Minister of Finance Launches Consultation to Update Anti-Money Laundering and Anti-Terrorist Financing Regime

Related Document:

• Strengthening Canada’s Anti-Money Laundering and Anti Terrorist Financing Regime

The Honourable Jim Flaherty, Minister of Finance, today launched a consultation aimed at updating Canada’s regime for combating money laundering and terrorist financing.

“Money laundering and terrorist financing not only threaten the financial system, they enable crimes that may harm Canadians and threaten our quality of life,” said Minister Flaherty. “The potential business and societal damage of these crimes underscore the need for a clear and effective deterrent.”

A consultation paper, “Strengthening Canada’s Anti-Money Laundering and Anti‑Terrorist Financing Regime,” puts forward several proposals that may be considered for future changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

The proposals in the paper are organized around the following key areas:

• strengthening client due diligence standards;
• closing gaps in Canada’s regime;
• improving compliance, monitoring and enforcement;
• strengthening information sharing in the regime;
• introducing a list of potential countermeasures; and
• updating reporting requirements.

The paper will also serve to inform the Parliamentary review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act that will be conducted in 2012 by the Standing Senate Committee on Banking, Trade and Commerce.

Comments can be emailed to: fcs-scf@fin.gc.ca. The deadline for comments is March 1, 2012.

Written comments can be forwarded to:

Leah Anderson
Director, Financial Sector Division
Department of Finance
L’Esplanade Laurier
20th Floor, East Tower
140 O’Connor Street
Ottawa, Ontario, K1A 0G5

Society Act discussion paper invites feedback

VICTORIA – A new discussion paper on the Society Act invites discussion on the governance of B.C. societies and possible directions for reform.

The Province launched a review of the Society Act in 2009 to identify legislative obstacles that may be preventing societies from operating most effectively and to ensure continued protection of the public interest.

The first round of consultations invited stakeholder comments and received submissions from more than 200 individuals and organizations. The discussion paper puts forward a number of proposals based on the feedback received.

The proposals recognize the unique nature of societies and aim to balance societies’ need for flexibility with broader concerns of accountability and integrity. The discussion paper does not represent government policy, but is intended to encourage discussion and provide interested parties with the opportunity to comment on possible directions for reform to the Society Act.

The Society Act outlines the rules that govern B.C.’s more than 26,000 societies. Societies are non-profit corporations organized primarily for social purposes. They make valuable contributions to B.C.’s families and communities, ranging from small community-based organizations to large charitable foundations.

Legislation is targeted for 2013 at the earliest.

The official deadline for submissions is April 30, 2012.

To view the discussion paper or make a submission, visit http://www.fin.gov.bc.ca/cep/fcsp/society_act_discussion.htm

Review of Youth Criminal Justice Act to be undertaken

FREDERICTON (CNB) – The provincial government has been notified by the Office of the Child and Youth Advocate that it will carry out a systemic review of services to young persons in New Brunswick in relation to the application of the federal Youth Criminal Justice Act. Christian Whalen, acting child and youth advocate, advised his intention to carry out this review in a letter to Attorney-General Marie-Claude Blais. “New Brunswick has much higher youth incarceration and charge rates than most other provinces in Canada,” said Whalen. “Other jurisdictions have seen youth incarceration rates decline since the inception of the Youth Criminal Justice Act, but New Brunswick has seen little progress.” In his letter to Blais, Whalen raised concerns that the provincial government, law enforcement, and the judiciary have yet to adopt many practices under the act that are intended to divert youth with complex needs from the criminal justice system. Concerns raised by Whalen include: ●    the lack of designated hospital facilities for mental-health assessments; ●    the lack of progress on the development of community youth justice committees; ●    underuse of family case conferences; ●    the absence of detailed guidelines for pre-charge screenings; and ●    the absence of a specialized youth criminal justice defence bar within the province. The Office of the Child and Youth Advocate has notified the following departments of the review and has asked them to provide relevant documents: ●    Social Development; ●    Education and Early Childhood Development; ●    Health; and ●    Public Safety. The RCMP, municipal police forces and the New Brunswick Legal Aid Commission will also be asked to aid in conducting the review. The review follows the Whalen’s recent submission to the House of Commons committee on justice and human rights that called on Parliament to suspend further consideration of the proposed amendments to the Youth Criminal Justice Act, contained in Bill C-10. That 10-page submission raised concerns about what the proposed changes could mean for youth in New Brunswick, and it highlighted six proposed amendments in the bill that appear to detract from the purpose of the act. “We all have an onus to ensure that young people engaged in youth criminal justice processes receive the best services and equal protection and benefit of the law,” said Whalen. “We also need to do a better job of using the act to find solutions at the family and community level that will keep our young people of the criminal justice system and away from a life of crime. That is how we will truly keep communities safe. “Putting families at the centre of the solution whenever we deal with youth with high-end needs is the most effective way of intervening. That is why we want to hear from New Brunswick youth with an experience with the Youth Criminal Justice Act and their families as this review unfolds.” Comments and questions about the Youth Criminal Justice Act may be submitted by e-mail to advocate-défenseur@gnb.ca. Whalen’s submission to the House of Commons standing committee on justice and human rights is online. LINK: ●    Office of the Child and Youth Advocate: www.gnb.ca/cyanb

