Canada

CHAPTER 6. SUPERVISION
implement fit and proper controls. The controls are usually conducted by the RE but are subject to
oversight by the provincial regulators. These market entry controls differ between provinces and
sectors but, overall, the market entry controls being applied by provincial regulators are robust.
244. Since its last MER, Canada has implemented a money service business (MSB) registration
system under the supervision of FINTRAC. One exception to the federal system of registration is in
Quebec, where MSBs register with the Autorité des marchés financiers (AMF) and FINTRAC.
Applicants for registration undergo criminal record checks and fitness and probity checks by
FINTRAC and AMF. Individuals convicted of certain criminal offenses are ineligible to own or control
an MSB. FINTRAC monitors the control of MSBs as they are required to submit updated information
on owning or controlling individuals or entities when changes occur and again when the MSB applies
for renewal of its registration every two years. FINTRAC has refused to register applicants and has
revoked registration when the applicant was convicted for a criminal offense. An example was given
where FINTRAC revoked the registration of two MSBs after the conviction of two individuals that
owned both MSBs. Another example was provided where an MSB terminated its relationship with an
agent due to fitness and probity concerns about the agent as part of follow-up activity conducted
after an examination by FINTRAC. When an MSB registration is denied, revoked, expired, or pending,
FINTRAC follows-up appropriately, for example by conducting an offsite review or on-site visit to the
MSBs’ last known address to ensure that the entity is not operating illegally.
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245. There are market entry controls for most DNFBPs in Canada that require them to be
licensed or registered by provincial regulators or by self-regulatory bodies (SRBs). Criminal checks
are applied by supervisors and SRBs to casinos, BC notaries, accountants, and real estate brokers and
agents during the licensing or registration process. The only exception to this is in the DPMS sector
where there is no requirement to be registered or licensed or to be subjected to other forms of
controls to operate in Canada. All casinos are provincially owned and apply thorough fit and proper
procedures for employees.
246. After market entry, provincial regulators conduct some ongoing monitoring of non-FRFIs
and DNFBPs and withdraw licenses or registration for criminal violations. The assessment team was
provided with examples of restrictions or cancellations of investment dealers’ registration by the
Investment industry Regulatory Organization of Canada (IIROC) due to misconduct or a violation of
the law. However, FINTRAC does not have responsibility for the licensing or registration of FIs or
DNFBPs (apart from MSBs) and non-federal supervisors do not appear to implement the same level
of controls to monitor of non-FRFIs and DNFBPs to ensure that they are not controlled or owned by
criminals or their associates after the licensing or registration stage.
Supervisors’ understanding and identification of ML/TF risks
247. Supervisors in Canada participated in the NRA process and understand the inherent ML/TF
risks in the country. FINTRAC and OSFI have a good understanding of ML/TF risks in the financial
and DNFBP sectors.
248. FINTRAC is the primary AML/CFT supervisor for all REs in Canada and is relied upon by
provincial regulators to understand ML/TF risks within their population and to carry out AML/CFT
Anti-money laundering and counter-terrorist financing measures in Canada - 2016 © FATF and APG 2016
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