Money Laundering Compliance Reviews

Money laundering is an issue that often doesn’t get into the headlines, but is frequently associated with many of the major crimes we read about every day like fraud, drug trafficking, terrorist financing, human trafficking and financial market manipulation.

Some businesses in Canada have, surprisingly, ignored their obligation to adhere to the requirements of our anti-money laundering (AML) legislation.  This has resulted in significant penalties being assessed to them (some as high as $350,000 to date).  The regulations provide for higher penalties and possible jail time as well, but the cost to your business from loss of reputation may be incalculable.

At CHRIS MATHERS INC. we understand the legislative requirements applicable to your business.  We have substantial sector-specific experience to provide you with advice and guidance on how best to avoid becoming involved with money laundering or terrorist financing issues.  Our expertise is un-matched and includes both a law enforcement perspective and in-depth business experience. 

Our experts can help you ensure that your AML compliance regime is effective, assist you to structure your business to mitigate money laundering related risks in your day-to-day operations and keep you from running afoul of the law and regulators.  We can show you how to make proper risk assessments, carry out the required level of due diligence (or complete it for you if required) and properly document the results.  We can also train your Directors, Senior Management and staff to ensure each understands their respective compliance obligation. 

Keeping your AML policies, procedures and risk assessment up to date (as required by regulation) can be a daunting task.  Changing legislative requirements need to be managed on a timely basis to avoid possible penalties.

In Canada, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (“PCMLTFA”) sets out specific compliance requirements for registrants and others required to establish an AML compliance regime. The PCMLTFA is administered by The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).  In addition, certain sectors have additional compliance requirements set out by OSFI, IIROC and other SRO’s.

Those businesses required to comply with the PCMLTFA and other relevant AML regulations include:

  • Financial Entities

  • Securities Dealers (including investment advisor, portfolio manager, etc.)

  • Money Services Businesses

  • Life Insurance Companies

  • Dealers in Precious Metals and Stones

  • Casinos

  • Accountants

  • Real estate (including brokers, sales reps and developers)

  • British Columbia Notaries

  • Agents of the Crown that Sell or Redeem Money Orders

A proper AML compliance regime must include each of the following:

  1. The appointment of a compliance officer.

  2. The development and application of written compliance policies and procedures.

  3. A risk-based assessment of risks of your firm’s money laundering and terrorist financing exposure,

  4. Implementation and documentation of an ongoing compliance training program.

  5. A documented review of the effectiveness of policies and procedures, training program and risk assessment.

The PCMLTFA requires that you have an independent review of your AML compliance regime at least every two years.  CHRISMATHERS INC. regularly conducts these compliance reviews for our clients. We have a comprehensive review program to help you ensure you are employing AML best practices in your business.

Penalties for non-compliance are steep. In addition, the best way to safeguard your business from becoming inadvertently entangled in money laundering or terrorist financing is to know your clients, properly assess your risks, train your employees and have an effective, up to date AML compliance policy and risk assessment.

FINTRAC has the authority to issue administrative monetary penalties (AMPs) in response to non-compliance with the PCMLTFA and related regulations. FINTRAC makes information about AMPs public on its website at http://www.fintrac-canafe.gc.ca.

The administrative penalties for non-compliance with the PCMLTFA range up to $100,000 for and individual and $500,000 for an entity for each offence and the possible penalties for your firm’s senior officers range up to $2,000,000, five years in prison or both.

You and your firm could also be subject to review of your AML compliance regime by OSFI, provincial securities regulators or your SRO’s.  You should know your industry-specific requirements and ensure your policy and procedures reflect them.

CHRIS MATHERS INC. provides a full range of corporate risk management services including independent AML compliance reviews, AML compliance training and advice to properly structure your AML compliance regime.

With substantial investigative skills and first-hand experience within many business sectors, we are well positioned to handle all of your regulatory and corporate risk management requirements including those related to AML compliance.