Anti Money Laundering /Anti Terrorist Financing & FINTRAC (Financial Transactions & Reports Analysis Center of Canada) Training Presentation

Transcription

1 Anti Money Laundering /Anti Terrorist Financing & FINTRAC (Financial Transactions & Reports Analysis Center of Canada) Training Presentation Presented by: Mary Mellin Compliance Officer June 2015

2 What is Money Laundering? Suspicious transactions Client identification What are your responsibilities as an MGA/ AGA employee? What are the penalties?

3 Introduction to the Money Trail Money Laundering the movement of money from criminal activity cycles into and then out of legitimate business. Those involved with money laundering continually develop new ways to clean dirty money. Terrorist Financing the money is often used before the crime takes place, but the transactions are equally masked and secretive. Both activities create footprints for those involved in the fight against money laundering and terrorist financing. It s called the money trail. Careful analysis of the money trail can help detect and deter money laundering and terrorist financing.

4 What is Money Laundering? Money laundering is the method where dirty money ( proceeds of crime ) is received from criminal activities, processed through legitimate businesses and is converted into clean money. Anti-money laundering means: taking steps to adequately identify funds obtained by illicit or criminal activity monitoring disbursement trends

5 Stages of Money Laundering The techniques of money laundering are varied and often highly complex. The three general stages in the process are: Placement: the proceeds of crime first enter a financial institution with the intention of making them look legitimate. Layering: moving the funds around in order to distance them from their source as criminal proceeds. Integration: funds re-enter the economy under a veil of legitimacy via a clean disbursement.

6 What is Terrorist Financing? Terrorist financing ( proceeds for crime ) is the process whereby funds (often in smaller amounts) are provided for the purpose of committing terrorist activities or for the use or benefit of a terrorist group. Anti-terrorist financing means: interrupting the flow of funds (and materials) to known and suspected terrorist individuals and entities. not doing business with persons or entities from countries sanctioned by Canada, the United Nations (UN) or cited by the Financial Action Task Force (FATF), or other applicable body.

7 Purpose of legislation in Canada The Proceeds of Crime (Money Laundering) and Terrorist Financing Act creates legal support: for measures to detect and deter money laundering and terrorist financing activities to provide law enforcement with information needed to investigate and prosecute to assist in Canada s international commitment in the fight against money laundering and terrorist financing

8 Your responsibilities AML laws apply to financial services entities, including life insurance agents, MGAs, mutual fund dealers and trust companies. Mandatory written compliance regime Verification of client identity Reporting suspicious transactions Record Keeping

9 Compliance Regime Appointment of a Compliance Officer Development and application of written compliance policies and procedures Assessment and documentation of risks of money laundering and terrorist financing, and measures to mitigate high risks Implementation and documentation of an ongoing compliance training program Documented review of the effectiveness of policies and procedures, training program and risk assessment and a plan to address any weakness identified.

10 Verification of client identity The advisor is responsible for verifying the client s identity. The MGA is responsible to ensure the appropriate client identity information has been collected and know who you are doing business with. Information must be collected on: individuals, including sole proprietors third parties determination politically exposed foreign persons determination signing officers of a corporation/partnerships/not for profit entity, and other non-corporate entities beneficial owners and Directors

11 Suspicious Transaction Reasonable grounds to suspect and report A transaction may generate a suspicion, raise questions or cause discomfort financial activity may be outside the norm for the client, and/or may be unexplainable You have reasonable grounds to suspect that it is related to the commission of a money laundering or terrorist financing offence, whether or not the transaction was actually completed Trust your instincts don t dismiss feeling of discomfort, apprehension or mistrust when reviewing applications/ transactions.you are looking for things that seem unusual given the client s profile. Escalate to your Compliance Officer. Avoid tipping off the individuals involved

12 Suspicious Transaction Reports (STRs) and Attempted Suspicious Transactions (ASTRs) You are required to: Submit within 30 days of having reasonable grounds to suspect a transaction/attempted transaction relates to money laundering or terrorist activity financing offenses. No minimum dollar threshold. Reports are submitted electronically to FINTRAC Report even if an individual does not complete the transaction Retain a copy of STR/ASTR Make a reasonable effort to determine who conducted the transaction prior to reporting Report

13 Record Keeping You must keep the following records: large cash transaction records client information records copies of official corporate documents copies of suspicious transaction reports records on beneficial ownership, control and structure records of the purpose and intended nature of your business relationships records on the measures you take to monitor your business relationships and the information you obtain as a result of your monitoring.

14 Penalties for non-compliance Failure to comply can lead to criminal charges against a reporting entity. Imprisonment from 6 months to 5 years Fines from $500,000 to $2,000,000 Administrative penalties All of the above

15 MGA/ AGA opportunity.. The MGA/AGA can help the advisor by: Assisting the advisors to understand their obligations Working with the advisors to understand how their obligations are being covered off. Assess if there are gaps in their compliance regime Monitor the advisor s business for AML/ATF trends/anomalies/patterns Provide on-going training and support for advisors and employees

16 ANNUAL TRAINING MANDATORY So Let s take a test!