July 10, 2019
Passage of Bill C-97, the Budget Implementation Act, 2019, at the end of June has brought into force new naming rules regarding violations of provisions under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its regulations.
Under the new rules which are outlined in a revised section 73.22 of the PCMLTFA, FINTRAC no longer has discretion regarding naming, and must “as soon as feasible” publicly name the person or entity, the nature of the violation and the amount of the penalty imposed:
- If an RE is issued a notice of violation and pays the penalty;
- If an RE is issued a notice of violation and neither pays the penalty nor makes representations to FINTRAC’s Director and Chief Executive Officer within the allowable 30-day timeframe;
- If, despite representations to FINTRAC’s Director and Chief Execution Officer, an RE receives a notice of decision indicating that a violation has been committed;
- If an RE is issued a notice of violation and enters into a compliance agreement with FINTRAC; or
- If an RE is issued a notice of default because it failed to comply with a compliance agreement.
As a result of these changes, legal experts are recommending that REs consider making voluntary disclosures of any potential PCMLTFA violations to FINTRAC in advance of their next compliance examination in order to maximize opportunities for a favourable review.
FINTRAC recently undertook a comprehensive review of its Administrative Monetary Penalty (AMP)
program and made a number of revisions aimed at addressing three 2016 Federal Court decisions which found that FINTRAC had failed to provide adequate rationale for how it calculated AMPs. This legislative amendment on naming should be read in conjunction with this revised framework.