money laundering | Outlier Solutions - Part 4 Outlier Solutions

FINTRAC has published updated indicators related to terrorist activity financing.

These are subdivided into three broad types of violent extremism:

religiously motivated violent extremism (RMVE),
politically motivated violent extremism (PMVE), and
ideologically motivated violent extremism (IMVE).

Each subtype has distinct characteristics and indicators. While it can be tempting to think that these types of things don’t happen here, unfortunately, they can and do happen here in Canada. As a Compliance Officer, it’s important to think through where these indicators might be visible to you and your team.

All Canadian reporting entities must use this information to:

Update the indicators in training materials,
Update the indicators in policies and procedures, and
Update transaction monitoring mechanisms (where applicable) to detect relevant indicators.

Of course, if you require assistance, Outlier Compliance is here to help, please contact us

As a company that gets to work with a lot of startups, and existing companies entering the Canadian market, we get to help folks understand the regulatory landscape in Canada. One of the required elements of a Canadian compliance program is an AML Compliance Effectiveness Review. These reviews must be completed every two years at a minimum. You can think of it like an audit, but for compliance.

The purpose of an effectiveness review is to determine whether your AML compliance program has gaps or weaknesses that may prevent your business from effectively preventing, detecting and deterring money laundering and terrorist financing. Recently, we have seen an increased focus on Effectiveness Reviews during FINTRAC examinations. Specifically, on whether the review really tested the effectiveness of the compliance program as a whole (not just what you say you’re doing, but also what you’re actually doing). This has led to FINTRAC examiners requesting the working papers for completed effectiveness reviews where the report did not clearly describe how the effectiveness was tested and assessed. This is the main reason Outlier has started providing our working papers with the final report. This also provides a pretty good reference point for making sure you are meeting your regulatory expectations.

First Time for Everything

In previous engagements, Outlier has operated on the theory that the clock for when your first review was due stemmed from the MSB’s FINTRAC registration date. However, we were incorrect. It wasn’t until a recent conversation where the registration date preceded any customer transactions by six months, that really spurred on an official clarification from the regulator. The trigger for the 2-year clock to start ticking is not registration but “a registered MSB is required to create a compliance program once it engages in one or more of the MSB-related activities.” This means that the clock starts ticking after the MSB has conducted their first transaction.

Here is a PDF version of the policy interpretation we received from FINTRAC that you can keep for your records.

Potential Corrections

If we have completed a review for you in the past that has a commencement date prior to your first customer transaction, please feel free to reach out so we can amend your report to the proper date.

Upcoming Effectiveness Reviews

While this article talks about your first review, you must also be sure to initiate all subsequent reviews within 2 years of the start date of your previous review. Please note that this is based on the previous commencement date, not the date of completion or issuance of the final report.

Need a Hand?

If you are looking for an idea of pricing for an upcoming review or have questions about a review that is currently underway, please feel free to contact us.

If you had told me ten years ago that I would be in the longest-running position in the history of my career, I wouldn’t have believed you. Back then, I was unhappy for various reasons, and while I had started to think about what I really wanted from my work life, I had yet to take some of the big steps to get there. I won’t go into the gory details of where I was or the situations that weren’t working for me. Suffice it to say that there was a lot that wasn’t working, and I didn’t know how to fix it… but I had some ideas.

If you’re sitting in a spot, like I was then, perhaps feeling a bit despairing and lost despite what many might consider your own success, this post is for you. It’s been written as a love letter, from the woman that I am today to the woman that I was then… Whether today you’re solving problems like a champion, just putting one foot in front of the other, or sitting on the couch thinking that you may want to get up – it’s all part of the journey.

Give yourself permission to name the things that you really want

Once, a former mentor (Lin, a founder of CU Training, now retired) literally gave me permission to take notes with coloured markers. The notes included cartoons of key points. I love to draw. It’s a great memory aid, but it’s something that I saw as being “unprofessional” and had trained myself out of…

This conversation got me thinking – what else hadn’t I given myself permission to write (or draw)? Were there things that I wasn’t giving words to?

Of course, there were.

