting and was nominated as the organization’s Compliance Officer while he was absent. When we first met, he was feeling overwhelmed and was looking for a review of his company’s compliance program (and assurances that he wouldn’t wind up in an orange jumpsuit if he made a mistake).
