Vol. 141, No. 13 — June 27, 2007

Registration
SOR/2007-122 June 7, 2007

PROCEEDS OF CRIME (MONEY LAUNDERING) AND TERRORIST FINANCING ACT

Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (2007-1)

P.C. 2007-919 June 7, 2007

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to subsection 73(1) (see footnote a) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (see footnote b), hereby makes the annexed Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (2007–1).

REGULATIONS AMENDING CERTAIN REGULATIONS MADE UNDER THE PROCEEDS OF CRIME (MONEY LAUNDERING) AND TERRORIST FINANCING ACT (2007–1)

PROCEEDS OF CRIME (MONEY LAUNDERING) AND TERRORIST FINANCING SUSPICIOUS TRANSACTION REPORTING REGULATIONS

1. (1) The definitions "electronic funds transfer", "financial entity" and "money services business" in subsection 1(2) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations (see footnote 1) are replaced by the following:

"electronic funds transfer" means the transmission — through any electronic, magnetic or optical device, telephone instrument or computer — of instructions for the transfer of funds, other than the transfer of funds within Canada. In the case of SWIFT messages, only SWIFT MT 103 messages are included. (télévirement)

"financial entity" means an authorized foreign bank as defined in section 2 of the Bank Act in respect of its business in Canada or a bank to which that Act applies, a cooperative credit society, savings and credit union or caisse populaire that is regulated by a provincial Act, an association that is regulated by the Cooperative Credit Associations Act, a company to which the Trust and Loan Companies Act applies and a trust company or loan company regulated by a provincial Act. It includes a department or agent of Her Majesty in right of Canada or of a province when the department or agent is carrying out an activity referred to in paragraph 8(a). (entité financière)

"money services business" means a person or entity referred to in paragraph 5(h) of the Act. (entreprise de transfert de fonds ou de vente de titres négociables)

(2) Subsection 1(2) of the Regulations is amended by adding the following in alphabetical order:

"listed person" has the same meaning as in section 1 of the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism. (personne inscrite)

2. Section 2 of the Regulations is replaced by the following:

2. For the purposes of these Regulations, a person acting on behalf of their employer is considered to be acting on behalf of a third party except when the person is depositing cash into the employer's business account.

3. Section 4 of the Regulations is repealed.

4. (1) The portion of subsection 6(1) of the Regulations before paragraph (a) is replaced by the following:

6. (1) Subject to subsections (2) and (3), every accountant and every accounting firm is subject to Part 1 of the Act when they

(2) The portion of paragraph 6(1)(a) of the French version of the Regulations before subparagraph (i) is replaced by the following:

a) lorsqu'ils exercent l'une ou l'autre des activités ci-après pour le compte d'une personne ou entité :

(3) Paragraph 6(1)(b) of the French version of the Regulations is replaced by the following:

b) lorsqu'ils donnent des instructions pour le compte d'une personne ou entité à l'égard de l'une ou l'autre des activités visées à l'alinéa a);

(4) Subsection 6(1) of the Regulations is amended by adding the word "or" at the end of paragraph (a), by striking out the word "or" at the end of paragraph (b) and by repealing paragraph (c).

(5) Subsection 6(2) of the Regulations is replaced by the following:

(2) Subsection (1) does not apply in respect of an accountant when they engage in any of the activities referred to in paragraph (1)(a) or (b) on behalf of their employer.

5. Section 7 of the Regulations is replaced by the following:

7. Every real estate broker or sales representative is subject to Part 1 of the Act when they act as an agent in respect of the purchase or sale of real estate.

6. Section 9 of the Regulations is replaced by the following:

9. (1) Subject to section 11, a report under section 7 of the Act concerning a financial transaction or an attempted financial transaction in respect of which there are reasonable grounds to suspect that the transaction or attempted transaction is related to the commission of a money laundering offence or a terrorist activity financing offence shall contain the information set out in Schedule 1.

(2) The report shall be sent to the Centre within 30 days after the person or entity or any of its employees or officers first detects a fact respecting a financial transaction or an attempted financial transaction that constitutes reasonable grounds to suspect that the transaction or attempted transaction is related to the commission of a money laundering offence or a terrorist activity financing offence.

7. The heading before section 10 of the Regulations is replaced by the following:

REPORT MADE UNDER SECTION 83.1 OF THE CRIMINAL CODE OR UNDER SECTION 8 OF THE REGULATIONS IMPLEMENTING THE UNITED NATIONS RESOLUTIONS ON THE SUPPRESSION OF TERRORISM

8. Section 11 of the Regulations is replaced by the following:

11. (1) Where a transaction is required to be reported under section 7 or 7.1 of the Act, the requirement to report information set out in Schedule 1 or 2 does not apply to a person or entity in respect of information set out in an item of that Schedule that is not marked with an asterisk if, after taking reasonable measures to do so, the person or entity is unable to obtain the information.

(2) Despite subsection (1), in the case of an attempted transaction, the requirement to report information set out in Schedule 1 does not apply to a person or entity in respect of information set out in an item of that Schedule that is marked with an asterisk if, after taking reasonable measures to do so, the person or entity is unable to obtain the information.

9. The Regulations are amended by adding the following after section 12:

SUSPICIOUS TRANSACTION OR ATTEMPTED TRANSACTION REPORT

12.1 Every person or entity who submits to the Centre a Suspicious Transaction or Attempted Transaction Report set out in Schedule 1 shall keep a copy of the report.

10. (1) Subparagraph 13(a)(iii) of the Regulations is replaced by the following:

(2) Paragraph 13(a) of the Regulations is amended by striking out the word "and" at the end of subparagraph (vi) and by replacing subparagraph (vii) with the following:

(3) The portion of paragraph 13(b) of the Regulations before subparagraph (i) is replaced by the following:

(b) in the case of a financial transaction or an attempted financial transaction, the following information, namely,

(4) Subparagraphs 13(b)(iii) to (vi) of the French version of the Regulations are replaced by the following:

(5) Paragraph 13(b) of the Regulations is amended by striking out the word "and" at the end of subparagraph (v) and by adding the following after subparagraph (vi):

11. The section references after the heading "SCHEDULE 1" in Schedule 1 to the Regulations are replaced by the following:

(Subsection 9(1) and sections 11 and 12.1)

12. Part B of Schedule 1 to the Regulations is amended by adding the following after item 7:

8.^* Whether the transaction has been completed or not

9.^* If transaction not completed, the reason why it was not completed

13. Item 5 of Part C of Schedule 1 to the French version of the Regulations is replaced by the following:

5.^* La devise dans laquelle les opérations sont effectuées ou tentées sur le compte

14. The heading of Part D of Schedule 1 to the Regulations is replaced by the following:

PART D — Information on Person Conducting or Attempting to Conduct Transaction

15. The Regulations are amended by replacing the word "transaction" with the words "transaction or attempted transaction" wherever it occurs in the following provisions:

(a) the heading of Schedule 1;

(b) the heading of Part A of Schedule 1;

(c) item 2 of Part A of Schedule 1;

(d) item 4 of Part A of Schedule 1;

(e) the heading of Part B of Schedule 1;

(f) items 1 and 2 of Part B of Schedule 1;

(g) item 4 of Part B of Schedule 1;

(h) item 7 of Part B of Schedule 1;

(i) item 14 of Part F of Schedule 1; and

(j) item 1 of Part G of Schedule 1.

