Canada

CHAPTER 5. PREVENTIVE MEASURES
elements of the compliance regime. 85 A key OSFI finding is the scope of the two-year review, which is
frequently more limited to the existence of controls rather than to their effectiveness.
5
238. REs with cross-border operations include their overseas branches in their AML/CFT
program and extend their internal controls to their foreign subsidiaries. They also adopt the more
stringent of Canadian or host jurisdiction rules in their group-wide AML/CFT framework on areas
where host country requirements are stricter or more in line with FATF standards. The larger banks
reported that they had sharing information mechanisms at group level and, in cases where the local
jurisdiction had created obstacles to the information sharing, the local branches were closed.
239. Three of the D-SIBs have branches in Caribbean countries: the two REs interviewed took
specific risk mitigating measures by adopting an enterprise-wide management to the highest level.
As a result, every high-risk client in the Caribbean must be pre-approved both by senior
management in the business and the compliance officer.
240. The data provided by FINTRAC indicates an uneven level of compliance among non-FRFIs.
Credit unions and caisses populaires have good internal controls in place, which is not the case for
trust and loan companies, securities dealers, insurance sector and MSBs: several deficiencies have
been identified, including incomplete or not updated policies and procedures, the limited scope of
controls, a lack of comprehensive assessment of effectiveness, and no communication to senior
management.
241. DNFBPs other than casino and BC notaries have either no or weak internal controls. The
discussions with real estate sector representatives also revealed some concerns about the effective
control of the proper implementation of AML/CFT requirements by their agents. Some DNFBPs
professional associations are working with their members to assist them in increasing their level of
compliance and in increasing their awareness with their obligations. In this context, the associations
felt that further engagement with FINTRAC would be useful.
Overall Conclusions on Immediate Outcome 4
242. Canada has achieved a moderate level of effectiveness for IO.4.
85 Under PCMLTFR s. 71 (1), the five elements of the compliance regime are the following: appointment of a
compliance officer, development and application of written compliance policies and procedures, assessment
and documentation of ML/TF risks and of mitigating measures, written ongoing training program, a review of
the compliance policies and procedures to test their effectiveness. The review has to be done every two years.
Failure to implement any of these five elements is considered serious violation under AMPR and shall lead to
an administrative monetary penalty of up to CAD 100 000 for each one (ss 4 and 5).
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Anti-money laundering and counter-terrorist financing measures in Canada - 2016 © FATF and APG 2016