In fact, there were a whole lot of things that I had been afraid, for one reason or another, to think too deeply about, let alone describe. So many of these things related to what I really wanted from life.

Write it down

This led to a trip to a shop in Victoria, BC, where I bought a beautiful notebook that I didn’t write anything in for a while. It would become the place where I wrote down what I wanted in life. This is the page from that book for “work.”

When I put pen to paper in this book, the rules are simple. I don’t beat myself up about what’s not working in my current state. I have a good think about what I really want, and I write it down. Whether it seems improbable or downright impossible, I write it down.

Looking back at this page, written over a year before my company, Outlier Compliance Group was a conscious thought, I can see its beginnings here.

Keep writing

I look back at and add to the old pages, building on the ideas there. It makes me smile to see where I’ve grown into myself and accomplished things that I thought impossible. I add new pages to the book.

It’s easier now to give myself permission to write than it was at first, but it’s still not easy! That’s okay. I think that’s part of how I know that I’m still growing and pushing myself.

Be open to opportunity

In the last decade, I’ve worked with amazing companies and entrepreneurs. I’ve consulted governments and NGOs. I’ve taught classes and presented at conferences around the world. I’ve made the type of career decisions and personal investments that have set me up to be secure in a way that I would have found unfathomable. Some of the people that I admire most in the world have become mentors and friends.

Sometimes, I think about where I was at various points in my life: living in poverty, in the foster care system, in very unhealthy work environments, and I wish that I could reach back into the past and let that version of me see the me that I am today… to let that version of me know that all of the hard work that I was doing would prepare me for opportunities that I wouldn’t have dared to dream of then.

The best part is that, eventually, success can become a virtuous cycle. The more opportunity I seize, the more seems to flow my way, and the more I am prepared to tackle… and the more that I am able to help others to help themselves along the way!

Take enough risk to get knocked down

This is not to say that it’s easy to seize opportunities, or that I don’t get knocked down from time to time. I do, and it’s not fun!

When something knocks me down, I try to remember that this is the price of “stepping into the ring.” Sometimes, I’ll get knocked down.

This is part of the risk-return curve; there’s no success without risk.

Get back up and do it again

Once, an interviewer presented me with a big list of leadership characteristics and asked me what the most important was to me. After reading the list, I asked if I could add another word to the list. That word is relentlessness, and I stand by it.

This is not to say that I keep doing the same thing over and over and expecting a different result, but rather that I learn, adjust tactics and pursue my goals with ardour.

If you can’t find it, build it

I think that everyone close to me had a sense that I would do something entrepreneurial long before I did. I was always looking for novel ways to solve problems, no matter the environment that I was in. This has become the number one question that I ask entrepreneurs that come to me for advice – what problem are you solving?

It’s important from a business perspective, as well as from a personal satisfaction perspective. When we understand what we’re doing and why, we all tend to be more motivated and focused.

Find your tribe

I am grateful every day for the incredible people in my life. I grew up feeling like an outsider, and I had to a large extent, accepted that this is the way I would always feel (and I was ok with that). It takes me by surprise sometimes to realize that I don’t feel that way anymore. I spend most of my waking hours solving problems and socializing with people that I love, respect and admire. Even when we’re dealing with difficult or stressful situations, I am still grateful for my friends, colleagues and clients every day.

The caveat here is that there are only 24 hours in a day. Each hour that you spend with the wrong folks is a missed opportunity to spend time with the right folks. Choose wisely!

Forgive yourself

This is something that I am still learning, and maybe I will be forever… When I make mistakes, I take it hard. I can hold a grudge for a very long time, and while I think that’s healthy in some cases, I shouldn’t be holding a grudge against myself. Making mistakes is part of learning and growing, and I need to be honest, forgive myself and get to learning rather than dwelling.

The idea that there are only 24 hours in a day is important here too. Time spent beating oneself up is not time well spent.

Effective June 1, 2020, dealers in Virtual Currency activities were considered as Money Services Businesses (MSBs) and as such, must comply with MSB obligations under amendments made to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). One obligation is to have an AML effectiveness review at least once every two years. MSBs must start their effectiveness review no later than two years from the start of their previous review or in the case of dealers in Virtual Currency, no later than June 1, 2022, the date they were considered to be MSBs under law.