16. The Regulations are amended by replacing the word "conducted" with the words "conducted or attempted" wherever it occurs in the following provisions:

(a) item 6 of Part B of Schedule 1;

(b) the heading of Part E of Schedule 1; and

(c) the heading of Part F of Schedule 1.

17. The Regulations are amended by replacing the words "terrorist group" with the words "terrorist group or listed person" wherever they occur in the following provisions:

(a) the heading of Schedule 2;

(b) items 2 to 6 of Part B of Schedule 2; and

(c) item 7 of Part E of Schedule 2.

18. The French version of the Regulations is amended by replacing the words "de l'opération" and "opération" with the words "de l'opération ou de la tentative d'opération" and "opération ou tentative d'opération", respectively, wherever they occur in the following provisions:

(a) item 3 of Part B of Schedule 1; and

(b) item 5 of Part B of Schedule 1.

PROCEEDS OF CRIME (MONEY LAUNDERING) AND TERRORIST FINANCING REGULATIONS

19. (1) Subsection 1(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (see footnote 2) is replaced by the following:

1. (1) The following definitions apply in the Act and in these Regulations.

"casino" means a person or entity that is licensed, registered, permitted or otherwise authorized to do business under any of paragraphs 207(1)(a) to (g) of the Criminal Code and that conducts its business activities in a permanent establishment

(a) that the person or entity holds out to be a casino and in which roulette or card games are carried on; or

(b) where there is a slot machine, which, for the purposes of this definition, does not include a video lottery terminal.

It does not include a person or entity that is a registered charity as defined in subsection 248(1) of the Income Tax Act and is licensed, registered, permitted or otherwise authorized to carry on business temporarily for charitable purposes, if the business is carried out in the establishment of the casino for not more than two consecutive days at a time under the supervision of the casino. (casino)

"shell bank" means a foreign financial institution that does not have a physical presence in any country, unless it is controlled by or is under common control with a depository institution, credit union or foreign financial institution that maintains a physical presence in Canada or in a foreign country. (banque fictive)

(2) The definitions "electronic funds transfer", "money services business" and "securities dealer" in subsection 1(2) of the Regulations are replaced by the following:

"electronic funds transfer" means the transmission — through any electronic, magnetic or optical device, telephone instrument or computer — of instructions for the transfer of funds, other than the transfer of funds within Canada. In the case of SWIFT messages, only SWIFT MT 103 messages are included. (télévirement)

"money services business" means a person or entity referred to in paragraph 5(h) of the Act. (entreprise de transfert de fonds ou de vente de titres négociables)

"securities dealer" means a person or entity that is authorized under provincial legislation to engage in the business of dealing in securities or any other financial instruments or to provide portfolio management or investment advising services. (courtier en valeurs mobilières)

(3) The definition "financial entity" in subsection 1(2) of the English version of the Regulations is replaced by the following:

"financial entity" means an authorized foreign bank as defined in section 2 of the Bank Act in respect of its business in Canada or a bank to which that Act applies, a cooperative credit society, savings and credit union or caisse populaire that is regulated by a provincial Act, an association that is regulated by the Cooperative Credit Associations Act, a company to which the Trust and Loan Companies Act applies and a trust company or loan company regulated by a provincial Act. It includes a department or agent of Her Majesty in right of Canada or of a province when the department or agent is carrying out an activity referred to in section 45. (entité financière)

(4) Subparagraph (a)(ii) of the definition "large cash transaction record" in subsection 1(2) of the Regulations is replaced by the following:

(5) Subsection 1(2) of the Regulations is amended by adding the following in alphabetical order:

"correspondent banking relationship" has the same meaning as in subsection 9.4(3) of the Act. (relation de correspondant bancaire)

"physical presence" means, in respect of a foreign financial institution, a place of business that is maintained by the institution, is located at a fixed address in a country in which the institution is authorized to conduct banking activities — at which address it employs one or more individuals on a full-time basis and maintains operating records related to its banking activities — and is subject to inspection by the banking authority that licensed the institution to conduct banking activities. (présence physique)

"receipt of funds record" means, in respect of a transaction in which an amount of funds is received, a record that contains the following information:

20. The Regulations are amended by adding the following after section 1:

1.1 For the purpose of the definition "politically exposed foreign person" in subsection 9.3(3) of the Act, the prescribed family members of a politically exposed foreign person are

(a) the person's spouse or common-law partner;

(b) a child of the person;

(c) the person's mother or father;

(d) the mother or father of the person's spouse or common-law partner; and

(e) a child of the person's mother or father.

NON-APPLICATION OF CERTAIN PROVISIONS

1.2 Sections 11.1, 12, 13, 14, 14.1, 15.1, 53.1, 54, 54.1 and 54.2 do not apply in respect of the credit card acquiring activities of a financial entity.

21. (1) Section 3 of the Regulations is renumbered as subsection 3(1) and is amended by adding the following:

(2) For greater certainty, subsection (1) does not apply in respect of an electronic funds transfer sent to two or more beneficiaries where the transfer is requested by

(a) a public body or a corporation referred to in paragraph 62(2)(b); or

(b) an administrator of a pension fund that is regulated by or under an Act of Parliament or of the legislature of a province.

(2) Paragraph 3(2)(a) of the Regulations, as enacted by subsection (1) , is replaced by the following:

(a) a public body or a corporation referred to in paragraph 62(2)(m); or

22. Section 7 of the Regulations is replaced by the following:

7. For the purposes of these Regulations, a person acting on behalf of their employer is considered to be acting on behalf of a third party except when the person is depositing cash into the employer's business account.

23. (1) Subsection 9(1) of the Regulations is replaced by the following:

9. (1) Subject to subsections (4) and (4.1), every person or entity that is required to keep a signature card or an account operating agreement in respect of an account under these Regulations shall, at the time that the account is opened, take reasonable measures to determine whether the account is to be used by or on behalf of a third party.

