Proceeds of Crime (Money Laundering) and Terrorist Financing Act (S.C. 2000, c. 17)

Marginal note:Verifying identity

6.1 Every person or entity referred to in section 5 shall verify the identity of a person or entity in accordance with the regulations.

Reporting and Other Requirements

Marginal note:Transactions if reasonable grounds to suspect

7 Subject to section 10.1, every person or entity referred to in section 5 shall, in accordance with the regulations, report to the Centre every financial transaction that occurs or that is attempted in the course of their activities and in respect of which there are reasonable grounds to suspect that

• (a) the transaction is related to the commission or the attempted commission of a money laundering offence;

• (b) the transaction is related to the commission or the attempted commission of a terrorist activity financing offence; or

• (c) the transaction is related to the commission or the attempted commission of a sanctions evasion offence.

Marginal note:Disclosure

• 7.1 (1) Every person or entity referred to in section 5 that is required to make a disclosure under section 83.1 of the Criminal Code or under section 8 of the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism shall report to the Centre in accordance with the regulations.

• Marginal note:Limitation

  (2) Subsection (1) does not apply to prescribed persons or entities, or prescribed classes of persons or entities, in respect of prescribed transactions or property, or classes of transactions or property, if the prescribed conditions are met.

Marginal note:No disclosure of reports

8 No person or entity shall disclose that they have made, are making or will make a report under section 7, or disclose the contents of such a report, with the intent to prejudice a criminal investigation, whether or not a criminal investigation has begun.

Marginal note:Financial transactions to be reported

• 9 (1) Subject to section 10.1, every person or entity referred to in section 5 shall report to the Centre, in accordance with the regulations,

  • (a) any financial transaction, or any financial transaction within a class of financial transactions, specified in a directive issued under Part 1.1 that occurs or that is attempted in the course of their activities; and

  • (b) any prescribed financial transaction that occurs in the course of their activities.

• Marginal note:Limitation

  (2) Subsection (1) does not apply to prescribed persons or entities, or prescribed classes of persons or entities, in respect of prescribed transactions, classes of transactions, clients or classes of clients, if the prescribed conditions are met.

• Marginal note:List of persons

  (3) Every person or entity referred to in section 5 shall establish and maintain a list, in the prescribed form and manner, of their clients in respect of whom a report would have been required under subsection (1) were it not for subsection (2). However, a person or an entity may choose to report a client’s transactions under subsection (1) instead of maintaining the list in respect of that client.

Marginal note:Reports under other Acts

9.1 Subject to section 9, every person or entity that is required to make a report to the Centre under another Act of Parliament or any regulations under it shall make the report in the form and manner and within the period prescribed under this Act for a report under that Act.

Marginal note:Inability to verify identity

9.2 No person or entity that is referred to in section 5 shall open an account for a client if the person or entity cannot verify the identity of the client in accordance with the regulations.

Marginal note:Politically exposed persons

• 9.3 (1) Every person or entity that is referred to in section 5 and that is prescribed shall determine, in the prescribed circumstances and in accordance with the regulations, whether it is dealing with

  • (a) a politically exposed foreign person, a prescribed family member of a politically exposed foreign person, or a person who the person or entity knows or should reasonably know is closely associated, for personal or business reasons, with a politically exposed foreign person;

  • (b) a politically exposed domestic person, a prescribed family member of a politically exposed domestic person, or a person who the person or entity knows or should reasonably know is closely associated, for personal or business reasons, with a politically exposed domestic person; or

  • (c) the head of an international organization, a prescribed family member of the head of an international organization, or a person who the person or entity knows or should reasonably know is closely associated, for personal or business reasons, with the head of an international organization.

• Marginal note:Measures — politically exposed foreign persons

  (2) If the person or entity determines that it is dealing with a person described in paragraph (1)(a), the person or entity shall take the measures referred to in the regulations.

• Marginal note:Measures — other persons

  (2.1) If the person or entity determines that it is dealing with a person described in paragraph (1)(b) or (c) and considers, based on an assessment referred to in subsection 9.6(2), that there is a high risk of a money laundering offence or a terrorist activity financing offence being committed, the person or entity shall take the measures referred to in the regulations.

• Marginal note:Definitions

  (3) The following definitions apply in this section.

  head of an international organization

  head of an international organization means a person who, at a given time, holds — or has held within a prescribed period before that time — the office or position of head of

  • (a) an international organization that is established by the governments of states;

  • (b) an institution of an organization referred to in paragraph (a); or

  • (c) an international sports organization. (dirigeant d’une organisation internationale)

  politically exposed domestic person

  politically exposed domestic person means a person who, at a given time, holds — or has held within a prescribed period before that time — one of the offices or positions referred to in any of paragraphs (a) and (c) to (j) in or on behalf of the federal government or a provincial government or any of the offices or positions referred to in paragraphs (b) and (k):

  • (a) Governor General, lieutenant governor or head of government;

  • (b) member of the Senate or House of Commons or member of the legislature of a province;

  • (c) deputy minister or equivalent rank;

  • (d) ambassador, or attaché or counsellor of an ambassador;