Such reviews must test your compliance program and effectiveness of your operations. Our reviews follow a similar format to examinations conducted by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), which you can read more about in a previous Blog Post.

Background

On April 27, 2022 amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations were published in the Canada Gazette. To make reading these changes a little easier, we (thanks Rodney) have created a redlined version of the regulations, with new content showing as tracked changes, which can be found here.

The Regulatory Impact Statement for these changes state the following:

Crowdfunding platforms and some payment service providers are not currently covered by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Act) and therefore have no money laundering and terrorist financing obligations under federal statute. This lack of oversight presents a serious and immediate risk to the security of Canadians and to the Canadian economy. This risk was highlighted in early 2022, when illegal blockades took place across Canada that were financed, in part, through crowdfunding platforms and payment service providers. Allowing these gaps to continue represents a risk to the integrity and stability of the financial sector and the broader economy, as well as a reputational risk for Canada.

Amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, and consequential amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations, will help prevent the financing of illegal activities through these types of financial services.

What’s Changed?

The changes are substantial and sudden. They will affect many companies that have not been previously under the purview of AML regulation in Canada. These changes are effective immediately and there is no comment period, which is not the norm for such changes.

To help digest these changes, we have summarized what we feel are the most important changes below:

The definition for an electronic funds transfer has been removed and the corresponding section within the body of the regulations was amended. Previous exemptions related to remitting or transmitting from one person or entity to another by Credit or Debit Card, or Prepaid Payment Product if the beneficiary has an agreement with the payment service provider that permits payment for the provision of goods and services, has been revoked for money services businesses, which as we mentioned now includes Payment Service Providers.

The definitions section was amended by adding the following:

crowdfunding platform means a website or an application or other software that is used to raise funds or virtual currency through donations. (plateforme de sociofinancement)
crowdfunding platform services means the provision and maintenance of a crowdfunding platform for use by other persons or entities to raise funds or virtual currency for themselves or for persons or entities specified by them.

With these changes, crowdfunding platforms and payment service providers will now be subject to existing money services businesses requirements. These obligations include:

Registration with FINTRAC;
Developing a compliance program;
Customer identification and due diligence;
Transaction monitoring and customer risk scoring;
Reporting certain transactions to regulators and government agencies;
Complying with Ministerial Directives; and
Keeping records.

Specific to record keeping, crowdfunding platforms that provide services to persons or entities in Canada where a person donates an amount of CAD 1,000 or more in funds or virtual currency will need to:

(a) keep an information record in respect of the person or entity to which they provide those services;

(b) keep a record of the purpose for which the funds or virtual currency are being raised; and

(c) if the person or entity for which the funds or virtual currency are being raised is different from the person or entity referred to in paragraph (a),

1. 1. keep a record of their name, and
  2. take reasonable measures to obtain their address, the nature of their principal business or their occupation and, in the case of a person, their date of birth, and keep a record of the information obtained.

What Next?

Due to these changes, FINTRAC will need to revise its interpretation of existing requirements to include crowdfunding platforms and payment service providers. There is no set date for when we can expect guidance from FINTRAC. Additionally, various FINTRAC policy interpretations will no longer be able to be relied upon (i.e. policy interpretations related to merchant services as well as payment processing for utility bills, mortgage and rent, payroll, and tuition being exempt from AML obligations). The hope is FINTRAC will issue new policy interpretations, but for now the industry is left with many questions.

Discombobulated

About a year ago, we had a client who was interacting with the world of Anti-Money Laundering (AML) and Anti-Terrorist Financing (ATF) for the first time. They were aggravated by the amount of jargon, acronyms, and uncommon uses of certain commonly understood terms. An example is, a business relationship. Those of you that are relatively familiar with the AML space know a business relationship doesn’t mean what the rest of the world thinks it means. In Canada, in the AML context, it means something very different.

A Helping Hand

At the time, they wished for a simple reference point where they could easily find the meaning for different terms. Unfortunately, this entails combing multiple locations, including FINTRAC’s website, plus the Act and Regulations themselves. To make a long story short, there is no easy way. Fed up, they (not so) gently suggested that we (Outlier) fix this. Their idea was creating a GitHub repository.

