Compliance Program of the Canadian Anti-Money Laundering Act

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A person or business must remain in adherence to the Anti-Money Laundering Act in Canada so that no legal violations occur where the company or individual will face criminal charges. Additionally, if the person is subject to adherence, he or she or the entity will need to establish and apply a compliance program.

To identify and keep records of money laundering offenses through the Criminal Code of Canada and involved Controlled Drugs and Substances Act, individuals that may have involvement in laundering money through other illegal activity may need to adhere to the program requirements. The financial intelligence unit in the country Financial Transactions and Reports Analysis Centre of Canada or FINTRAC works with the Act. It is also responsible for enforcing the AML law in Canada. The compliance program requirements received an update in adherence to the necessary actions to follow. It is essential to satisfy all requirements of the compliance program to avoid violations.

Requirements for the Compliance Program

For the program, there must exist a compliance officer. He or she is responsible for the implementation of the compliance program itself. Then, there are policies and procedures necessary to remain in adherence. These need development by the person or company with a written record. They must remain up to date and include any additions or modifications. Other requirements include a risk assessment of business activities and relationship, compliance training and effectiveness review. Training classes are to develop and maintain the programs for all employees, agents of the company and others that may acquire authorization to act on behalf of the company owner. The review is to assess the compliance program and test the effectiveness of it.

The Business in the Compliance Program

To avoid the risk that someone in a company may engage in money laundering in Canada, the compliance program may have more or fewer details and sophistication based on the size of the entity. The structure, risk of possible types of exposure to someone participating in money laundering and other crimes grows or shrinks when the company is smaller or larger. Terrorist financial activity is possible when the business is big enough that the employees and management do not see it in action. This could lead an increasingly complex compliance program to remain in adherence to Canadian law.

FINTRAC will perform regularly scheduled audits to businesses to ensure that the Canadian AML regulations are in place. It is important for the company to provide the details of the compliance program and give assurances through documentation that any changes are already in effect when necessary. If another agency or institution becomes part of the audit, the company may find other aspects analyzed or rules pushed for better compliance with the AML needs. Hiring a lawyer well-versed in these matters could provide benefit in keeping up to date with the latest changes. The legal representative may communicate with the owner what rules need modification and how best to implement them.

To Prevent Money Laundering

The Canadian government uses the anti-money laundering acts, regulations and programs to prevent employees or companies from taking part in criminal activity. By enforcing the compliance programs, the workers within the business become aware of what money laundering is and how it would harm the individual as well as the entity overall. Through education and the rules of the program, there are numerous avenues of information available. While the company is in adherence to the Act and necessary requirements, anyone that engages in money laundering could face charges or share responsibility with the company through vicarious liability.

Prevention of money laundering is a significant goal through these regulations and requirements. By educating employees, the employer may remove the potential for the illegal activity to occur. Additionally, the business may remain in adherence and perform well while following the needed rules of the Act. If any employee or part of the company does participate in money laundering crimes, the Canadian government has a higher chance of discovering the culprit when the entity he or she is a part of remains up to date with all the compliance program requirements.

Legal Help in the Compliance Program

It is important to hire a lawyer even if there is no worry about checking employees’ involvement in possible money laundering crimes. The legal representative may ensure the company remains in adherence to any changes that occur with the Act and compliance programs. This could prevent criminal charges the company could face for violations.


Disclaimer: While every effort has been made to ensure the accuracy of this publication, it is not intended to provide legal advice as individual situations will differ and should be discussed with an expert and/or lawyer.

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