(2) Section 9 of the Regulations is amended by adding the following after subsection (4):

(4.1) Subsection (1) does not apply in respect of an account that is opened by a financial entity for use in relation to a credit card acquiring business.

(3) The portion of subsection 9(5) of the Regulations before paragraph (a) is replaced by the following:

(5) Subsection (2) does not apply where a securities dealer is required to keep an account operating agreement in respect of an account of a person or entity that is engaged in the business of dealing in securities only outside of Canada and where

(4) Paragraph 9(5)(a) of the Regulations is replaced by the following:

(a) the account is in a country that is a member of the Financial Action Task Force;

(5) Paragraph 9(5)(c) of the Regulations is replaced by the following:

(c) the account is in a country that is not a member of the Task Force referred to in paragraph (a) and has not implemented the recommendations of the Task Force relating to customer identification but, at the time that the account is opened, the securities dealer has ascertained the identity of all third parties relating to the account as described in subsection 64(1).

24. The Regulations are amended by adding the following after section 10:

INFORMATION ON BENEFICIARIES

25. The Regulations are amended by adding the following after section 11:

INFORMATION ON DIRECTORS OR PARTNERS OR ON PERSONS WHO OWN OR CONTROL 25 PER CENT OR MORE OF A CORPORATION OR OTHER ENTITY

11.1 (1) Every financial entity or securities dealer that is required to confirm the existence of an entity in accordance with these Regulations when it opens an account in respect of that entity, every life insurance company or life insurance broker or agent that is required to confirm the existence of an entity in accordance with these Regulations and every money services business that is required to confirm the existence of an entity in accordance with these Regulations when it enters into an ongoing electronic funds transfer, fund remittance or foreign exchange service agreement with that entity, or a service agreement for the issuance or redemption of money orders, traveller's cheques or other similar negotiable instruments, shall, at the time the existence of the entity is confirmed, take reasonable measures to obtain and, if obtained, keep a record of

(a) where the confirmation is in respect of a corporation, the name and occupation of all directors of the corporation and the name, address and occupation of all persons who own or control, directly or indirectly, 25 per cent or more of the shares of the corporation; and

(b) where the confirmation is in respect of an entity other than a corporation, the name, address and occupation of all persons who own or control, directly or indirectly, 25 per cent or more of the entity.

(2) Where the person or entity is not able to obtain the information referred to in subsection (1), the person or entity shall keep a record that indicates the reason why the information could not be obtained.

(3) Where the entity the existence of which is being confirmed by a person or entity under subsection (1) is a not-for-profit organization, the person or entity shall determine, and keep a record that sets out, whether that entity is

(a) a charity registered with the Canada Revenue Agency under the Income Tax Act; or

(b) an organization, other than one referred to in paragraph (a), that solicits charitable financial donations from the public.

26. (1) The portion of subsection 12(1) of the Regulations before paragraph (a) is replaced by the following:

12. (1) Subject to section 50 and subsection 52(1), every financial entity shall report the following transactions and information to the Centre:

(2) Subsections 12(3) and (4) of the Regulations are replaced by the following:

(3) Paragraph (1)(b) applies in respect of a financial entity that orders a person or entity, to which subsection (1), 28(1) or 40(1) applies, to send out of Canada an electronic funds transfer made at the request of a client, unless it provides that person or entity with the name and address of that client.

(4) Subject to subsection (5), for greater certainty, paragraph (1)(c) does not apply when the financial entity receives an electronic funds transfer from a person or entity in Canada, even if the initial sender is outside Canada.

(5) Paragraph (1)(c) applies in respect of a financial entity that receives an electronic funds transfer for a beneficiary in Canada from a person or entity to which subsection (1), 28(1) or 40(1) applies where the initial sender is outside Canada, unless the electronic funds transfer contains the name and address of that beneficiary.

27. (1) The portion of section 14 of the Regulations before paragraph (a) is replaced by the following:

14. Subject to subsection 62(2), every financial entity shall keep the following records in respect of an account other than a credit card account:

(2) Paragraph 14(c) of the Regulations is replaced by the following:

(c) where it opens an account in the name of a client that is a person or an entity other than a corporation, a record of the name and address of the client and

(c.1) in respect of every account that it opens, a record that sets out the intended use of the account;

(3) Section 14 of the Regulations is amended by striking out the word "and" at the end of paragraph (i) and by adding the following after paragraph (j):

(k) where it receives an amount of $3,000 or more from a person or from an entity other than a financial entity in consideration of the issuance of traveller's cheques, money orders or similar negotiable instruments, a record of the amount received, the date it was received, the name and address of the person who in fact gave the amount and whether the amount received was in cash, cheques, traveller's cheques, money orders or other similar negotiable instruments;

(l) where, in a single transaction, it redeems one money order of $3,000 or more, or two or more money orders that, taken together, add up to a total of $3,000 or more, a record of the total amount of the money order or orders, the date on which the money order or orders were redeemed, the name and address of the person who made the request for the money order or orders to be redeemed and the name of the issuer of each money order;

(m) where, at the request of a client, it sends an electronic funds transfer, as prescribed by subsection 66.1(2), in an amount of $1,000 or more, a record of

(n) where it has obtained approval under paragraph 67.1(b) to keep the account of a person that has been determined to be a politically exposed foreign person open, a record of

(o) where a transaction has been reviewed under subsection 67.2(2), a record of

28. The Regulations are amended by adding the following after section 14:

14.1 Subject to subsection 62(2), every financial entity shall, in respect of every credit card account that it opens, keep a credit card account record that includes

(a) where the account is opened in the name of a client that is a person or an entity other than a corporation, the name and address of the client and

(b) where the account is opened in the name of a client that is a corporation, a copy of the part of official corporate records that contains any provision relating to the power to bind the corporation in respect of the account;

(c) the name, address and telephone number of every holder of a credit card for the account;

(d) the date of birth of every holder of a credit card for the account, if that information is known after reasonable measures have been taken by the financial entity to obtain it;

(e) every credit card application that the financial entity receives from the client in the normal course of business;

(f) a copy of every credit card statement that the financial entity sends to the client, if the information in the statement is not readily obtainable from other records that are kept and retained by it under these Regulations; and

(g) where the financial entity has obtained approval under paragraph 67.1(b) to keep the account of a person that has been determined to be a politically exposed foreign person open

29. The Regulations are amended by adding the following after section 15:

15.1 (1) For the purposes of subsections 9.4(1) and (3) of the Act, the prescribed foreign entity is a foreign financial institution.

