Canada

CHAPTER 5. PREVENTIVE MEASURES
• Require FIs to implement preventive measures with respect to PEPs, and wire transfers in line
with the FATF standards, and monitor (e.g. through targeted inspections) and ensure
compliance by all FIs of their obligation to confirm the accuracy of beneficial ownership in
relation to all customers.
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• Enhance the dialogue with DNFBPs other than casinos to increase their understanding of their
respective ML/TF vulnerabilities and AML/CFT obligations, in particular with real estate
agents, dealers in precious metals and stones (DPMS) (with greater involvement of the
provincial regulators and the relevant trade and professional associations). Update ML/TF
typologies and specific red flags addressed to the different categories of DNFBPs to assist in
the detection of suspicious transactions.
• Consider introducing a licensing or registration regime, or other controls for DPMS.
• Monitor and ensure DNFBPs’ and small retail MSBs’ compliance with TFS obligations.
• Issue further guidance, especially to non-FRFIs, on the new requirements related to domestic
PEPs.
• Strengthen feedback to small banks and the insurance sector on the use of STRs.
• Issue guidance for all REs to facilitate the detection of the possible misuse of open loop prepaid
cards in ML and TF schemes.
The relevant Immediate Outcome considered and assessed in this chapter is I04. The
recommendations relevant for the assessment of effectiveness under this section are R9-23.
Immediate Outcome 4 (Preventive Measures)
Understanding of ML/TF Risks and the Application of Mitigating Measures
205. The level of understanding of ML/TF risks and AML/CFT obligations, as well as the
application of mitigating measures vary greatly amongst the various REs.
206. FIs are aware of the main threats and high-risk sectors identified in the NRA, as well as of
the level of ML/TF vulnerabilities associated to their activities. Recent trends in the FIs’
understanding of risks and AML/CFT obligations is not immediately apparent in the supervisory
data (because the latter aggregates as “partial deficiencies” both minor and more severe failures),
but, according to the authorities, have been positive. The major banks have developed
comprehensive group-wide risk assessments and implement mitigating measures derived from
detailed consideration of all relevant risk factors (including lines of business, products, services,
delivery channels, customer profiles). Several other FIs stated that their risk assessment and
mitigating measures are already in line with the findings of the NRA. Specific attention is paid to cash
(including potentially associated to tax evasion) and to the geographic risk (which, especially in the
case of large banks, takes into account the index of corruption developed by relevant international
organization and includes offshore financial centres). Some FIs also consider trust accounts held by
lawyers and other legal professions as presenting a higher risk and, as a result, conduct enhanced
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Anti-money laundering and counter-terrorist financing measures in Canada - 2016 © FATF and APG 2016