For those unfamiliar with GitHub, it is a web-based hosting service for version control. It is mostly used for computer code, but has also been used to write and edit books. It offers access control and several collaboration features. A GitHub repository is where the code and/or information is maintained for a specific project. This process is fairly simple to someone who is a coder with years of experience working with GitHub. For myself, this was not so simple. A year later, almost to the day, the repository is created, open and available to the public. There is no need to be scared, you are able to comment and make suggestions without knowing how to code at all. If you can’t figure out how to provide commentary in GitHub, send it to use via email at info@outliercanada.com with the subject line “GitHub Feedback.”

The Power of Collaboration

The (not so) gentle nudge meshed well with one of Outlier’s core beliefs: that information should be free. By collecting the information, housing it in GitHub, and making it available to anyone, we are able to provide free information to everyone who wants it. By making information free and public, it gives others the opportunity to make suggestions, add content, and improve the quality of the information.

What Happens When We Work Together?

By sharing this open-source project with the world, we are looking to empower anyone willing to be empowered. From the client who is interacting with the world of AML for the first time. To the seasoned-veteran who is looking for helpful resources. To the person who wants to provide their customer with a helpful resource. Take the information and do what you wish with it. If you would like to attribute Outlier, awesome! If not, that’s ok too. Our only request is this should never be provided for a fee.

Have a Question?

If you looked at the resource and are curious about how to make a contribution, please feel free to contact us anytime. Contributions can include anything from corrections and suggestions, to the addition of different jurisdictional definitions, specifically the European perspective.

This is not a solicitation (but we do get this request often), should you want to provide a tip in BTC or ETH, our addresses are listed below.

To open a channel with our Lightning Node, our address is: 03acb418d5b88c0009cf07d31ec53d0486814bc77917c352bd7e952520edf7bf3c@99.236.76.38:9735

or you can use Tippin.Me.

bitcoin	ethereum
3AqYJQhfKYCde7syKKqTJJPdLs6M5CbWkR	0x03CDF23a2Eb070F2c79De5B2E6FB90671D3c70fE

Quick Overview

On April 11th, 2019, FINTRAC published an Operational Alert issued in part with the Canadian Anti-Fraud Centre. The information provided related to laundering the proceeds of romance scams and mass marketing fraud. The publication provided an explanation of what constitutes a romance scam, some common indicators that may be present and transaction patterns or flow of funds that may suggest fraud.

What Does it Mean?

The suspicious indicators provided by FINTRAC list circumstances or activities that might signal potential cases of individuals caught in a romance scam or the subject of a mass marketing fraud. This does not mean that if one or more of the indicators are present that the transaction is definitely suspicious and must be reported to FINTRAC. It is meant to ensure that you are aware of the potential that suspicious activity may be taking place. In that context, if you are involved in customer’s transactions, whether on the front lines or in back office, you must be aware of the indicators in the alert. If you do encounter a transaction that may be considered unusual, you should attempt to collect additional information that will aid in the Compliance Officer’s decision to report it or clearly document why it was not considered suspicious. Where the Compliance Officer makes the decision to report the transaction to FINTRAC as suspicious, be sure to include “Project CHAMELEON” or “#CHAMELEON” in Part G—Description of suspicious activity in the STR. This will help to facilitate FINTRAC’s disclosure process.

What Now?

In order to ensure familiarity for anyone who interacts with customers and their transactions, the list of FINTRAC’s indicators should be included in your ongoing AML compliance training program. Furthermore, the indicators should also be included in your procedure manuals, allowing easy access to the information. Finally, the indicators should be incorporated into your Risk Assessment documentation. Specifically, when determining customer risk and the controls used to effectively mitigate potential risks.

We’ve made it easier for you to integrate this content into your program by putting the indicators in a Word document for you.

Need a Hand?

Outlier has taken the list of indicators provided by FINTRAC and formatted them into an easy to use Microsoft Word document, which can be found here. This should allow companies to easily update their documentation and ensure they are sufficiently monitoring for potential instances of romance scams or mass marketing fraud. If you aren’t sure what to do with this information and would like some assistance, please feel free to contact us.