JUSTICE MINISTER INTRODUCES MOTION TO STUDY PROVINCIAL LOBBYIST LEGISLATION

New legislation introduced today, Dec. 5, will ensure public sector organizations cannot use their funds to pay external lobbyists.

“We understand Nova Scotians are concerned about how public sector organizations spend their money,” said John MacDonell, Minister of Service Nova Scotia and Municipal Relations. “This new act will increase accountability and ensure limited funds don’t go to external lobbyists.”

Under the Public Sector Lobbyists Act, organizations such as school boards, housing and health authorities can still lobby government directly through employees and officers.

“Lobbying is a legitimate democratic activity,” Mr. MacDonell said. “We’re being proactive so organizations and people involved in lobbying can focus their efforts appropriately.”

Nova Scotia was one of the first provinces to regulate lobbyists and increase transparency with the Registry of Lobbyists.

Premier appoints task force to ensure landowners heard

Edmonton… Premier Alison Redford has created a task force that will be asking Albertans for their concerns regarding property rights.

“We have heard concerns from landowners that their property rights need to be better respected,” said Redford. “We need to move towards a more common-sense approach when it comes to property rights.”

The task force will be chaired by Diana McQueen, Minister of Environment and Water, with Evan Berger, Minister of Agriculture and Rural Development, as the vice-chair.

Other members include Verlyn Olson, Q.C., Minister of Justice and Attorney General; Jeff Johnson, Minister of Infrastructure; Cal Dallas, Minister of Intergovernmental, International and Aboriginal Relations; Frank Oberle, Minister of Sustainable Resource Development; Raymond Prins, MLA for Lacombe-Ponoka; and Arno Doerksen, MLA for Strathmore Brooks.

“We want to listen to Albertans and have a discussion about what property rights mean to them and what needs to be improved,” said McQueen.

In December, meetings will take place with stakeholders. In January, open houses will occur in several communities. To complement face-to-face efforts, a website will allow for written input from Albertans. Further details on how Albertans can participate will be released in the coming weeks.

To call toll free within Alberta dial 310-0000.

Consultation Paper on Proposed Amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations on Ascertaining Identity

Introduction

The Government of Canada (‘the Government’) is proposing changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFR) in order to strengthen Canada’s Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime and to improve Canada’s compliance with the Financial Action Task Force’s (FATF) 40+9 Recommendations on Money Laundering and Terrorist Financing.

Domestic Considerations

The strength of an AML/ATF regime hinges in large part on the ability of financial institutions and intermediaries to know their clients, to understand their activities, and to identify potentially suspicious transactions that may be related to money laundering or terrorist financing.  Collectively, this is known as customer due diligence, or ‘CDD measures’. Deficiencies have been identified in Canada’s AML/ATF regime relating to its CDD obligations, which could weaken the ability of Canadian reporting entities to detect and deter transactions related to money laundering and terrorist financing.  This could harm not only the reporting entities themselves, but the stability of Canada’s financial system as a whole.

The Government is proposing regulatory amendments to address those deficiencies. The changes proposed would allow reporting entities to better identify customers and understand their business, which will consequently enable them to identify transactions and activities that are at greater risk for money laundering or terrorist financing.  These changes are intended to strengthen the ability of reporting entities to identify funds related to money laundering or terrorist financing, and stop them from entering into Canada’s financial system and the broader international financial system.