(2) Every financial entity shall, when it enters into a correspondent banking relationship, keep a record in respect of the foreign financial institution containing the following information and documents:

(a) the name and address of the foreign financial institution;

(b) the names of the directors of the foreign financial institution;

(c) the primary business line of the foreign financial institution;

(d) a copy of the most recent annual report or audited financial statement of the foreign financial institution;

(e) a copy of the foreign financial institution's banking licence, banking charter, authorization or certification to operate from the relevant regulatory agency or certificate of corporate status or a copy of another similar document;

(f) a copy of the correspondent banking agreement or arrangement, or product agreements, defining the respective responsibilities of each entity;

(g) the anticipated correspondent banking account activity of the foreign financial institution, including the products or services to be used;

(h) a statement from the foreign financial institution that it does not have, directly or indirectly, correspondent banking relationships with shell banks; and

(i) a statement from the foreign financial institution that it is in compliance with anti-money laundering and anti-terrorist financing legislation in its own jurisdiction.

(3) The financial entity shall take reasonable measures to ascertain whether the foreign financial institution has in place anti-money laundering and anti-terrorist financing policies and procedures, including procedures for approval for the opening of new accounts and, if not, shall, for the purpose of detecting any transactions that are required to be reported to the Centre under section 7 of the Act, take reasonable measures to conduct ongoing monitoring of all transactions conducted in the context of the correspondent banking relationship.

(4) For greater certainty, section 14 does not apply in respect of an account opened for a foreign financial institution in the context of a correspondent banking relationship.

30. (1) The portion of section 17 of the Regulations before paragraph (a) is replaced by the following:

17. Subject to section 20.2 and subsection 52(1), every life insurance company or life insurance broker or agent who receives from a client an amount in cash of $10,000 or more in the course of a single transaction shall report the transaction to the Centre, together with the information referred to in Schedule 1, except

(2) Paragraph 17(b) of the Regulations is replaced by the following:

(b) in respect of transactions referred to in subsection 62(2).

31. (1) The portion of section 18 of the Regulations before paragraph (a) is replaced by the following:

18. Subject to section 20.2 and subsection 52(2), every life insurance company or life insurance broker or agent shall keep a large cash transaction record in respect of every amount in cash of $10,000 or more that is received from a client in the course of a single transaction, unless

(2) Paragraph 18(b) of the Regulations is replaced by the following:

(b) the transaction is a transaction referred to in subsection 62(2).

32. Sections 19 and 20 of the Regulations are replaced by the following:

19. (1) Subject to section 20.2 and subsection 62(2), every life insurance company or life insurance broker or agent shall keep a client information record for every purchase from the company, broker or agent of an immediate or deferred annuity or a life insurance policy for which the client may pay $10,000 or more over the duration of the annuity or policy, regardless of the means of payment.

(2) Subject to section 20.2 and subsection 62(2), in the case of a life insurance policy that is a group life insurance policy or in the case of a group annuity, the client information record shall be kept in respect of the applicant for the policy or annuity.

20. Subject to section 20.2, every life insurance company or life insurance broker or agent who keeps a client information record in respect of a corporation under subsection 19(1) shall also keep a copy of the part of official corporate records that contains any provision relating to the power to bind the corporation in respect of transactions with the life insurance company or life insurance broker or agent, if the copy of that part is obtained in the normal course of business.

20.1 Subject to section 20.2, every life insurance company or life insurance broker or agent shall keep a record of the following information when a transaction is reviewed under subsection 67.2(2):

(a) the office or position in respect of which the person initiating the transaction is determined to be a politically exposed foreign person;

(b) the source, if known, of the funds that are used for the transaction;

(c) the date of the determination that the person is a politically exposed foreign person;

(d) the name of the member of senior management who reviewed the transaction; and

(e) the date the transaction was reviewed.

20.2 Sections 17 to 20.1 do not apply to a life insurance company or a life insurance broker or agent when they are dealing in reinsurance.

33. (1) The portion of subsection 23(1) of the Regulations before paragraph (a) is replaced by the following:

23. (1) Subject to subsection 62(2), every securities dealer shall keep the following records:

(2) Paragraph 23(1)(a) of the Regulations is amended by striking out the word "and" at the end of subparagraph (i) and by repealing subparagraph (ii).

(3) Subsection 23(1) of the Regulations is amended by adding the following after paragraph (a):

(a.1) in respect of every account that the securities dealer opens, a record that sets out the intended use of the account;

(4) Subsection 23(1) of the Regulations is amended by striking out the word "and" at the end of paragraph (d), by adding the word "and" at the end of paragraph (e) and by adding the following after paragraph (e):

(f) where it has obtained approval under paragraph 67.1(b) to keep the account of a person that has been determined to be a politically exposed foreign person open

(5) Subsection 23(2) of the Regulations is repealed.

34. The heading before section 24 and sections 24 to 26 of the Regulations are repealed.

35. Section 27 of the Regulations is repealed.

36. Subsections 28(3) and (4) of the Regulations are replaced by the following:

(3) Paragraph (1)(b) applies in respect of a money services business that orders a person or entity, to which subsection (1), 12(1) or 40(1) applies, to send out of Canada an electronic funds transfer made at the request of a client, unless it provides that person or entity with the name and address of that client.

(4) Subject to subsection (5), for greater certainty, paragraph (1)(c) does not apply when the money services business receives an electronic funds transfer from a person or entity in Canada, even if the initial sender is outside Canada.

(5) Paragraph (1)(c) applies in respect of a money services business that receives an electronic funds transfer for a beneficiary in Canada from a person or entity to which subsection (1), 12(1) or 40(1) applies where the initial sender is outside Canada, unless the electronic funds transfer contains the name and address of that beneficiary.

37. (1) The portion of section 30 of the Regulations before paragraph (d) is replaced by the following:

30. Every money services business shall keep the following records in respect of any of the activities referred to in paragraph 5(h) of the Act:

(a) every client credit file that it creates in the normal course of business;

(a.1) every internal memorandum that it receives or creates in the normal course of business and that concerns services provided to its clients;

(b) where a client information record is created in respect of a client that is a corporation, a copy of the part of official corporate records that contains any provision relating to the power to bind the corporation in respect of transactions with the money services business, if the copy of that part is obtained in the normal course of business;

(c) where it receives an amount of $3,000 or more from a person or from an entity other than a financial entity in consideration of the issuance of traveller's cheques, money orders or other similar negotiable instruments, a record of the amount received, the date it was received, the name and address of the person who in fact gave the amount and whether the amount received was in cash, cheques, traveller's cheques, money orders or other similar negotiable instruments;

(2) Section 30 of the Regulations is amended by striking out the word "and" at the end of paragraph (d) and by replacing paragraph (e) with the following:

(e) where an amount of $1,000 or more is remitted or transmitted, a record of

(f) a transaction ticket in respect of every foreign currency exchange transaction.

