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Back to business as usual for FINTRAC

Agency to end temporary pandemic measures

Federal anti-money laundering agency the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is dropping its pandemic-driven relief measures and signalling that it’s time to return to business as usual.

FINTRAC announced that it’s removing temporary supports that were adopted in response to the onset of the Covid-19 pandemic to help firms comply with their reporting obligations.

“The world is now well over a year in what has become our new normal, so it is important that reporting entities’ compliance policies and procedures align with this new normal in order to meet the requirements of [anti-money laundering laws and regulations],” it said in a release.

As of March 31, flexibility when it comes to remotely authenticating government-issued photo IDs will end, FINTRAC said.

As a result, firms will be expected to use tools in addition to human judgment to authenticate ID that is provided remotely.

“Given the shift to online interactions with clients, and prevalence of at-a-distance transactions, it is important that the right tools be used by a reporting entity to authenticate a document,” the agency said.

It also stressed the importance of firms remaining diligent in ensuring that they “know” their clients and verify their identities to help guard against money laundering and other financial crimes.

“Knowing your clients puts a reporting entity in a position to assess a proposed transaction and determine whether it aligns with what you know about that person or entity, and to assess whether there are reasonable grounds to suspect money laundering or terrorist activity financing where the transaction is outside of what is expected for that client,” it said.

Additionally, FINTRAC said that firms may have to re-verify identities that were authenticated under temporary pandemic measures, and may question certain ID verifications in compliance exams.

“However, FINTRAC will continue to consider the impact of the Covid-19 pandemic, as well as the realities of each reporting entity sector and the temporary flexibility provided, when assessing a reporting entity’s compliance… and will take a reasonable approach in its enforcement activities,” it said.

The agency noted that firms were able to continue meeting their AML reporting obligations over the past couple of years, and that it’s not aware of any “pervasive reporting challenges” due to the pandemic.

Source: Investment Executive