Retail payments supervision – Countdown to registration

The day is coming soon...A reminder, the designated window for PSPs to register with the bank of Canada is November 1-15, 2024. 

The Bank of Canada has now released information on how to submit applications via PSP Connect, the BOC's web portal for payment service providers.

All communications with the Bank including registration applications and document submissions must be conducted for this portal starting November 1st. The link to the portal will be available on the Bank of Canada's website on November 1st.

Below are the steps you should follow starting November 1st:

1. Create an Account on PSP Connect

2. Enter the Required information and upload documents

3. Submit your application and pay the fee

 

For more information, visit the Bank of Canada.


If you are a PSP and need help navigating registration or have any questions, please reach out to an AML Expert today contactus@theamlshop.ca

FINTRAC Online Money Service Business Registry Update

The FINTRAC online Money Services Business Registry is now live on FINTRAC’s website.

All Money Services Businesses must register with FINTRAC before they begin to operate. This applies to both Canadian MSBs and Foreign MSBs that operate within Canada. 

Please note that although the Registry is now visible, MSBs must still submit their request to register through FINTRAC’s MSB registration email: MSBRegistration@fintrac-canafe.gc.ca

Visit the Financial Transactions and Reports Analysis Centre of Canada’s (FINTRAC) website to access the registry and for more information. 

Users of the database for due diligence purposes should be cautioned that the information may not be current.

And as always, if your business needs assistance navigating the registry or figuring out if your business falls under the registration requirement, please get in touch with an AML expert today.

The AML Shop Announces its Newest Principal: Mark Ambrose

Toronto, Canada (June 27, 2024) –  Today, The AML Shop announces the further expansion of their Partner program through the appointment of Mark Ambrose as Principal, Anti-Financial Crime and Regulatory Compliance. 

Mark joins The AML Shop now as a Principal and Owner from his previous role of Senior Advisor, Financial Crime and Regulatory Compliance (The AML Shop). This move comes in parallel with the firms’ rapid growth within the banking, securities and mortgage sectors. 

Mark brings over 3 decades of experience in managing compliance risk holistically and comprehensively both internationally and in Canada for financial institutions, securities dealers and mortgage lenders. He has also successfully led consulting on complex Financial Institution FINTRAC examinations outcomes and challenging remediation projects. 

This exciting organizational change comes at the helm of the expansion and success of The AML Shop’s evolution in the AML, counter-terrorist financing, sanctions compliance, and risk management space. Since The AML Shop’s inception in 2016, the firm has served hundreds of clients across Canada and abroad, and expanded its team to 50 AML professionals, rapidly becoming Canada's leading business solution for AML compliance matters.

Bringing in its key employees as part of its new broader management structure, The AML Shop is strengthening its commitment to client service excellence, continuity, and subject matter specialization.  In 2022, The AML Shop announced their first Principal expansion through the appointment of Marcelle Dadoun (Principal, Program Design and Advisory/Retail Payment Activities Act), Adam Feldman (Principal, Risk Management and Technology) and Marie Noel (Principal, Outsourced Services and Investigations).

“We are thrilled to announce Mark’s appointment as a Principal of The AML Shop, a proven leader across governance, risk and compliance fields in financial services.  Mark is gifted at understanding people, organizations and problems which enables his development and management of thoughtful and informed solutions. His addition to our leadership team is a step forward to drive our growth as the AML shop of choice, with our continued expansion into broader areas of compliance, and to help super-serve our clients”.   Monika Cywinska, Managing Director of The AML Shop.

FINTRAC Outage Update

As we previously announced, FINTRAC has been experiencing an ongoing outage affecting reportable transactions and filings.

Recently, FINTRAC has now opened some MSB registration options, while some are still not functional.

In an update on May 17th, FINTRAC released the following web form:

Request for Money services business (MSB) and Foreign money services business (FMSB) registration

This form allows existing MSBs the ability to RENEW, UPDATE and/or CANCEL their registration. Unfortunately, the public registry and the registration portal are still not operating at this time. That means that new applications are still not being accepted at this time.

Please stay tuned to our website for updates as they become available. If you have any questions about the FINTRAC outage, how to access this new webform or want to know if the webform is relevant to your MSB, please reach out and we can help guide you.

 


RETAIL PAYMENT ACTIVITIES ACT NEW SUPERVISORY POLICIES - APRIL 2024

The Bank of Canada (the “Bank”) has released new supervisory policies under the Retail Payment Activities Act (RPAA). These policies are the Bank of Canada’s way of communicating how they intend on enforcing the RPAA with regulated entities - known as Payment Services Providers, or PSPs.  

We found a few of these policies to be important for payments businesses and have outlined them and our view of their implications below.  

PRESCRIBED SUPERVISORY INFORMATION 

The new policies set out the types of information supplied by a PSP to the Bank that cannot be used as evidence in certain court cases, and then information provided the Bank that payments companies can’t disclose further.  

These new policies are important as they lead to more certainty about how information will flow between the Bank and PSPs. For more information, please contactus@theamlshop.ca 

RECORD KEEPING

The record-keeping policy outlines what PSPs should retain to meet their obligations..