38. The Regulations are amended by adding the following after section 30:

31. Every money services business shall keep a record of the following information when a transaction is reviewed under subsection 67.2(2):

(a) the office or position in respect of which the person initiating the transaction or the beneficiary of the transaction is determined to be a politically exposed foreign person;

(b) the source, if known, of the funds that have been used for the transaction;

(c) the date of the determination that the person referred to in paragraph (a) is a politically exposed foreign person;

(d) the name of the member of senior management who reviewed the transaction; and

(e) the date the transaction was reviewed.

32. Every money services business that enters into an ongoing electronic funds transfer, funds remittance or foreign exchange service agreement with an entity, or a service agreement for the issuance or redemption of money orders, traveller's cheques or other negotiable instruments, shall keep a record of the name, address, date of birth and occupation of every person who has signed the agreement on behalf of the entity, a client information record with respect to the entity and a list containing the name, address and date of birth of every employee authorized to order transactions under the agreement.

39. (1) The portion of paragraph 34(1)(a) of the French version of the Regulations before subparagraph (i) is replaced by the following:

a) lorsqu'ils exercent l'une ou l'autre des activités ci-après pour le compte d'une personne ou entité :

(2) Paragraph 34(1)(b) of the French version of the Regulations is replaced by the following:

b) lorsqu'ils donnent des instructions pour le compte d'une personne ou entité à l'égard de l'une ou l'autre des activités visées à l'alinéa a);

(3) Subsection 34(1) of the Regulations is amended by adding the word "or" at the end of paragraph (a), by striking out the word "or" at the end of paragraph (b) and by repealing paragraph (c).

(4) Subsection 34(2) of the Regulations is replaced by the following:

(2) Subsection (1) does not apply in respect of an accountant when they engage in any of the activities referred to in paragraph (1)(a) or (b) on behalf of their employer.

40. Section 36 of the Regulations is replaced by the following:

36. (1) Every accountant and every accounting firm shall, when engaging in an activity described in section 34, keep the following records:

(a) a receipt of funds record in respect of every amount of $3,000 or more that they receive in the course of a single transaction, unless the amount is received from a financial entity or a public body; and

(b) where the receipt of funds record is in respect of a client that is a corporation, a copy of the part of official corporate records that contains any provision relating to the power to bind the corporation in respect of transactions with the accountant or accounting firm.

(2) Subject to subsection 52(2), every accountant and every accounting firm shall, when engaging in an activity described in section 34, keep a large cash transaction record in respect of every amount in cash of $10,000 or more that they receive in the course of a single transaction, unless the cash is received from a financial entity or a public body.

(3) Subsection (1) does not apply in respect of a transaction if a large cash transaction record is also required by subsection (2) to be kept in respect of that same transaction.

41. Section 37 of the Regulations is replaced by the following:

37. Every real estate broker or sales representative is subject to Part 1 of the Act when they act as an agent in respect of the purchase or sale of real estate.

42. Section 39 of the Regulations is replaced by the following:

39. (1) Subject to subsections (3) and 52(2), every real estate broker or sales representative shall, when engaging in an activity described in section 37, keep the following records:

(a) a receipt of funds record in respect of every amount that they receive in the course of a single transaction, unless the amount is received from a financial entity or a public body;

(b) a client information record in respect of every purchase or sale of real estate; and

(c) where the receipt of funds record or the client information record is in respect of a corporation, a copy of the part of official corporate records that contains any provision relating to the power to bind the corporation in respect of transactions with the real estate broker or sales representative.

(2) Subject to subsection 52(2), every real estate broker or sales representative shall, when engaging in an activity described in section 37, keep a large cash transaction record in respect of every amount in cash of $10,000 or more that they receive in the course of a single transaction, unless the cash is received from a financial entity or a public body.

(3) Paragraphs (1)(a) and (c) do not apply in respect of a transaction if a large cash transaction record is also required by subsection (2) to be kept in respect of that same transaction.

43. Section 40 of the Regulations is replaced by the following:

40. (1) Subject to subsection 52(1), every casino shall report the following transactions and information to the Centre:

(a) the receipt from a client of an amount in cash of $10,000 or more in the course of a single transaction, together with the information referred to in Schedule 1, unless the cash is received from a financial entity or a public body;

(b) the sending out of Canada, at the request of a client, of an electronic funds transfer of $10,000 or more in the course of a single transaction, together with the information referred to in Schedule 5; and

(c) the receipt from outside Canada of an electronic funds transfer, sent at the request of a client, of $10,000 or more in the course of a single transaction, together with the information referred to in Schedule 6.

(2) Subject to subsection (3), for greater certainty, paragraph (1)(b) does not apply when the casino sends an electronic funds transfer to a person or entity in Canada, even if the final recipient is outside Canada.

(3) Paragraph (1)(b) applies in respect of a casino that orders a person or entity, to which subsection (1), 12(1) or 28(1) applies, to send out of Canada an electronic funds transfer made at the request of a client, unless it provides that person or entity with the name and address of that client.

(4) Subject to subsection (5), for greater certainty, paragraph (1)(c) does not apply when the casino receives an electronic funds transfer from a person or entity in Canada, even if the initial sender is outside Canada.

(5) Paragraph (1)(c) applies in respect of a casino that receives an electronic funds transfer for a beneficiary in Canada from a person or entity to which subsection (1), 12(1) or 28(1) applies where the initial sender is outside Canada, unless the electronic funds transfer contains the name and address of that beneficiary.

44. Subsection 41(1) of the Regulations is replaced by the following:

41. (1) Subject to subsection 52(2), every casino shall keep a large cash transaction record in respect of every amount in cash of $10,000 or more that it receives in the course of a single transaction, unless the amount is received from a financial entity or a public body.

45. Subsection 42(2) of the Regulations is amended by striking out the word "and" at the end of paragraph (b), by adding the word "and" at the end of paragraph (c) and by adding the following after paragraph (c):

(d) the person's date of birth.

46. Section 43 of the Regulations is amended by striking out the word "and" at the end of paragraph (d) and by replacing paragraph (e) with the following:

(e) with respect to every foreign currency exchange transaction, a transaction ticket; and

(f) where an amount of $1,000 or more is remitted or transmitted, a record of

47. Subsections 52(2) and (3) of the Regulations are replaced by the following:

(2) The requirement that a person or entity keep or retain a record or include information in it does not apply if the information that must be found in the record is readily obtainable from other records that the person or entity is required to keep or retain under these Regulations.