  • (e) military officer with a rank of general or above;

  • (f) president of a corporation that is wholly owned directly by Her Majesty in right of Canada or a province;

  • (g) head of a government agency;

  • (h) judge of an appellate court in a province, the Federal Court of Appeal or the Supreme Court of Canada;

  • (i) leader or president of a political party represented in a legislature;

  • (j) holder of any prescribed office or position; or

  • (k) mayor, reeve or other similar chief officer of a municipal or local government. (national politiquement vulnérable)

  politically exposed foreign person

  politically exposed foreign person means a person who holds or has held one of the following offices or positions in or on behalf of a foreign state:

  • (a) head of state or head of government;

  • (b) member of the executive council of government or member of a legislature;

  • (c) deputy minister or equivalent rank;

  • (d) ambassador, or attaché or counsellor of an ambassador;

  • (e) military officer with a rank of general or above;

  • (f) president of a state-owned company or a state-owned bank;

  • (g) head of a government agency;

  • (h) judge of a supreme court, constitutional court or other court of last resort;

  • (i) leader or president of a political party represented in a legislature; or

  • (j) holder of any prescribed office or position. (étranger politiquement vulnérable)

Marginal note:Prohibition if unregistered

• 9.31 (1) No entity referred to in paragraph 5(a), (b), (d), (e) or (e.1) and no other entity that is referred to in section 5 and that is prescribed shall open or maintain an account for, or have a correspondent banking relationship with, a person or entity referred to in paragraph 5(h.1) unless that person or entity is registered with the Centre under section 11.1.

• Marginal note:Definition of correspondent banking relationship

  (2) For the purposes of this section, correspondent banking relationship means a relationship created by an agreement or arrangement under which an entity referred to in paragraph 5(a), (b), (d), (e) or (e.1) or an entity that is referred to in section 5 and that is prescribed undertakes to provide to a person or entity referred to in paragraph 5(h.1) prescribed services or international electronic funds transfers, cash management or cheque clearing services.

Marginal note:Correspondent banking

• 9.4 (1) Every entity referred to in any of paragraphs 5(a), (b), (d), (e) and (e.1) and every other entity that is referred to in section 5 and that is prescribed shall take the measures referred to in the regulations in respect of any correspondent banking relationship it enters into with a prescribed foreign entity and shall take the following measures before entering into such a correspondent banking relationship:

  • (a) obtain prescribed information about the foreign entity and its activities;

  • (b) ensure that the foreign entity is not a shell bank as defined in the regulations;

  • (c) obtain the approval of senior management;

  • (d) set out in writing their obligations and those of the foreign entity in respect of the correspondent banking services; and

  • (e) any prescribed measures.

• Marginal note:Prohibition — shell bank

  (2) No person or entity shall have a correspondent banking relationship with a shell bank as defined in the regulations.

• Marginal note:Definition of correspondent banking relationship

  (3) For the purposes of this section, correspondent banking relationship means a relationship created by an agreement or arrangement under which an entity referred to in any of paragraphs 5(a), (b), (d), (e) and (e.1) or an entity that is referred to in section 5 and that is prescribed undertakes to provide to a prescribed foreign entity prescribed services or international electronic funds transfers, cash management or cheque clearing services.

Marginal note:Electronic funds transfer

9.5 Every person or entity that is referred to in section 5 and that is prescribed shall, in respect of a prescribed electronic funds transfer that occurs in the course of their financial activities,

• (a) include with the transfer any prescribed information and, as the case may be,

  • (i) the name, address and account number of the holder of the account from which the funds for the transfer are withdrawn, or

  • (ii) the name, address and reference number of the person or entity that requested the transfer;

• (b) take reasonable measures to ensure that any transfer that the person or entity receives includes that information; and

• (c) take any prescribed measures.

Marginal note:Compliance program

• 9.6 (1) Every person or entity referred to in section 5 shall establish and implement, in accordance with the regulations, a program intended to ensure their compliance with this Part and Part 1.1.

• Marginal note:Risk assessment

  (2) The program shall include the development and application of policies and procedures for the person or entity to assess, in the course of their activities, the risk of a money laundering offence or a terrorist activity financing offence.

• Marginal note:Special measures

  (3) If, at any time, the person or entity considers that the risk referred to in subsection (2) is high, or in the prescribed circumstances, the person or entity shall take the special measures referred to in the regulations.

Marginal note:Measures and information: paragraph 5(e.1)

• 9.61 (1) Every entity referred to in paragraph 5(e.1) shall take the prescribed measures related to the program referred to in subsection 9.6(1) and shall provide the prescribed information to the Centre in the prescribed circumstances.

• Marginal note:Service

  (2) An entity referred to in paragraph 5(e.1) must provide to the Centre the name and address for service of a person who resides in Canada and who is authorized to accept, on behalf of the entity, notices that are served or caused to be served by the Centre under this Act.

• Marginal note:Authorized person

  (3) The service of a notice by or on behalf of the Centre on an entity referred to in paragraph 5(e.1) is sufficient if it is served on the person whose name is provided under subsection (2).