The Proceeds of Crime Money Laundering and Terrorist Financing Act was implemented in December 2001 and subsequently amended by Royal Assent in December 2006. The overall objective of the money laundering act is to detect and deter money laundering and the financing of terrorist activities and to investigate and prosecute those activities.
The Proceeds of Crime Money Laundering and Terrorist Financing Act requires reporting of certain financial transactions deemed as suspicious. A suspicious transaction is a transaction in which you have a reasonable belief the funds involved are derived from or related to a money laundering offense or a terrorist activity. The transaction includes activities that are either completed or attempted. "Reasonable grounds to suspect" is determined on a case by case basis depending on the circumstances of the transaction and normal business practices within the industry.
Certain entities are required by the act to report the suspicious transactions. These entities include financial institutions, life insurance companies, securities dealers, money services businesses, agents of the Crown, accounting firms, real estate brokers, casinos, precious metals dealers, and notaries.
A money laundering offense in Canada involves an act committed with the intent to conceal or convert property or proceeds of property with knowledge that the property or proceeds were obtained from an illegal activity. The designated offense is generally an offense under either criminal code or any other federal act but can also include tax evasion and breach of copyright. The money laundering office also extends to illegal activities that occurred outside of Canada.
Required institutions need to file a suspicious transaction report with the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, within 30 of the completed or attempted transaction. Institutions are required to identify the individual who conducted the transaction. The institution is not allowed to inform anyone, including the reported party, about the contents of the suspicious transaction report or that a report was made. If a required institution fails to file a timely suspicious transaction report, fines of up to $2 million or penalties of up to five years imprisonment are enforced by FINTRAC
FINTRAC is Canada's financial intelligence agency. The agency was created in 2000 and it is an independent agency that reports to the Minister of Finance. The mandate of the agency is to "facilitate the detection, prevention and deterrence of money laundering, terrorist activity financing and other threats to the security of Canada." The agency is recognized as one of the top financial intelligence agencies in the world fighting money laundering.
