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FINTRAC announces assessment of obligations coming into force on June 1, 2021
FINTRAC | May 18, 2021
On June 1, 2021, amendments to certain Regulations made under the Proceeds of Crime (Money Laundering and Terrorist Financing Act (PCMLTFA) (the amended Regulations) will come into force and create or change obligations for reporting entities (REs) that are subject to the PCMLTFA. The amendments were published in the Canada Gazette on July 10, 2019 and on June 10, 2020; they can be found here:
- Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2019 (SOR/2019-240)
- Regulations Amending the Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2019 (SOR/2020-112)
REs are required to comply with all the obligations under the PCMLTFA and associated Regulations. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) understands that some REs may experience certain challenges in meeting their obligations by June 1, 2021. Wherever possible, FINTRAC is committed to working constructively with REs.
When will FINTRAC assess the obligations coming into force on June 1, 2021?
Given the scope of the amended Regulations, and its impact on FINTRAC and REs, FINTRAC will exercise flexibility and reasonability when assessing REs' compliance with the amended Regulations.
See: Analysis: Proposed FATF Guidance for Virtual Assets and VASPs
Using its operational policy that focusses on the examination period, FINTRAC will begin assessing compliance with the amended Regulations on April 1, 2022.
From June 1, 2021 to March 31, 2022, FINTRAC will assess compliance with the regulatory requirements in effect prior to June 1, 2021. During this period, FINTRAC will also review REs' most up-to-date compliance program elements. As some REs may have updated their compliance program to reflect new regulatory requirements, this approach will provide REs with feedback to help them meet the requirements of the amended Regulations.
FINTRAC will begin assessing compliance with the amended Regulations on April 1, 2022. However, FINTRAC may assess transactional information for a period prior to April 1, 2022, while exercising reasonability and taking into consideration the flexible measures that FINTRAC has previously communicated in the Notice on forthcoming regulatory amendments and flexibility.
Reporting large virtual currency transactions
As of June 1, 2021, REs will be required to comply with obligations related to virtual currency transactions. REs will have to submit a Large Virtual Currency Transaction Report (LVCTR) when they receive an amount of virtual currency equivalent to $10,000 or more in a single transaction (the 24-hour rule may apply).
FINTRAC recognizes that, given the short timeline and the level of effort required to implement this new reporting obligation, some REs may be facing challenges in meeting this obligation on June 1, 2021. When an RE is not able to meet this reporting obligation, FINTRAC expects it to:
- Keep records of the reportable transactions as of June 1, 2021.
- Complete the implementation of its LVCTR system as soon as possible and no later than December 1, 2021.
- Submit all the unreported large virtual currency transactions for the period of June 1, 2021 to November 30, 2021 via the FINTRAC Upload or the FINTRAC web reporting system (F2R) as soon as possible and no later than March 31, 2022.
In the fall of 2021, F2R will be updated so that REs can use it to submit LVCTRs. REs that do not report large virtual currency transactions via FINTRAC Upload are expected to start submitting all large virtual currency transactions, including those transactions that were previously reportable but had not been submitted, as soon as F2R becomes available.
See: United States: Virtual Currencies Regulatory Overview (and Comparative Guide)
By December 1, 2021, FINTRAC expects that REs will have fully implemented their large virtual currency transaction reporting systems. Consequently, from that date and going forward, REs must submit LVCTRs within five working days after the day on which they receive the large virtual currency amount.
Continue to the full article learn more about:
- Reporting electronic funds transfers
- Declaring non-compliance to FINTRAC as of June 1, 2021
- When will FINTRAC update its Assessment Manual?
- When will FINTRAC update its Administrative Monetary Penalties harm done assessment guides?
Continue to the full article --> here
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