With the marked increase in financial crime in recent years, it is more important than ever for CPAs to be alert to the risks of money laundering (shapecharge/Getty Images)
The fight against financial crimes is intensifying globally. Here in Canada, updates to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (RPCFAT) The regulations of the last two years are now fully in force. And the 2022 federal budget promised to accelerate the implementation of a publicly accessible register of beneficial owners of corporations under the Canada Business Corporations Act from 2025 to 2023.
We asked financial crimes expert and guide contributor Marc Tassé, CPA, about the purpose of the guide and how CPAs can use it.
CPA CANADA: What was the objective behind the guide?
Marc Tasse (MT): Chartered accountants and accounting firms carrying out activities covered by the (RPCFAT) have an obligation to comply with the law and its regulations.
With this in mind, this guide has three main objectives: to help accountants and accounting firms determine whether the updated AML/ATF obligations are applicable to their activities; to help them develop their AML/ATF program; and to help them better understand the emphasis placed by the AML/ATF regulator (FINTRAC) in compliance examinations and its methods of enforcement, as well as the risks of non-compliance.
CPA CANADA: What has changed since the last version of the guide?
MT: The Financial Action Task Force (FATF) sets the global standards for combating money laundering, counter-terrorism financing and proliferation financing. However, not all countries meet these standards, whether in terms of efficiency or technical compliance. In its assessment of anti-money laundering in Canada diet in 2016the FATF has identified strengths but also weaknesses in these two areas.
Since 2016, Canada has taken steps to strengthen its legislation and regulations to better meet FATF standards. He changed our AML/ATF legislation and regulations on several occasions, with several provisions coming into effect on either June 1, 2020 or June 1, 2021. These changes reflect Canada’s desire to better meet international standards. And while there will no doubt be more changes in the future, the FATF has already acknowledged the progress made to date: in its October 2021 Report it increased Canada’s compliance ratings.
CPA CANADA: What legislative updates should CPAs keep in mind?
MT: The AML/ATF rules only apply to CPAs carrying out activities covered by the AML/ATF legislation. However, if your work falls into these areas, you not only need to know the rules, but you need to make sure you comply with the requirements by having an appropriate compliance program in place, among other obligations.
It is particularly important to familiarize yourself with the new requirements which came into force on June 1, 2021. These updates have strengthened the Canadian AML/ATF regime in the areas of compliance, know your customer, record keeping and reporting to FINTRAC.
CPA CANADA: Why do CPAs need to pay particular attention to anti-money laundering and countering the financing of terrorism at this time?
MT: With the marked increase in financial crime in recent years and the new technologies (such as cryptocurrencies) that are now used by money launderers, it is more important than ever for accountants to be aware of the changing risks.
Additionally, given the war in Ukraine and the associated economic sanctions that must be adhered to, CPAs need to be careful of relevant parties who may attempt to evade sanctions, which could involve money laundering. It is crucial for them to be aware of the relevant legislation, to implement its requirements and to ensure that they know who they are dealing with.
CPA CANADA: What should CPAs keep in mind when using the guide?
MT: The best way to use the guide is to first determine whether, in fact, you are engaged in the “triggering activities” that subject you to AML/ATF legislation. If so, you should read the guide carefully and implement a compliance program, using its examples and checklists.
The guide itself is not an AML/ATF program. Rather, it includes key requirements for implementing an AML/ATF compliance program, knowing your customer, and determining beneficial ownership and third parties involved in transactions. It also covers record keeping, reporting to FINTRAC, penalties for non-compliance and information on FINTRAC’s approach to examinations.
The guide has been updated with references to website links valid at the time of publication. CPAs should be aware of ongoing changes to anti-money laundering and anti-terrorist financing legislation and regulations and any revisions to FINTRAC’s guidance and other links provided.
STAY INFORMED OF YOUR AML OBLIGATIONS
Refer to the recently updated AML guide to learn more about changes to AML/ATF regulations and how the new rules affect CPAs.
In addition, CPA Canada has a wealth of resources on topics such as compliance risk, know your client, record keeping and reporting.
Plus, find out how Canada has progressed against FATF requirements and tune in to our webinar on the latest developments in anti-money laundering.