The list of record keeping requirements is extensive and includes these categories of records:

  • Operational Risk Management and Incident Response Requirements

  • Incident notification requirements

  • Holding funds

  • Other requirements to provide information to the banks include items such as annual reports, significant changes or new activity, registration changes, PSP information changes, change in prescribed information of a registration application, special audits information requests relating to assessment fees and requirements around end user funds.

As these new policies are highly intricate, our AML Experts are on Standby to help your business navigate within its specific need and context.

For further information about these new supervisory policies or anything to do with the Retail Payment Activities Act, Contact an AML expert today for advice.

FINTRAC Systems Outage Update

Earlier in March, FINTRAC released a statement that they were currently managing a cyber incident and had temporarily taken their corporate systems offline.

Per an update from FINTRAC on March 22nd, as FINTRAC works to resume its full range of operations, businesses are reminded that they must continue to identify and document all reportable transactions and be prepared to file them once systems are back online. The API report submission of Large Cash Transaction Reports (LCTR) and Large Virtual Currency Transaction Reports (LVCTR) remains available. If your organization has identified a priority suspicious transaction report (STR), please send an email to STR-DOD@fintrac-canafe.gc.ca or call the Call Centre at 1-866-346-8722 (toll free) for additional information on how to submit this report to FINTRAC.

If you are an MSB looking to register or renew with FINTRAC, or would like to make modifications to your registration, please send an email to MSBRegistration@fintrac-canafe.gc.ca, and the Centre will respond to you as soon as it is feasible to do so.

As we look to implement new processes and systems, we will communicate these to you to ensure you can submit reports and meet your reporting obligations. Until that time, no enforcement actions will result from late reporting or renewal of Money Services Business (MSB) registrations.

 What does this mean for you:

  • FINTRAC is expecting reporting entities to be prepared to file ALL transactions once the incident has been resolved. You should be keeping a log of all reportable transactions so that you are ready to file them right away.

  • If you are not sure if your STR qualifies as a “priority STR”, email FINTRAC at STR-DOD@fintrac-canafe.gc.ca and allow FINTRAC to guide you in the right direction. REMEMBER – do not provide any personal information in the email itself. FINTRAC will provide you with instructions on how to file the STR in a safe and secure manner.

  • MSBs also have an obligation to keep their registration information current and must report changes to registration information within 30 days of the change. It is important that you send an email to  MSBRegistration@fintrac-canafe.gc.ca to notify FINTRAC of any changes to your registration information to ensure you remain compliant with your obligations.

  • No enforcement actions will be taken for late reports or renewals while the systems are down. However, once the incident has been resolved, FINTRAC will expect reporting entities to resume business as usual.

If you need assistance with any of the above or have questions about FINTRAC, please reach out to our team now and they will assist.

FINTRAC OUTAGE - MARCH 4th

FINTRAC has released a statement that they are currently managing a cyber incident and have temporarily taken their corporate systems offline.  This means that LCTRs, EFTRs and STRs cannot currently be submitted. There is no indicated resolution time at the moment, however, we will keep our followers up to date as we get updates. 

If you have any questions in regards to this or other matters concerning FINTRAC, please contact one of our AML experts now at contactus@theamlshop.ca

New Retail Payment Activities Act (RPAA) Guidance Released

On February 14th, the Bank of Canada published new guidance on the Retail Payment Activities Act (RPAA).

As we have been informing our clients, under the legislation, registration with the Bank of Canada is mandatory for PSPs starting November 1st, 2024. Your registration with the Bank of Canada must be filed by November 15th, 2024. Learn more about the regulations here. 

Additionally, the Bank of Canada has recently released a step by step guide for new registrants. This guide will help applicants gather documentation and information required to complete the registration forms.  

There have also been new policies and amendments announced under this guidance. Notably, new PSPs are now obliged to new quantitative reporting when registering and on an annual basis. Conveniently, the Bank of Canada has offered guidance on how to report these metrics in their newly released policy. 

Additionally, any amendments to registration applications must be reported to the Bank of Canada. This includes any changes to information provided in your application; please note, it is the applicant’s mandatory responsibility to inform the BOC of these changes. Read more about the policy here.  

At The AML Shop, we can help PSPs register under the new regulations of the Retail Payment Activities Act and help plan for these upcoming changes. Reach out to us today to get started!

Electronic Compliance Assessment Reports

Attention Regulated Entities!

As part of its enhanced risk-based supervisory approach, FINTRAC has recently implemented the use of electronic questionnaires consisting of a self-assessment and request for compliance and business information. The questionnaires may take a variety of forms depending on the sectors, organizations, and assessment objectives and represents the diversification of tools and interventions to promote compliance.  This new process will assist FINTRAC by leveraging data to assess the effectiveness of the compliance programs and MLTF risks of reporting entities.

ECAR’s are very important for your business’ compliance program and they must be attended to.

Read our latest article on ECAR’s to learn more.