Here We Go Again! Canada’s Proposed AML Changes for Real Estate Developers, Brokers and Sales Representatives

On June 9^th, 2018, draft amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its enacted regulations (there are five separate regulations that we’re going to collectively call regulations here for simplicity’s sake). This article is intended to give a high-level summary of the proposed amendments as they relate to the real estate industry.

This article should not be considered advice (legal, tax or otherwise). That said, any of the content shared here may be used and shared freely – you don’t need our permission. While we’d love for content that we’ve written to be attributed to us, we believe that it’s more important to get reliable information into the hands of community members (meaning that if you punk content that we wrote, we may think you’re a jerk but we’re not sending an army of lawyers).

Finally, we want to encourage the community to discuss the proposed changes and submit meaningful feedback for policy makers. The comment period for this draft is 90 days. After this, the Department of Finance takes the feedback to the bat cave and drafts a final version of the amendments. From the time that the final version is published, the draft indicates that there will be 12 months of transition to comply with the new requirements.

What does this mean for my business?

While there are quite a number of proposed changes (the draft is about 200 pages in length), some are likely to have more of an impact on for real estate developers, brokers and sales representatives than others. We’ve summarized the changes that we expect to have the most impact below. Remember these are just proposed changes so there is no need to update your compliance material just yet.

What’s New?

Virtual Currency:

While there are not many proposed amendments that will introduce new requirements for real estate developers, brokers and sales representatives the draft regulations introduce reporting requirements for the receipt of CAD 10,000 or more of virtual currency. These basically are the same as large cash reporting obligations and will require reporting entities to maintain a large virtual currency transaction record.

The requirements for reporting and recordkeeping for virtual currency will be very similar to cash reporting requirements.

What existing requirements are changing?

24-hour rule:

The draft regulations clarify that multiple transactions performed by or on behalf of the same customer or entity within a 24-hour period are considered a single transaction for reporting purposes when they total CAD 10,000 or more. Only one report would need to be submitted to capture all transactions that aggregate to CAD 10,000 or more. For real estate developers, brokers and sales representatives this would apply to recipient of cash deposits. Specifically, this will apply to large cash transactions or CAD 10,000 or more.

Identification:

The draft regulations replace the word “original” with “authentic” and states that a document used for verification of identity must be “authentic, valid and current. This would allow for scanned copies of documentation and/or for software that can authenticate identification documents to be used for the dual process method for real estate developers, brokers and sales representatives that identify clients in a non-face-to-face manner. Another change, related to measures for verifying identity, is that the word “verify” has been replaced with “confirm” and “ascertain” has been replaced with confirm. What this will mean exactly is still unclear (FINTRAC will need to provide more guidance once the final amendments are released). We are hopeful that it will allow for easier customer identification – especially for customers outside of Canada.

Records:

There have been some changes to the details that must be recorded in records that real estate broker or sales representative must maintain. In particular, the draft regulations add the requirement that information records must contain details of every person or entity for which they act as an agent or mandatary in respect of the purchase or sale of real property. Under the existing regulations information related to the person or entity purchasing real estate only.

Risk Assessment:

Under current regulations, reporting entities are required to assess the risks associated with its business and develop a risk assessment specific to your situation. For real estate developers, brokers and sales representatives a risk assessment must address the following four areas:

Products, services, and delivery channels (to better reflect the reality of the real estate sector, this workbook will now only refer to services and delivery channels);
Geography;
Clients and business relationships; and
Other relevant factors

A proposed amendment would require all reporting entities to assess the risk related the use of new technologies, before they are implemented. This has been a best practice since the requirement to conduct a risk assessment came into force, but this change would make this a formal requirement.

Suspicious Transaction Reporting:

Under current regulations if a reporting entity has reasonable grounds to suspect that a transaction or attempted transaction is related to money laundering or terrorist financing, a report must be submitted to FINTRAC within 30 days of the date that a fact was discovered that caused the suspicion. The revised regulations add to this requirement by stating:

“The person or entity shall send the report to the Centre within three days after the day on which measures taken by them enable them to establish that there are reasonable grounds to suspect that the transaction or attempted transaction is related to the commission of a money laundering offence or a terrorist activity financing offence.

