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Introduction to AML/ATF Modules

Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Money Laundering Act) (the “Act”), Advisors are required to establish a compliance regime to ensure the reporting, recordkeeping and client identification requirements in the legislation are met for their practice. 

According to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), “a compliance regime is a legislative requirement and a good business practice for anyone subject to the Act and its regulations."

Your compliance regime has to include the following:

  • The appointment of a compliance officer;
  • The development and application of compliance policies and procedures. These policies and procedures have to be written and kept up to date.  If you are an entity, they also have to be approved by a senior officer;
  • An assessment and documentation of risks related to money laundering and terrorist financing, as well as the documentation and implementation of mitigation measures to deal with those risks;
  • If you have employees or agents or any other individuals authorized to act on your behalf, an on-going compliance training program for them and you. The training program has to be in writing and maintained; and 
  • A review of your compliance policies and procedures to test their effectiveness. The review has to cover your policies and procedures, your assessment of risks related to money laundering and terrorist financing and your training program. The review also has to be done every two years.

In an effort to assist our Distribution Partners with their AML/ATF requirements, we have built 5 modules using the requirements listed above that allow advisors to customize templates, which can form the basis of their compliance regime. If you complete all the modules by making adjustments to the templates and assessing risks according to your business practice, you should have the basic structure of a compliance regime that incorporates the key elements, which you can build on in the future.

Some of the modules are easier to complete than others. For example, the Risk Assessment module will take a significant amount of time, but the appointment of a compliance officer may not. 

It is important you follow the instructions and use the reference materials in each module in order to make sure you fully understand the requirements and can tailor your compliance regime to your practice. 

Once you have completed all the modules you should print your customized templates and place them in a binder where you can access it (or save electronically in a manner that is easily accessible and provides order). 

Penalties for Non-Compliance

For more information on penalties, you can consult the "Penalties for non-compliance" section of FINTRAC's website.

Failure to comply with your legislative requirements can lead to criminal charges against you. The following are some of the penalties:

  • failure to report a suspicious transaction or failure to make a terrorist property report — conviction of this could lead to up to five years imprisonment, to a fine of $2,000,000, or both.
  • failure to report a large cash transaction or an electronic funds transfer — conviction of this could lead to a fine of $500,000 for a first offence and $1,000,000 for each subsequent offence.
  • failure to retain records — conviction of this could lead to up to five years imprisonment, to a fine of $500,000, or both.
  • failure to implement a compliance regime — conviction of this could lead to up to five years imprisonment, to a fine of $500,000, or both.
  • failure to comply with your legislative requirements can also lead to the following administrative monetary penalties (AMPs) against you:
  • failure to implement any of the five elements of the compliance regime described in section 3 could lead to an administrative monetary penalty of up to $100,000 for each one.
  • failure by an entity to report the required information to senior management within 30 days after the review of its compliance program could lead to an administrative monetary penalty of up to $100,000.
  • failure to ascertain the identity of clients, keep records, monitor financial transactions and take mitigating measures in situations where risk of money laundering or terrorist financing is high could lead to an administrative monetary penalty of up to $100,000.

Disclaimer: Empire Life provides these modules to assist distribution partners in the creation of their compliance regime. It is up to the Distribution Partner to ensure he/she/it fully understands the requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Money Laundering Act). Distribution Partners are encouraged to educate themselves about their obligations by reviewing the Act and the guidelines provided by FINTRAC on their website at www.fintrac.gc.ca. Empire Life is not responsible for reviewing completed templates or determining if the templates are suitable for the Distribution Partner.