(3) Despite subsection (1), for the application of subsection 3(1), the requirement to report information set out in Schedules 1 to 3, 5 and 6 does not apply to a person or entity in respect of information set out in an item of any of those Schedules that is marked with an asterisk if, after taking reasonable measures to do so, the person or entity is unable to obtain the information.

48. Section 53 of the Regulations is replaced by the following:

53. Subject to subsection 63(1), every person or entity that is required to keep and retain a large cash transaction record under these Regulations shall ascertain, in accordance with subsection 64(1), the identity of every person with whom the person or entity conducts a transaction in respect of which that record must be kept, other than a deposit made to a business account or a deposit made by means of an automated banking machine.

SUSPICIOUS TRANSACTIONS

53.1 (1) Except where identity has been previously ascertained as required by these Regulations, every person or entity that is subject to these Regulations shall take reasonable measures to ascertain, in accordance with subsection 64(1), the identity of every person with whom the person or entity conducts a transaction that is required to be reported to the Centre under section 7 of the Act.

(2) Subsection (1) does not apply if the person or entity believes that complying with that subsection would inform the person that the transaction and the related information is being reported under section 7 of the Act.

53.2 For the purposes of section 9.2 of the Act, the prescribed circumstances are the circumstances in which a financial entity, a securities dealer or a casino is required to ascertain the identity of a person or confirm the existence of an entity in connection with the opening of a new account in accordance with section 64, 65 or 66, as applicable.

49. (1) The portion of subsection 54(1) of the Regulations before paragraph (d) is replaced by the following:

54. (1) Subject to sections 62 and 63, every financial entity shall

(a) in accordance with subsection 64(1), ascertain the identity of every person who signs a signature card in respect of an account, other than a credit card account, that the financial entity opens, except in the case of a business account the signature card of which is signed by more than three persons authorized to act with respect to the account, if the financial entity has ascertained the identity of at least three of those persons;

(b) in accordance with subsection 64(1), ascertain the identity of every person who has not signed a signature card in respect of an account held with the financial entity and has not been authorized to act with respect to such an account but who conducts

(2) Subsection 54(2) of the Regulations is replaced by the following:

(2) For the purpose of paragraph (1)(a), where the person who signs a signature card is under 12 years of age, the financial entity shall ascertain the identity of the father, mother or guardian of the person in accordance with subsection 64(1).

50. The Regulations are amended by adding the following after section 54:

54.1 Subject to subsections 62(1) and (2) and section 63, every financial entity shall

(a) where the financial entity opens a credit card account in the name of a person, ascertain their identity in accordance with subsection 64(1.1);

(b) where the financial entity opens a credit card account in the name of a corporation, confirm the existence of and ascertain the name and address of the corporation and the names of its directors in accordance with section 65; and

(c) where the financial entity opens a credit card account in the name of an entity other than a corporation, confirm the existence of the entity in accordance with section 66.

54.2 Subject to section 62 and subsection 63(5), every financial entity shall

(a) in accordance with subsection 67.1(2), take reasonable measures to determine whether a person for whom the financial entity opens an account is a politically exposed foreign person;

(b) take reasonable measures, based on the level of the risk referred to in subsection 9.6(2) of the Act, to determine whether a person who is an existing account holder is a politically exposed foreign person;

(c) in accordance with subsection 67.2(3), take reasonable measures to determine whether the person who initiates an electronic funds transfer of $100,000 or more is a politically exposed foreign person; and

(d) in accordance with subsection 67.2(3), take reasonable measures to determine whether the person who is the beneficiary of an electronic funds transfer of $100,000 or more is a politically exposed foreign person.

51. (1) The portion of section 55 of the Regulations before paragraph (b) is replaced by the following:

55. Subject to sections 62 and 63, every trust company shall, in addition to complying with section 54,

(a) in accordance with subsection 64(1), ascertain the identity of every person who is the settlor of an inter vivos trust in respect of which the company is required to keep records under section 15;

(2) Subparagraph 55(d)(ii) of the Regulations is replaced by the following:

(3) Paragraph 55(e) of the Regulations is replaced by the following:

(e) in accordance with subsection 64(1), ascertain the identity of each person who is authorized to act as co-trustee of any trust.

52. The Regulations are amended by adding the following after section 55:

CORRESPONDENT BANKING RELATIONSHIPS

55.1 Every financial entity that enters into a correspondent banking relationship shall

(a) ascertain the name and address of the foreign financial institution by examining a copy of the foreign financial institution's banking licence, banking charter, authorization or certification to operate from the relevant regulatory agency or certificate of corporate status or a copy of another similar document; and

(b) take reasonable measures to ascertain, based on publicly available information, whether there are any civil or criminal penalties that have been imposed on the foreign financial institution in respect of anti-money laundering or anti-terrorist financing requirements and, if so, to conduct, for the purpose of detecting any transactions that are required to be reported under section 7 of the Act, ongoing monitoring of all transactions in the context of the correspondent banking relationship.

55.2 In respect of correspondent banking relationships, where the customer of the foreign financial institution has direct access to the services provided under the correspondent banking relationship, the financial entity shall take reasonable measures to ascertain whether

(a) the foreign financial institution has, in respect of those of its customers that have direct access to the accounts of the financial entity, met requirements that are consistent with the requirements of sections 54 and 64; and

(b) the foreign financial institution has agreed to provide relevant customer identification data upon request to the financial entity.

53. Section 56 of the Regulations is replaced by the following:

56. (1) Subject to subsection (2), section 56.2 and subsections 62(2) and (3) and 63(1), every life insurance company or life insurance broker or agent shall ascertain, in accordance with subsection 64(1), the identity of every person who conducts, on the person's own behalf or on behalf of a third party, a transaction with that life insurance company or life insurance broker or agent for which a client information record is required to be kept under section 19.

(2) A life insurance company or life insurance broker or agent is not required to ascertain the identity of a person where there are reasonable grounds to believe that the person's identity has been ascertained in accordance with subsection 64(1) by another life insurance company or life insurance broker or agent in respect of the same transaction or of a transaction that is part of a series of transactions that includes the original transaction.

(3) Subject to subsections 62(2) and 63(2) and (4), every life insurance company or life insurance broker or agent shall, in accordance with section 65, confirm the existence of and ascertain the name and address of every corporation in respect of which they are required to keep a client information record and the names of the corporation's directors.

(4) Subject to subsections 62(2) and 63(3), every life insurance company or life insurance broker or agent shall, in accordance with section 66, confirm the existence of every entity, other than a corporation, in respect of which they are required to keep a client information record.