Retail payments supervision and the Bank of Canada

As you might already be aware, the final regulations related to the Retail Payment Activities Act (RPAA) were recently released. If you didn’t see them, here is a link.

RPAA will apply to payment service providers (PSP) that perform one or more of the five payment functions defined within the legislation:

  • Providing or maintaining a payment account

  • Holding funds

  • Initiating an electronic funds transfer

  • Authorizing or transmitting instructions about an electronic funds transfer

  • Clearing or settling

 

If you are a money services business (MSB) or PSP, this legislation will almost certainly apply to you. Generally, the obligations under the RPAA will require you to have an operational framework, a safeguarding client funds framework, and an incident reporting framework. The Bank of Canada (the Bank) is expecting registration to begin November 1, 2024, with full compliance expected by November 1, 2025.

 If you have not already done so, please sign up to receive updates from the Bank. You can do so here. 

The Bank is currently seeking volunteers to help with their registration pilot project.  You can sign up here until December 15th, 2023.

There are many other opportunities to get involved in the industry discussions or provide feedback. You can also contact us directly to find out more about industry participation. The more participation we can get from the community, the more likely we are to effect some real change.

Although this new legislation brings with it many compliance challenges, the AML Shop is here to help. If you are not sure how or if RPAA applies to your business, or if you have any questions, please do not hesitate to reach out to us.

PCMLTFA Regulations Amendment Announcement

This week, the expected final amendments to the PCMLTFA were announced. As expected the final amendments heavily cover mortgage entities, armoured cars and general currency movement. 


The key issues as outlined the Canada Gazette include:

  • Renewing and improving Canada’s AML/ATF regime

  • A cost recovery framework for FINTRAC compliance and related activities

  • Obligations for the Armoured Car Sector

  • Obligations for Mortgage Entities

  • Strengthening Correspondent Banking Relationships

  • Increasing cross-border currency reporting penalties

  • Streamlining requirements for sending AMP’s documents to reporting entities

  • Enhancing the MSB registration framework

  • Technical amendments

Read the full amendments via the Canada Gazette. 


Stay tuned to the AML Shop website and LinkedIn for further updates and commentary from our AML experts on how these changes may affect your business. And as always, if you need help navigating these amendments or any other AML related topic, reach out to one of our experts today at contactus@theamlshop.ca

AI & AML. Infowars - The Large Language Model Threat


The AML Shop’s Yong Li was recently featured in Money Laundering Bulletin to speak on Infowars - The Large Language Model Threat. In this article, we learn about how AI can undermine anti-money laundering and counter terrorist financing defences, including evading and attacking KYC data controls.

Yong contributes key expert insights to this discussion and provides recommendations on what vendors, regulators and obligated entities may need to enforce to prevail in the use and abuse of AI in Money Laundering and AML.

The top 10 ML/TF indicators in the real estate sector

The Canadian real estate sector has become a hotbed for criminal activity, with money laundering (ML) and terrorist financing (TF) posing a significant threat to its integrity.

Compliance with the regulatory framework is of utmost importance to thwart these risks and preserve the sanctity of this sector.

We have put together an article outlining the 10 unique and potent suspicious indicators that can be used to identify potential ML/TF in the real estate sector.

Regulations for the RPAA Comment Period - ends March 28th, 2023

On March 7th 2023, the Retail Payment Activities Act Committee (RPAC) held a meeting to discuss proposed Regulations for the Retail Payment Activities Act, as published in Part I of the Canada Gazette.

We want to extend a reminder to you that the comment period is open and ends on March 28th, 2023. 

At The AML Shop, our experts are busy reviewing and curating analysis with the CMSBA to drive forth feedback to the committee. We would like to call out to our Subject Matter Experts and other followers to supply any important feedback to us that you would like to be communicated to the Bank of Canada; we will consider your feedback in our analysis to determine our final comments.

A full summary of notes from the RPAC meeting is here

You may forward your feedback and comments to contactus@theamlshop.ca and as always, if you have any questions or need help with your AML compliance, be sure to reach out.

The AML Shop in Money Laundering Bulletin

The AML Shop Team (Isabelle Birebent, Etienne Noel and Yong Li) have extended their expert insights in the area of KYC and Due Diligence when it comes to confirming personal details via external sources, in the Money Laundering Bulletin article "External data sources: key inputs for compliance and investigations".

Learn here what AML Experts suggest as the best tips for confirming personal details of suspected money-launderers by way of external sources, including google searches, reddit, internet archives and the dark web.

Welcome to the Mortgage Sector Video

Soon Mortgage Brokers and Companies will be regulated under the PCMLTFA. Recent draft regulations have been set forth, with expected regulatory changes to come later this year. This means that the mortgage sector in Canada will soon be covered by federal anti-money laundering legislation. Mortgage companies will likely be expected to have a compliance plan in place within 10-15 months.

We have recorded this helpful video which outlines what this means for the mortgage sector and the best-practices for developing an AML compliance program.

If you know someone working in the mortgage space, please share this video and don't hesitate to reach out to us should you have any questions contactus@theamlshop.ca