It is important that CPAs stay informed of AML developments, as accounting firms play an important role in serving and protecting the public interest (Getty Images / Xsandra)

The rules for CPAs when it comes to combating money laundering are changing. In fact, a number of new requirements for persons carrying out activities covered by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act entered into force on June 1, 2021.

To help you understand what you need to know about these developments, CPA Canada has prepared two new documents, New “Know Your Client” AML / FTA Rules for CPAs, New AML / FTA Requirements Associated with record keeping and reporting to FINTRAC and Risky Business: non-compliance with AML / FTA requirements. An updated AML guide will also be published this winter.

“As reporting entities under the federal AML regime, professional accountants and accounting firms play an important role in serving and protecting the public interest,” said FCPA Michele Wood-Tweel, vice president of regulatory affairs at CPA Canada.

“It is important that CPAs are kept informed of these new developments and others that are on the horizon, such as the expected conclusion of the Cullen Commission.

Here are three of the top things to keep on your watch list. [See A timeline of select developments in AML/ATF over the past 30-plus years.]

THE CULLEN COMMISSION

Launched by the Province of British Columbia in May 2019, the Commission of Inquiry into Money Laundering in British Columbia (known as the Cullen Commission) has a broad mandate to make findings of fact and recommendations. to remedy the conditions which allowed the continued growth of silver. money laundering in British Columbia

As part of its mandate, the commission is responsible for investigating and reporting on the extent of money laundering in certain sectors, including professional services, and determining the scope and effectiveness of their systems of anti-money laundering regulations.

CPA Canada and CPABC have panel participant status and appeared as witnesses at the January 2021 hearings.

The Commission will hold closing hearings from October 15 to 19, 2021 and is expected to submit its final report to the Government of British Columbia by December 15, 2021.

KEEPING OF RECORDS AND REPORTS

Several changes to accountants and accounting firms’ reporting and bookkeeping obligations came into effect on June 1, while others were already in place.

The changes have implications for accountants and accounting firms involved in what are known as “triggering activities”, that is, on behalf of a person or entity: receiving or paying funds or virtual currency; the purchase or sale of real estate, buildings or business assets, or entities; transfer funds, virtual currency or securities by any means; or give instructions on behalf of a person or entity in connection with any of these activities.

Record Keeping: In addition to keeping a copy of every report sent to FINTRAC, accountants affected by the rules must also keep records, if any, of large cash transactions (when they receive CAD $ 10,000 or more in cash). cash); large virtual currency transactions (when they receive an amount equivalent to $ 10,000 or more); and receipt of funds (when receiving CA $ 3,000 or more).

Where applicable, accountants should also keep other types of information, such as: information required when verifying the identity of the client; their business relationship with the client (including whether the client is a politically exposed person, a leader of an international organization, a family member or close associate); and information on the beneficial owners (see the point below as well as New rules make “know your client” even more important for CPAs).

“Record keeping is important to facilitate law enforcement efforts to track money from suspected money launderers or terrorist financiers, and to comply with regulatory requirements,” says CPA Marc Tassé, professor who teaches the fight against corruption at the MBA level at the University of Ottawa.

Reporting to FINTRAC: Under previous reporting requirements, accountants and accounting firms affected by triggering activities in AML / FTA legislation were already required to file three types of reports to FINTRAC: suspicious transaction report, report terrorist property and the large cash transaction report. Report. But, as of June 1, 2021, they must also submit a Large Virtual Currency Transaction Report (LVCTR).

“The reports that accountants and accountancy firms send to FINTRAC, especially suspicious transaction reports, are critical to FINTRAC’s financial intelligence analysis,” said Tassé.

For more information on the new requirements, see New AML / ATF Requirements Associated with Record Keeping and Reporting to FINTRAC.

BENEFICIAL OWNERSHIP

For anyone involved in the fight against money laundering and other financial crimes, having access to timely and accurate information about who owns, controls or ultimately benefits a business can be a valuable resource.

Beneficial ownership disclosure requirements are evolving both at home and abroad and recent legislative changes by the federal government and some provinces (C.

“The new corporate requirements related to beneficial ownership and transparency are very relevant to the work that our members do every day with private companies, whether they are consultants, board members of administration or CFOs, ”says Wood-Tweel.

It should be noted that the 2021 federal budget also proposed to provide $ 2.1 million over two years to support the implementation of a publicly accessible business beneficial ownership registry by 2025.

In addition, under the new “know your customer” AML / ATF rules that came into effect on June 1, accountants and accounting firms involved in triggering activities are required to record beneficial owner information in certain circumstances.

REMEMBER THE KEY DATES

The new record keeping, reporting and know your client obligations came into effect on June 1, 2021, and FINTRAC has posted notices on its website explaining how it will manage the transition, including the assessment of conformity.

“If you are affected by the new requirements, it is important to get them implemented quickly, revise your compliance program and update the training,” says Wood-Tweel.

KNOW YOUR LAM

CPA Canada has a wealth of resources on anti-money laundering rules and developments, including the Cullen Commission, new “Know Your Client” requirements and new requirements associated with record keeping and reporting. reporting to FINTRAC.

In addition, improve your knowledge with our on-demand course, Anti-Money Laundering and Ethics: A Canadian and Global Perspective, to have an overview of the relevant information, tools and strategies that you need to know in order to better understand the ethical issues and challenges related to the fight against the risk of money laundering and terrorist financing.