This would require reports to be submitted to FINTRAC within three days after the reporting entity conducts an analysis that established reasonable grounds for suspicion.

Schedules:

The draft regulations introduce changes to reporting schedules, requiring more detailed information to be filed with FINTRAC then previously was required. This is in addition to including information that is marked as optional, if a reporting entity has the information. As it relates real estate developers, brokers and sales representatives these changes will impact attempted suspicious and suspicious transaction reporting, terrorist property reporting and large cash reporting. Some of the additional proposed data fields are:

every reference number that is connected to the transaction,
every other known detail that identifies the receipt (of cash for large cash transactions),
type of device used by person who makes request online,
number that identifies device,
internet protocol address (IP address) used by device,
person’s user name, and
date and time of person’s online session in which request is made.

Such changes may be onerous for reporting entities, especially for transactions that are conducted online.

Training:

Under current regulation, if real estate developers, brokers and sales representatives use agents, mandataries or other persons to act on their behalf, they must develop and maintain a written, ongoing compliance training program for those agents, mandataries or other persons. The draft regulations introduces an additional requirement in which there must be a documented plan for the ongoing compliance training program and delivering of that the training.

What’s Next?

If you’ve read this far, congratulations and thank you!

We hope that you will contribute your thoughts and comments. You can do this by contacting the Department of Finance directly. Their representative on this file is:

Lynn Hemmings
Acting Director General
Financial Systems Division
Financial Sector Policy Branch
Department of Finance
90 Elgin Street
Ottawa, Ontario
K1A 0G5
Email: fin.fc-cf.fin@canada.ca

If you would like assistance drafting a submission, or have questions that you would like Outlier to answer, please get in touch!

Quick Overview

A little over a month ago, FINTRAC published an operational brief for the Canadian real estate industry. The brief was intended to assist reporting entities in meeting the obligations to report suspicious transactions or attempted suspicious transactions that related to potential money laundering or terrorist financing. The publication provided some common indicators that may be present in a transaction that suggest money laundering or terrorist financing could be involved.

What Does it Mean?

The suspicious indicators provided by FINTRAC list circumstances or activities that might signal potentially illicit activity. This does not mean that if one or more of the indicators are present that the transaction is definitely suspicious and must be reported to FINTRAC, it is meant to ensure that you are aware of the potential that suspicious activity may be taking place. In that context, if you are involved in real estate transactions, you must be aware of the indicators in the brief. If you do encounter a transaction that may be considered suspicious, you will need to collect additional information that will aid in your decision to report it or document why it was not considered suspicious.

What Now?

We’ve made it easier for you to integrate this content into your program by putting the indicators in a Word document for you.

Need a Hand?

Outlier has taken the list of indicators provided by FINTRAC and formatted them into an easy to use Microsoft Word document, which can be downloaded here: FINTRAC Indicators Specific to Real Estate Transactions. This should allow companies within the real estate sector to easily update their documentation and ensure they are sufficiently monitoring for potentially suspicious activity. If you aren’t sure what to do with this information and would like some assistance, please feel free to contact us.

On November 14^th, 2016 FINTRAC released a brief for all reporting entities who may be involved in real estate transactions. The briefing is intended as guidance to provide some examples of indicators that may be present in transactions that may suggest they are linked to money laundering or terrorist financing. The indicators described have been taken from transactions suspected of being related to money laundering or terrorist financing reported internationally. The briefing focuses on the potential risks and vulnerabilities within the real estate industry and provides suggestions on how to ensure reporting entities are sufficiently meeting suspicious transaction reporting obligations.

The briefing is meant to provide operational guidance given the small overall number of suspicious transactions that have been reported to FINTRAC by the Real Estate industry. The briefing states that these indicators will be used by FINTRAC to assess compliance with your reporting obligations. If you are a reporting entity that interacts with the real estate industry in one form or another, the indicators and scenarios outlined in this brief should be considered when updating your Risk Assessment and training materials.

