AML Legislation in Canada

The Proceeds of Crime legislation

In 1991, the Proceeds of Crime (Money Laundering) Act was brought into force in Canada to give legal effect to the FATF Forty Recommendations by establishing record keeping and client identification requirements in the financial sector to facilitate the investigation and prosecution of money laundering offences under the Criminal Code of Canada and the Controlled Drugs and Substances Act.

In 2000, the Proceeds of Crime (Money Laundering) Act was amended to expand the scope of its application and to establish a financial intelligence unit with national control over money laundering – FINTRAC.

In December 2001, the scope of the Proceeds of Crime (Money Laundering) Act was again expanded by amendments enacted under the Anti-Terrorism Act with the objective of deterring terrorist activity by cutting off sources and channels of funding used by terrorists in response to 9/11.  The Proceeds of Crime (Money Laundering) Act was renamed the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

In December of 2006, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act was further amended, in part, in response to pressure from the FATF for Canada to tighten its money laundering and financing of terrorism legislation.  The amendments expanded the client identification, record-keeping and reporting requirements for certain organizations and included new obligations to report attempted suspicious transactions and outgoing and incoming international electronic fund transfers, undertake risk assessments and implement written compliance procedures in respect of those risks.

The amendments also enabled greater money laundering and terrorist financing intelligence-sharing among enforcement agencies.

Additional legislation applicable to money laundering in Canada includes:

  • Criminal Code of Canada.
  • Cross-border Currency and Monetary Instruments Reporting Regulations.
  • Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.
  • Proceeds of Crime (Money Laundering) and Terrorist Financing Registration Regulations.
  • Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
  • Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations.
  • Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism.
  • United Nations Al-Qaida and Taliban Regulations.