Canada

TECHNICAL COMPLIANCE ANNEX
they were considered subject to AML/CFT obligations. Subsequently, these casinos started sending
to FINTRAC Casino Disbursement Reports (for example, FINTRAC has received 988 such reports in
the last 24 months). Nevertheless, the amendment to the definition of casinos that makes reference
to online gambling operators is not yet entered into force. 114
There are also land-based gaming and on line gambling 115 sites actually operating within Quebec,
whose legal status is unclear which are not supervised by the province and which are not subject to
AML/CFT obligations. These activities are authorized by the Kahnawake Gaming Commission
operating on the basis of an asserted jurisdiction by the Mohawks over their territory. They are
considered illegal by the authorities. Offshore gambling sites are deemed to be illegal as each casino
must be licensed by a Canadian province. The authorities clarified that these activities are a matter
for law enforcement to oversee.
Cruise ships that offer gambling facilities in Canadian waters are not obliged entities for AML/CFT
purposes. (See 2008 MER, para. 1186-1187). Lottery schemes cannot be operated within five
nautical miles of a Canadian port at which the ship calls (s.207.1 of the CC). Of note, there are no
Canadian cruise ships. The exemption of cruise ship casinos is based on a proven low risk.
Trust and company services are provided by trust companies, legal counsels, legal firms and
accountants—the PCMLTFA therefore does not identify TCSPs separately. Twenty-two trust
companies (covered by a provincial Act, falling under of PCMLTFA, s.5(e)) are subject to AML/CFT
obligations, but lawyers and accountants are not, despite the high vulnerability rating highlighted in
the NRA. 116
Recommendation 22 – DNFBPs: Customer due diligence
In the 2008 MER, Canada was rated NC with these requirements due to deficiencies in the scope of
DNFBPs covered and in CDD and record-keeping requirements. Since then, Canada has extended the
scope of the AML/CFT requirements to BC Notaries and DPMS and addressed some deficiencies in
CDD requirements applicable to DNFBPs. 117
Criterion 22.1— Scope issue: Internet casinos, TCSPs are not covered and the relevant provisions
are inoperative with respect to legal counsels, legal firms and Quebec notaries (PCMLTFR, ss.33.3,
Technical compliance Annex
114 Steps are being taken in this respect. Bill C-31 introduced legislative amendments to PCMLTFA s.5 k 1,
which will come into force once the regulations are finalized, aimed at establishing AML/CFT obligations for
online gambling conducted and managed by the provinces and covering those lottery schemes other than
bingo and the sale of lottery tickets that are conducted and managed by provinces in accordance with CC,
s.207(1)(a). These amendments will also extend the notion of relevant business to include other electronic
devices similar to slot machines (such as video lottery terminals, currently excluded from the AML/CFT
regime) but establishing a relevant threshold of “more than 50 machines per establishment” (PCMLTFA,
s.5(k)(ii)).
115 Online gaming operators that are licensed by the Commission must be hosted at Mohawk Internet
Technologies, a data centre, located within the Mohawk Territory of Kahnawake.
116 NRA, p.32.
117 In particular, introducing the obligation to collect information on the purpose and intended nature of the
business relationship and ongoing due diligence, extending the circumstances in which CDD is required,
providing for enhanced measures in higher risk scenarios, excluding the exemption regime in case of suspicion.
Anti-money laundering and counter-terrorist financing measures in Canada - 2016 © FATF and APG 2016
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