To put things into perspective, though the actual size of the real estate market is difficult to determine precisely, CMHC has produced some statistics. CMHC suggests that between 2003 and 2013 over $9 trillion of mortgage credits were negotiated and roughly 5 million sales took place through Multiple Listing Services (MLS). In contrast, FINTRAC received only 127 Suspicious Transactions Reports (STRs) from real estate brokers, agents and developers and 152 by other types of reporting entities, such as banks and trust/loan companies. To go a step further, in FINTRAC’s 2015 Annual Report, between April 1, 2014 and March 31, 2015, a total of 92,531 STRs were filed across all reporting entities.

This evidence supports FINTRAC’s assertion that operational guidance for the real estate industry is needed.

The indicators and examples covered in the brief outline numerous scenarios that may suggest that a transaction is related to a money laundering or terrorist financing offense. It also speaks to how the appearance of legitimacy obfuscates the clarity of suspicious transactions and requires more than a just “gut feel”. What is required is the consideration of the facts related to the transaction and their context. Does the transaction with all the known factors, positive or negative, make sense?

What This Means to Your Business?

First off, FINTRAC will be using the indicators provided to assess your compliance with reporting obligations. This has a couple different applications. The first being, does your AML compliance program documentation make reference to the suspicious indicators that are provided. Basically, are staff aware of the elements that may be present in a transaction that would suggest money laundering or terrorist financing may be occurring?

Secondly, is there an oversight process to ensure if there are transactions that contain one or more of these indicators where an STR was not submitted, is reviewed? If so, does the process ensure supporting evidence that the Compliance Officer reviewed the transaction and determined there were not reasonable grounds to suspect its relation to money laundering or terrorist financing? When you encounter a transaction involving any of the indicators provided, it is very important that you collect as much information as possible to assist the Compliance Officer with their determination of whether there are reasonable grounds to suspect that a transaction, or attempted transaction, may be related to money laundering or terrorist financing. Alternatively, even if none of the indicators provided by FINTRAC are present but we still feel there is “something off” about our customer’s transaction, speak with your Compliance Officer. They will be able to provide some insight on additional information that may assist our decision. Once you have collected any additional information you may still not feel comfortable, but this does not mean you cannot complete the transaction, but that you must be sure your Compliance Officer is provided with all the information, which includes our reason for the escalation, so that they can decide whether there are reasonable grounds to suspect it may be related to a money laundering or terrorist financing offense. The Compliance Officer will document their decision and, if necessary, submit an STR to FINTRAC.

Need a Hand?

If you are a reporting entity that interacts with the real estate industry and would like assistance updating your AML compliance program documentation or simply have some questions, please contact us.

New Terrorist Financing Indicators

First AML Compliance Effectiveness Review Timing

First Time for Everything

Potential Corrections

Upcoming Effectiveness Reviews

Need a Hand?

9 Years of Entrepreneurship

Give yourself permission to name the things that you really want

Write it down

Keep writing

Be open to opportunity

Take enough risk to get knocked down

Get back up and do it again

If you can’t find it, build it

Find your tribe

Forgive yourself

Effectiveness Reviews for Dealers in Virtual Currency

We’re Here To Help

Amendments To The Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations – 2022

Background

What’s Changed?

What Next?

We’re Here To Help

Information Should Be Free!

Discombobulated

A Helping Hand

The Power of Collaboration

What Happens When We Work Together?

Have a Question?

FINTRAC Alert – Laundering the Proceeds of a Romance Scam

Quick Overview

What Does it Mean?

What Now?

Need a Hand?

AML Changes For The Real Estate Sector

Here We Go Again! Canada’s Proposed AML Changes for Real Estate Developers, Brokers and Sales Representatives

What does this mean for my business?

What’s New?

Virtual Currency:

What existing requirements are changing?

24-hour rule:

Identification:

Records:

Risk Assessment:

Suspicious Transaction Reporting:

Schedules:

Training:

What’s Next?

FINTRAC’s 2016 Real Estate Brief

Quick Overview

What Does it Mean?

What Now?

Need a Hand?

Would You Recognize Real Estate Red Flags?

What This Means to Your Business?

Need a Hand?

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