Legislation to strengthen money-laundering laws

It would strengthen "know your client" standards, extend Fintrac's reach to money service businesses that wire money or issue travellers' cheques, increase requirements for compliance, monitoring and enforcement, and expand Fintrac's intelligence role.

The Toronto Star
October 6, 2006

Legislation to strengthen money-laundering laws
Bill would extend reach of watchdog. Suspicious transactions to face scrutiny.
John Ward

The federal government has introduced legislation to toughen laws on money laundering and terror financing, and give more teeth to the agency that monitors suspicious money movements.

The bill, if passed, would extend the reach of the Financial Transactions and Reports Analysis Centre of Canada, better known as Fintrac.

It would strengthen "know your client" standards, extend Fintrac's reach to money service businesses that wire money or issue travellers' cheques, increase requirements for compliance, monitoring and enforcement, and expand Fintrac's intelligence role.

It would also mean that banks, insurance companies, securities dealers and money service businesses would be required to identify and monitor the transactions of foreign nationals and their immediate family who hold prominent public positions.

They would also have to report people who even attempt suspicious transactions.

The law already requires organizations and people who handle major transactions - from banks and credit unions to securities dealers, foreign exchange dealers, real-estate firms and even casinos - to keep tabs on who is using their services and report questionable transactions.

They must also report any electronic international transfer of more than $10,000 and any cash transactions over $10,000.

The new legislation follows recommendations by several reviews of the five-year-old money-laundering law, including some issued this week by the Senate banking committee.

It stopped short, though, of following the Senate's suggestion that Fintrac's reach extend to jewellers, cheque-cashing and payroll- loan offices and the so-called white ATMs not attached to a bank or credit unions.

The legislation would also remove a clause from the law that tried to force lawyers to blow the whistle on suspicious transactions by their clients. Law groups won a court injunction against that provision, saying it threatened solicitor-client privilege.

The new legislation sets out ways for the government and law organizations to negotiate improved record-keeping and tighter self- regulation.

Fintrac last year uncovered more than $5 billion in suspicious deals, including $250 million in suspected terrorist financing.

CANADIAN PRESS


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