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May 13, 2005
Anti-Money Laundering Legislation and its impact on CAs and CA firms
FINTRAC begins compliance examinations
Fighting money laundering is in the public interest! It is mandatory for CAs and CA firms that serve as financial intermediaries on behalf of their clients to report suspicious transactions and certain other financial transactions to FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). Over the past few months, FINTRAC has begun conducting compliance examinations and may have sent you a letter requesting that you fill out an online questionnaire. FINTRAC will continue with these examinations for all persons and entities covered by the Act, including accountants and accounting firms. There are significant penalties for non-compliance, including incarceration and fines of up to $2 million, and CAs will not be able to plead ignorance. For full details, please refer to www.fintrac.gc.ca.
What is a financial intermediary?
Accountants and accounting firms are required to implement compliance regimes if they receive professional fees for engaging in the following activities, engage in any of the following activities on behalf of any person or entity (other than an employer), or give instructions in respect of these activities on behalf of any person or entity (other than an employer): " Receiving or paying funds; " Purchasing or selling securities, real property or business assets or entities; or " Transferring funds or securities by any means If you are an employee of a person or entity who is also subject to these requirements, your employer is responsible for the compliance regime. Similarly, if you are an agent of (or are authorized to act on behalf of) a person or entity who is also subject to these requirements, that other person or entity is responsible for the compliance regime.
What you can and should do:
- read the FAQs on this subject at www.cica.ca/index.cfm/ci_id/2081/la_id/1.htm or at FINTRAC www.fintrac.gc.ca
- educate yourself on the issue and examine its impact on you and your firm:
- audit, review and compilation services are exempt from the Act;
- the anti-money laundering legislation is rare in that it overrides the CA profession's requirement to maintain client confidentiality;
- CAs can not knowingly or unknowingly be associated with an illegal act.
- check resources (e.g., Canada's Anti-Money Laundering & Anti-Terrorist Financing Requirements - A Guide for Chartered Accountants available free at www.cica.ca/index.cfm/ci_id/8238/la_id/1.htm
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