Vol. 150, No. 13 — June 29, 2016
SI/2016-35 June 29, 2016
ECONOMIC ACTION PLAN 2014 ACT, No. 1
Order Fixing the First Anniversary of the Day on which this Order is made as the Day on which Certain Provisions of the Act Come into Force
P.C. 2016-564 June 17, 2016
His Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsection 298(3) of the Economic Action Plan 2014 Act, No. 1, chapter 20 of the Statutes of Canada, 2014, fixes the first anniversary of the day on which this Order is made as the day on which subsection 256(3), section 258 and subsections 294(2) and (4) of that Act come into force.
(This note is not part of the Order.)
Legislative amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Act) were made through Economic Action Plan 2014 Act, No. 1, which received royal assent on June 19, 2014.
This Order fixes the coming into force date of subsection 256(3), section 258 and subsections 294(2) and (4) of Economic Action Plan 2014, No. 1, chapter 20 of the Statutes of Canada, 2014 as one year following the date on which the Order is registered.
This Order in Council brings into force certain provisions of the Act, which support amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (the Regulations) by
- updating and strengthening the legislation to combat money laundering and terrorist financing activities;
- strengthening customer due diligence requirements;
- closing gaps in Canada’s regime;
- improving compliance, monitoring and enforcement efforts;
- strengthening information sharing in the regime; and
- addressing technical issues.
The provisions that are being brought into force amend the Act to clarify the types of entities (e.g. online casinos) that are subject to the Act.
The provisions that are being brought into force amend the Act to add definitions of “politically exposed domestic persons” and “heads of an international organization”, and require prescribed persons and entities (i.e. financial entities, life insurance companies, money service businesses and securities dealers) subject to the Act to determine whether they are dealing with such persons, or a prescribed family member of such a person or a person who is closely associated to such a person, and, if so, to take prescribed measures (e.g. conduct a risk assessment) in respect of all such persons.
These provisions also amend the Act to require prescribed persons and entities to determine whether they are dealing with a person who is closely associated with a politically exposed foreign person, and to take prescribed measures (e.g. obtain senior management approval) in respect of such persons. They would also amend the definition of “politically exposed foreign person” to specify that foreign judges to which this definition applies are only those that are a judge in a court of superior jurisdiction.
These provisions also allow the Governor in Council to make regulations pertaining to reporting entities’ obligations to identify and take measures in respect of politically exposed foreign persons, politically exposed domestic persons or heads of international organizations, or family members or persons closely associated with such persons.
This Order in Council is required to bring into force certain legislative provisions, to support the amendments to the Regulations. These provisions were not brought into force upon royal assent of Economic Action Plan 2014 Act, No. 1 in order to allow the Regulations to be developed first. A portion of the Regulations come into force upon publication in the Canada Gazette, Part II, and the other portion would come into force one year after the date on which the Regulations are registered. The legislative provisions that are being brought into force through this Order only pertain to the portion of the Regulations that come into force one year after registration.
This Order in Council and the associated Regulations are needed to update and strengthen the Act, to combat money laundering and terrorist financing activities. Money laundering and terrorist financing are a threat to the integrity of the financial system and the security and safety of Canadians at home and abroad.
The Department of Finance publicly released a formal consultation paper in December 2011, followed by more targeted discussion papers in spring 2013, and a confidential consultation meeting on the proposed legislative amendments in fall 2013. Since the legislative amendments received royal assent in 2014, the Department of Finance has engaged in several informal discussions with a number of stakeholders over fall 2014 and winter 2015 in the course of developing the associated regulatory amendments.
In general, reporting entities are supportive of the intent behind the legislative amendments.
Financial Systems Division
Financial Sector Policy Branch
Department of Finance
90 Elgin Street