56.1 Subject to section 56.2 and subsections 62(2) and 63(5), every life insurance company or life insurance broker or agent shall, in accordance with subsection 67.2(3), take reasonable measures to determine if a person who makes a lump-sum payment of $100,000 or more in respect of an immediate or deferred annuity or life insurance policy on their own behalf or on behalf of a third party is a politically exposed foreign person.

56.2 Sections 56 and 56.1 do not apply to a life insurance company or a life insurance broker or agent when they are dealing in reinsurance.

54. (1) Subsections 57(1) and (2) of the Regulations are replaced by the following:

57. (1) Subject to section 62 and subsection 63(1), every securities dealer shall ascertain, in accordance with subsection 64(1), the identity of every person who is authorized to give instructions in respect of an account for which a record must be kept by the securities dealer under subsection 23(1).

(2) Subsections 57(3) to (5) of the Regulations are replaced by the following:

(3) Subject to section 62 and subsections 63(2) and (4), every securities dealer shall, in accordance with section 65, confirm the existence of and ascertain the name and address of every corporation for which it opens an account and the names of the corporation's directors.

(4) Subject to section 62 and subsection 63(3), every securities dealer shall, in accordance with section 66, confirm the existence of every entity, other than a corporation, for which it opens an account.

55. The Regulations are amended by adding the following after section 57:

57.1 (1) Subject to section 62 and subsection 63(5), every securities dealer shall, in accordance with subsection 67.1(2), take reasonable measures to determine if the person for whom the securities dealer opens an account is a politically exposed foreign person.

(2) Subject to section 62 and subsection 63(5), every securities dealer shall take reasonable measures, based on the level of the risk referred to in subsection 9.6(2) of the Act, to determine whether a person who is an existing account holder is a politically exposed foreign person.

56. Section 58 of the Regulations and the heading before it are repealed.

57. Section 59 of the Regulations is replaced by the following:

59. (1) Subject to subsection 63(1), every money services business shall, in accordance with subsection 64(1), ascertain the identity of every person who conducts any of the following transactions:

(a) the issuance or redemption of money orders, traveller's cheques or other similar negotiable instruments in an amount of $3,000 or more;

(b) the remittance or transmission of $1,000 or more by any means through any person or entity; or

(c) a foreign currency exchange transaction of $3,000 or more.

(2) Subject to subsections (6) and 63(2) and (4), every money services business shall, in accordance with section 65, confirm the existence of every corporation in respect of which they are required to keep a client information record and ascertain the name and address of the corporation and the names of the corporation's directors.

(3) Subject to subsections (6) and 63(3), every money services business shall, in accordance with section 66, confirm the existence of every entity, other than a corporation, in respect of which they are required to keep a client information record.

(4) Subsection (1) does not apply when a person referred to in section 32 conducts a transaction on behalf of their employer under an agreement referred to in that section.

(5) Subject to section 63, every money services business shall, in accordance with subsection 67.2(3),

(a) take reasonable measures to determine whether the person who initiates an electronic funds transfer of $100,000 or more is a politically exposed foreign person; and

(b) take reasonable measures to determine whether the person who is the beneficiary of an electronic funds transfer of $100,000 or more is a politically exposed foreign person.

(6) Subsections (2) and (3) do not apply in respect of a corporation or an entity other than a corporation referred to in paragraph 62(2)(m) or (n) with which the money services business has entered into a service agreement referred to in section 32.

ACCOUNTANTS AND ACCOUNTING FIRMS

59.1 Subject to section 63, every accountant and every accounting firm shall, in respect of a transaction for which a record is required to be kept under subsection 36(1),

(a) in accordance with subsection 64(1), ascertain the identity of every person who conducts the transaction;

(b) in accordance with section 65, confirm the existence of and ascertain the name and address of every corporation on whose behalf the transaction is conducted and the names of its directors; and

(c) in accordance with section 66, confirm the existence of every entity, other than a corporation, on whose behalf the transaction is conducted.

REAL ESTATE BROKERS OR SALES REPRESENTATIVES

59.2 (1) Subject to section 63, every real estate broker or sales representative shall, in respect of a transaction for which a record is required to be kept under subsection 39(1),

(a) in accordance with subsection 64(1), ascertain the identity of every person who conducts the transaction;

(b) in accordance with section 65, confirm the existence of and ascertain the name and address of every corporation on whose behalf the transaction is conducted and the names of its directors; and

(c) in accordance with section 66, confirm the existence of every entity, other than a corporation, on whose behalf the transaction is conducted.

(2) Where the persons or entities that are parties to a real estate transaction are each represented by a different real estate broker or sales representative, the real estate broker or sales representative that represents one party is not required to ascertain the identity or the name and address of any other party or confirm their existence.

(3) Where one or more but not all of the parties to a real estate transaction are represented by a real estate broker or sales representative, each real estate broker or sales representative that represents a party to the transaction shall ascertain the identity or confirm the existence of the parties that are not so represented.

58. The portion of section 60 of the Regulations before paragraph (e) is replaced by the following:

60. Subject to subsection 62(1) and section 63, every casino shall

(a) in accordance with subsection 64(1), ascertain the identity of every person who signs a signature card in respect of an account that the casino opens, except in the case of a business account whose signature card is signed by more than three persons authorized to act with respect to the account, if the casino has ascertained the identity of at least three of those persons;

(b) in accordance with subsection 64(1), ascertain the identity of every person who

59. Paragraphs 61(a) to (d) of the Regulations are replaced by the following:

(a) in accordance with subsection 64(1), ascertain the identity of every person in respect of whom a client information record is required to be kept under paragraph 49(a);

(b) in accordance with subsection 64(1), ascertain the identity of every person in respect of whom they are not required to keep a client information record and who conducts a transaction that involves an amount of $3,000 or more for the issuance or redemption of money orders or other similar negotiable instruments;

(c) in accordance with section 65, confirm the existence of and ascertain the name and address of every corporation in respect of which a client information record is required to be kept under paragraph 49(a) and the names of the corporation's directors; and

(d) in accordance with section 66, confirm the existence of every entity, other than a corporation, in respect of which a client information record is required to be kept under paragraph 49(a).

60. Section 62 of the Regulations and the heading before it are replaced by the following:

EXCEPTIONS TO RECORD-KEEPING AND ASCERTAINING IDENTITY

62. (1) Sections 54, 54.1, 54.2, 55, 57, 57.1 and 60 do not apply in respect of

(a) the opening of a business account in respect of which the financial entity, the securities dealer or the casino, as the case may be, has already ascertained the identity of at least three persons who are authorized to give instructions in respect of the account;

(b) the opening of an account for the sale of mutual funds where there are reasonable grounds to believe that identity has been ascertained in accordance with subsection 64(1) by a securities dealer in respect of

(c) a person who already has an account with the financial entity, the securities dealer or the casino, as the case may be.