The proposed amendments are also expected to enhance the ability of reporting entities to take a risk-based approach to customers, products and activities and to comply with their obligations under the PCMLTFR, by introducing the concept of a ‘business relationship’.  This is expected to permit a more balanced approach to compliance, as it will assist reporting entities to better implement a risk-based approach, and give them greater scope and flexibility when complying with certain obligations under the PCMLTFR.

International Considerations

The FATF is the international AML/ATF standard setting body and monitors the implementation of the standards.   The FATF’s 40 Recommendations on Money Laundering and 9 Special Recommendations on Terrorist Financing are international AML/ATF standards that member countries, including Canada, have agreed to implement.  The FATF identifies six of its 40 + 9 Recommendations as core Recommendations, with which member countries are to be largely or fully compliant.  Failure to be largely or fully compliant with core Recommendations over time could mean that a member country is subject to disciplinary action by the FATF and its individual member states.

Recommendation 5 is a core Recommendation.  It states that member countries should implement measures to ensure that financial institutions are adequately able to identify their customers when establishing business relations or carrying out occasional transactions.  These measures include:

1. Identifying the customer using reliable, verifiable documentation;
2. Identifying and taking reasonable measures to verify the identity of a beneficial owner;
3. Obtaining information on the purpose and intended nature of a business relationship; and
4. Conducting ongoing due diligence on the business relationship and scrutiny of transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the institution’s knowledge of the customer, their business and risk profile, including, where necessary, the source of funds.

The FATF reported on its Mutual Evaluation of Canada’s AML/ATF regime in February, 2008.  As a result of that evaluation, Canada received a rating of Non-Compliant (NC) in respect of Recommendation 5.  A rating of NC means that “there are major shortcomings, with a large majority of the essential criteria not being met”.   While regulatory provisions that subsequently came into force address some of the shortcomings identified in the 2008 Mutual Evaluation Report for Canada, they are not deemed sufficient by the FATF to meet Recommendation 5 at a Largely Compliant (LC) or Compliant (C) level.

The full text of Recommendation 5 is attached as Annex A, and the relevant portions of the FATF Methodology for Assessing Compliance with the 40 Recommendations and 9 Special Recommendations is attached as Annex B.

Non-compliance could have negative implications for Canada’s financial sector, particularly in countries, such as EU members, where reliance may be placed on the FATF’s evaluations to determine risk. If financial dealings with Canadian institutions are deemed to carry a higher risk for money laundering or terrorist financing purposes, the activities of Canadian financial institutions overseas, as well as Canadian financial dealings with other countries could be affected.

Rationale for Proposed Changes

The Government of Canada is proposing a number of regulatory changes to the PCMLTFR.  The purpose of these changes is:

1. To strengthen Canada’s AML/ATF regime by improving the capacity of reporting entities to know their customers and by increasing their ability to identify transactions potentially related to money laundering or terrorist financing;
2. To assist reporting entities to comply with their obligations under Canada’s AML/ATF regime, by allowing them to take a more risk-based approach to examining activities, transactions and customer relationships that are subject to the Act;
3. To safeguard the international reputation of Canada’s financial system and institutions, and promote their continued integrity and strength.
4. To improve Canada’s compliance with FATF Recommendation 5, and thereby strengthen Canada’s contribution to global AML/ATF efforts that help to prevent abuses of the financial system;  and
5. To ensure that Canada will not be subject to disciplinary action by the FATF as the result of non-compliance with Recommendation 5.

How to Comment:

The Government looks forward to receiving the comments of interested parties on these proposals. Comments regarding any element of this paper are invited and can be emailed to fcs-scf@fin.gc.ca.

Also, written comments can be forwarded to:

Leah Anderson
Director, Financial Sector Division
Department of Finance
140 O’Connor Street
Ottawa, Ontario, K1A 0G5

Written comments should be forwarded by December 16, 2011

To add to the transparency of the consultation process, the Department of Finance will post submissions on its website, with the consent of the submitting party.  We ask that, in providing your submission, you clearly state:

• whether you consent to the posting of your submission on the Department of Finance website, and
• whether you  consent to the inclusion of your name and/or the name of the organization you represent when the submission is posted on the Department of Finance website.

