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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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fintrac

FINTRAC

Financial Transactions and Reports

Analysis Centre of Canada

August, 2001

background
Background
  • 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
key principles of the act
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
reportable transactions and established thresholds
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
receipt of voluntary information
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
part 1 regulations
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
part 2 regulations cross border reporting
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
financial transactions and reports analysis centre of canada
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
fintrac s role in efforts to eliminate money laundering
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
financial transactions reports and analysis centre of canada
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.
compliance
Compliance
  • 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
guidelines
Guidelines
  • 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
analysis of information
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”
disclosure
Disclosure
  • 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
relationship with law enforcement
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
relationship with law enforcement16
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
conclusion
Conclusion
  • 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.