Canada

CHAPTER 5.
PREVENTIVE MEASURES
Key Findings and Recommended Actions
Key Findings
Several, but not all REs listed in the standard are subject to Canada’s AML/CFT framework:
• AML/CFT requirements were found to breach the constitutional right to attorney-client
privilege by the Supreme Court of Canada, and, as a result, are inoperative with respect to legal
counsels, legal firms, and Quebec notaries. The exclusion of these professions is not line with
the standard and raises serious concerns (e.g. in light of these professionals’ key gatekeeper
role in high-risk activities such as real-estate transactions and formation of corporations and
trusts).
• TCSPs (other than trust companies), non FI providers of open loop pre-paid card, factoring
companies, leasing and financing companies, check cashing business and unregulated
mortgage lenders, online gambling, and virtual currencies do not fall under the AML/CFT
regime, but legislative steps have been taken with respect to online gambling, open-loop prepaid
cards and virtual currencies.
FIs including the D-SIBs have a good understanding of the ML/TF risks and of their AML/CFT
obligations. While a number of FIs have gone beyond existing requirements (e.g. in correspondent
banking), technical deficiencies in some of the CDD requirements (e.g. related to PEPs) undermine
the effective detection of some very high-risk threats, such as corruption.
Requirements—on FIs only—pertaining to beneficial ownership were strengthened in 2014 but
there is an undue reliance on customers’ self-declaration for the purpose of confirming beneficial
ownership.
Although REs have gradually increased the number of STRs and threshold-based reports filed, the
number of STRs filed by DNFBPs other than casinos remains very low.
With the exception of casinos and BC notaries, DNFBPs—and real estate agents in particular—are
not adequately aware of their AML/CFT obligations.
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Recommended Actions
Canada should:
• Ensure that legal counsels, legal firms, and Quebec notaries are subject to AML/CFT
obligations when engaged in the financial transactions listed in the standard.
• Ensure that TCSPs (other than trust companies) open loop pre-paid cards, including non FI
providers, virtual currency and on line gambling to AML/CFT requirements.
• Require DNFBPs to identify and verify the identity of beneficial owners and PEP in line with
the standard.
Anti-money laundering and counter-terrorist financing measures in Canada - 2016 © FATF and APG 2016
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