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FINTRAC. Financial Transactions and Reports Analysis Centre of Canada August, 2001. Background. Previous Proceeds of Crime Legislation Mandated record keeping for deposit-taking institutions Voluntary reporting of suspicious transactions

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Financial Transactions and Reports

Analysis Centre of Canada

August, 2001

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  • Previous Proceeds of Crime Legislation

    • Mandated record keeping for deposit-taking institutions

    • Voluntary reporting of suspicious transactions

    • System felt to be inconsistent and not in keeping with international requirements

  • New Proceeds of Crime (Money Laundering) Act

    • Received Royal Assent on June 29, 2000

    • Broadens reach of previous system and implements mandatory reporting of suspicious and certain prescribed transactions

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Key Principles of the Act

  • Detect and deter money laundering

  • Provide vital tools to law enforcement

  • Strike a balance between privacy rights and enforcement needs

  • Fulfill Canada’s international commitments in the fight against transnational crime

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Reportable Transactions and Established Thresholds

  • Large Cash Transactions and International Electronic Funds Transfers of $10,000 or more

    • $10,000 reporting threshold established to ensure that ‘ordinary’ transactions of ‘average’ Canadians are not reported to FINTRAC

  • Suspicious Transactions

    • No monetary reporting threshold – ‘reasonable grounds to suspect that the transaction is related to the commission of a money laundering offence’

  • Other Prescribed Transactions

    • Certain casino and foreign exchange transactions

    • Cross-border movements of currency or monetary instruments

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Receipt of Voluntary Information

  • The Act enables FINTRAC to receive and use information related to a suspicion of money laundering that is voluntarily provided to the Centre from:

    • Law enforcement; the public; reporting entities; and other FIUs.

  • FINTRAC can also access public and commercial databases

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Part 1 Regulations

  • Pre-published in the Canada Gazette February 17, 2001 for a 90-day comment period

  • Regulations will be phased in

    • Suspicious transactions – November 2001

    • International electronic funds transfers – Winter 2001/02

    • Large cash transactions and compliance regime requirements– Spring 2002

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Part 2 Regulations - Cross Border Reporting

  • Requirement to report cross-border movements of large amounts of currency and monetary instruments to Canada Customs

  • Regulations pertaining to Part 2 of the Act are in development and are expected to be pre-published later this year

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Financial Transactions and Reports Analysis Centre of Canada

  • Independent agency mandated to collect, analyze and disclose information to assist in the detection, prevention and deterrence of money laundering

  • Headquartered in Ottawa, with regional offices in Toronto, Montreal and Vancouver

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FINTRAC’s Role in Efforts to Eliminate Money Laundering

  • Provide law enforcement with key intelligence and play a key role in the National Initiative to Combat Money Laundering

  • Enhance Canada’s domestic and international efforts in combating organized crime and money laundering

  • Contribute to the integrity of Canada’s financial infrastructure

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Financial Transactions Reports and Analysis Centre of Canada

  • To fulfill this role, FINTRAC will:

    • Receive reports from reporting entities;

    • Analyze reported information;

    • Disclose suspicions of money laundering to enforcement agencies;

    • Ensure compliance with reporting requirements;

    • Undertake strategic research on issues related to money laundering;

    • Advise government on the nature and scope of money laundering;

    • Promote public awareness and provide feedback to reporting entities.

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  • FINTRAC is responsible for ensuring compliance

  • In addition to meeting the record keeping, client identification, and reporting obligations, reporting entities are also required to implement a compliance regime with the following elements:

    • Compliance Officer

    • Policies and Procedures

    • Training Program

    • Periodic Review

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  • Stakeholders identified a need for guidelines – 4 were released with the pre-publication of the Regulations:

    • Background Information on Money Laundering

    • Suspicious Transaction Reporting

    • Submitting Reports to FINTRAC

    • Implementation of a Compliance Regime

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Analysis of Information

  • Information will be housed in a highly secure computer facility to ensure data integrity and privacy

  • Will use state of the art technology to sift out unusual patterns of activities

  • Analysts will then provide the “human factor”

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  • FINTRAC may only disclose information where there are reasonable grounds to suspect that it would be relevant to an investigation or prosecution of a money laundering offence

  • Designated or “tombstone” information will then be disclosed to the appropriate law enforcement agency

  • To acquire further information, law enforcement must obtain Production Order

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Relationship with Law Enforcement

  • FINTRAC’s“raison d’etre” is to support the efforts of the law enforcement community

  • FINTRAC is sensitive to the heavy workload among enforcement agencies

  • Our goal is to provide high quality, useful disclosures that will assist law enforcement

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Relationship with Law Enforcement

  • The Act requires FINTRAC to maintain an arms length relationship with law enforcement

  • Enforcement cannot access FINTRAC databases or task the Centre

  • Law enforcement can provide voluntary information to assist FINTRAC in determining relevance to a money laundering investigation or prosecution

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  • FINTRAC is committed to:

    • Developing productive relationships with law enforcement, reporting entities, and international agencies;

    • Producing high-quality analysis and assessments about suspected money laundering to assist law enforcement;

    • Contributing to the fight against money laundering.