Money laundering poses major threats to Canada's security and financial system. Money laundering is a complex and confidential structure. Canada aims to prevent financial crimes with anti-money laundering regimes from past to present.
Canada has two main laws for preventing money laundering and terrorist financing. The Criminal Code and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) play an active role in Canada's AML regime. The Criminal Code's obligations cover all individuals and businesses. The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) include the institutions under obligation. In Canada, financial institutions, credit companies, insurance companies, casinos, and real estate brokers are required to comply with these AML laws.
In Canada, people who do not comply with AML laws are subject to heavy fines and prison sentences under the Criminal Code and Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
Canada's AML regulations changed in 2019 due to the development of technologies in the financial services area and the proliferation of financial crime types. With the new regulations, Canada took more modern measures against money laundering and became compliant with FATF recommendations. With new regulations, regulated entities will need to make some changes to the AML programs. With the new regulations, the measures that organizations should take for PEPs must increase. Politically exposed persons are high-risk customers for financial institutions. Organizations in Canada are expected to take an active role in combating financial crime by applying a risk-based approach.
There are several organizations established in Canada within the scope of the fight against money laundering. FINTRAC is central to these organizations. Canada has established The Financial Transactions and Reports Analysis Center of Canada (FINTRAC) to effectively combat financial crimes. Businesses with AML obligations in Canada have report suspicious transactions to FINTRAC. FINTRAC analyzes these reports and takes measures. FINTRAC reports to the Canadian Ministry of Finance as an independent organization. FINTRAC has the mandate to regulate and supervise agencies responsible for strengthening AML regimes. FINTRAC represents Canada in the field of international AML and collaborates with other regulators.
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