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  • Writer's pictureDeborah

On April 5, 2022, the Department of Finance released amending regulations (Regulations) to the regulations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).

The changes bring certain exempt entities into the scope of the PCMLTFA Regulations and specify, amongst others, that crowdfunding platforms and payment service providers fall within the definition of foreign and domestic money services businesses (MSBs). As a consequence of these changes these entities must ensure to comply with the requirements under the PCMLTFA including:

  • Register with FINTRAC

  • Implement the relevant compliance program, procedures and policies

  • Proceed with the know your customer requirements

  • Report certain transactions to FINTRAC

  • Keep record of certain information

Financial entities are also impacted as they are prohibited under these changes from opening accounts for MSBs that are not registered with FINTRAC.

Another important amendment is the one related to the definition of electronic funds transfers (ETFs), notably the exemption applicable to merchant servicing and payment processing activities has been repealed. MSBs that carry out transactions by means of a credit/debit card (where the beneficiary has an agreement with the payment service provider) must comply with EFT obligations.

The changes are effective from April 27, 2022.

Various FINTRAC Guidance have been updated to include these recent changes including the Client identification requirements for MSBs and FMSBs and the Record keeping requirements for MSBs and FMSBs.

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