The Department of Finance will not post submissions that do not clearly provide consent to do so.  If you consent to the posting of your submission on the Department of Finance website, please ensure to provide the submission electronically in PDF format or in plain text.

Once received by the Department of Finance, all submissions are subject to the Access to Information Act (ATIA) and may be disclosed in accordance with its provisions.

Proposed Scrap Metal Dealers and Recyclers Act

Department of Justice

The province is proposing legislation that will make it harder for thieves to sell stolen metals, which will better protect the health, safety and property of Nova Scotians.

“The thieves who are stealing oil pipes, telephone cables and power lines are threatening the safety of Nova Scotians, harming our environment and hurting the economy of our province,” said Justice Minister Ross Landry. “Nova Scotians want these vandals and thieves stopped, and we intend to make it harder for them to profit from their crimes.”

Before the legislation is introduced, Mr. Landry is asking for input from Nova Scotians, including the scrap metal industry.

The legislation would require scrap metal dealers and recyclers to keep a record of their transactions, including the identity of the seller. They must also notify police when they receive certain items, such as industrial copper wire. The penalties for not complying with the legislation would be a fine of up to $5,000 or one year in jail.

“Copper theft is a real problem in Nova Scotia,” said Paul Casey, director of reliability and control centre operations for Nova Scotia Power. “These thefts cause unnecessary power outages, they cost our customers hundreds of thousands of dollars in unnecessary expenses, and they create hazardous worksites for our crews who have to repair the damage.”

The consultation period will close Friday, Oct. 21. More information on how Nova Scotians can be involved can be found at www.gov.ns.ca/just/consultation .

The Department of Justice is working to improve and update the province’s family laws. The Department would like your feedback on proposed changes affecting the Maintenance and Custody Act and the Reciprocal Enforcement of Custody Orders Act. Discussion papers on both legislative proposals are provided below, along with other supporting information.

The Maintenance and Custody Act governs custody, access and maintenance where families are experiencing separation (where divorce proceedings have not been commenced or are not relevant). The Department is proposing to:

1. add factors for the court to consider when assessing the best interests of a child in custody and access matters, including whether there has been any family violence;
2. add factors for the court to consider when assessing the impact of family violence;
3. add the principle that a child should have as much contact with each parent as is consistent with the child’s best interests, subject to the court’s assessment of any family violence; and
4. clarify that grandparents are able to seek custody or access of a grandchild under this Act with the permission of the court.

The Reciprocal Enforcement of Custody Orders Act governs the recognition and enforcement of out-of-province custody and access orders and is an outdated statute. The Department is planning to repeal the Reciprocal Enforcement of Custody Orders Act and replace it with more modern legislation that will bring the province into line with other Canadian provinces and territories. The Department intends to replace it with the uniform Custody Jurisdiction and Enforcement Act, which is a uniform statute developed by the Uniform Law Conference of Canada and recommended for adoption by all provinces and territories in Canada.

We invite you to review the documents provided below and send us your feedback, electronically or in writing, by October 24, 2011.

Questions and feedback may be sent to:

Email: familylawfeedback@gov.ns.ca
Phone: 424-6094
Mail: Family Law Reform Project, Nova Scotia Department of Justice, 5151 Terminal Rd., P.O. Box 7, Halifax, B3J 2L6

Supporting Documents

• Current Maintenance and Custody Act
• Discussion Paper: “Updating our custody and access laws: proposed amendments to the Maintenance and Custody Act” (PDF)

• Current Reciprocal Enforcement of Custody Orders Act
• Discussion Paper: “Updating the law on out-of-province custody and access orders” (PDF)
• Reference: Uniform Custody Jurisdiction and Enforcement Act, Uniform Law Conference of Canada

To receive hard copies of any of the above materials, please call 424-6094 or send your request by email to familylawfeedback@gov.ns.ca

The GNWT Department of Justice is planning to create a new Legal Aid Act. A consultation document and draft bill are provided for comment. For more information or to submit comments, contact the Policy and Planning Division, GNWT Department of Justice, at communications_advisor@gov.nt.ca, or 867-920-6418 (ph) or 867-873-0659 (fx). We would appreciate receiving any comments you may have regarding the proposed new Legal Aid Act by Friday, September 30, 2011.