(2) Sections 14, 14.1, 19, 23, 54, 54.1, 54.2, 55, 56, 56.1, 57 and 57.1 do not apply in respect of

(a) the purchase of an exempt policy as defined in subsection 306(1) of the Income Tax Regulations, as it read on May 1, 1992;

(b) the purchase of a group life insurance policy that does not provide for a cash surrender value or a savings component;

(c) the purchase of an immediate or deferred annuity that is paid for entirely with funds that are directly transferred from a registered pension plan or from a pension plan that is required to be registered under the Pension Benefits Standards Act, 1985, or similar provincial legislation;

(d) the purchase of a registered annuity policy or a registered retirement income fund;

(e) the purchase of an immediate or deferred annuity that is paid for entirely with the proceeds of a group life insurance policy;

(f) a transaction that is part of a reverse mortgage or of a structured settlement;

(g) the opening of an account for the deposit and sale of shares from a corporate demutualization or the privatization of a Crown corporation;

(h) the opening of an account in the name of an affiliate of a financial entity, if that affiliate carries out activities that are similar to those of persons and entities referred to in paragraphs 5(a) to (g) of the Act;

(i) the opening of a registered plan account, including a locked-in retirement plan account, a registered retirement savings plan account and a group registered retirement savings plan account;

(j) the opening of an account established pursuant to the escrow requirements of a Canadian securities regulator or Canadian stock exchange or any provincial legislation;

(k) the opening of an account where the account holder or settlor is a pension fund that is regulated by or under an Act of Parliament or of the legislature of a province;

(l) the opening of an account in the name of, or in respect of which instructions are authorized to be given by, a financial entity, a securities dealer or a life insurance company or by an investment fund that is regulated under provincial securities legislation;

(m) instances where the entity in respect of which a client information record is otherwise required to be kept is a public body, or a corporation that has minimum net assets of $75 million on its last audited balance sheet and whose shares are traded on a Canadian stock exchange or a stock exchange that is prescribed by section 3201 of the Income Tax Regulations, and operates in a country that is a member of the Financial Action Task Force;

(n) instances where the entity in respect of which a client information record is otherwise required to be kept is a subsidiary of a public body or a corporation referred to in paragraph (m) and the financial statements of the entity are consolidated with the financial statements of that public body or corporation; or

(o) the opening of an account that is opened solely in the course of providing customer accounting services to a securities dealer.

(3) In respect of a group plan account, other than a group plan account referred to in subsection (2), a financial entity, securities dealer, life insurance company or life insurance broker or agent is not required to ascertain the identity of, or keep a signature card in respect of, any individual member of the group plan or determine whether they are a politically exposed foreign person if

(a) the member's contributions are made by the sponsor of the plan or by means of payroll deductions; and

(b) the existence of the plan sponsor has been confirmed in accordance with section 65 or 66.

61. (1) Section 63 of the Regulations is amended by adding the following after subsection (1):

(1.1) Subsection (1) does not apply where the person has doubts about the information collected.

(2) Subsection 63(4) of the Regulations is replaced by the following:

(4) Despite paragraphs 54(1)(d) and 54.1(b), subsections 56(3), 57(3) and 59(2) and paragraphs 59.1(b), 59.2(1)(b), 60(e) and 61(c), the names of a corporation's directors need not be ascertained if the corporation is a securities dealer.

(5) A person or entity that has determined that a person is a politically exposed foreign person in accordance with section 54.2, 56.1 or 57.1 or subsection 59(5) is not required to subsequently determine if that same person is a politically exposed foreign person.

62. (1) Subsection 64(1) of the Regulations is replaced by the following:

64. (1) In the cases referred to in sections 53, 53.1, 54, 55, 56, 57, 59, 59.1, 59.2, 60 and 61, the identity of a person shall be ascertained, at the time referred to in subsection (2) and in accordance with subsection (3),

(a) by referring to the person's birth certificate, driver's licence, provincial health insurance card (if such use of the card is not prohibited by the applicable provincial law), passport or other similar document; or

(b) if the person is not physically present when the account is opened, the credit card application is submitted, the trust is established, the client information record is created or the transaction is conducted,

(1.1) In the case referred to in paragraph 54.1(a), the identity of a person shall be ascertained by a person or entity, at the time referred to in subsection (2) and in accordance with subsection (3),

(a) by referring to the person's birth certificate, driver's licence, provincial health insurance card (if such use of the card is not prohibited by the applicable provincial law), passport or other similar document; or

(b) where the person is not physically present when the credit card application is submitted,

(1.2) For the purposes of paragraphs (1)(b)(i) and (1.1)(b)(i), an entity is affiliated with another entity if one of them is wholly-owned by the other or both are wholly-owned by the same entity.

(1.3) A combination of methods referred to in subparagraph (1)(b)(ii) or (1.1)(b)(ii) or (iii) shall not be relied on by a person or entity to ascertain the identity of a person unless

(a) the information obtained in respect of that person from each of the two applicable identification methods is determined by the person or entity to be consistent; and

(b) the information referred to in paragraph (a) is determined by the person or entity to be consistent with the information in respect of that person, if any, that is contained in a record kept by the person or entity under these Regulations.

(2) Paragraphs 64(2)(a) and (b) of the Regulations are replaced by the following:

(a) in the cases referred to in paragraph 54(1)(a), subsection 57(1) and paragraph 60(a), before any transaction other than an initial deposit is carried out on an account;

(b) in the cases referred to in section 53, paragraph 54(1)(b), subsection 59(1) and paragraphs 60(b) and 61(b), at the time of the transaction;

(b.1) in the case referred to in section 53.1, before the transaction is reported as required under section 7 of the Act;

(b.2) in the case referred to in paragraph 54.1(a), before any credit card is activated;

(3) Paragraphs 64(2)(d) and (e) of the Regulations are replaced by the following:

(d) in the cases referred to in subsection 56(1) and paragraph 61(a), within 30 days after the client information record is created;

(e) in the cases referred to in paragraphs 59.1(a) and 59.2(1)(a), at the time of the transaction; and

(f) in the case referred to in subsection 62(3), at the time a contribution in respect of an individual member of the group plan is made to the plan, if

(4) Subsection 64(3) of the Regulations is replaced by the following:

(3) Unless otherwise specified in these Regulations, only original documents that are valid and have not expired may be referred to for the purpose of ascertaining identity in accordance with paragraph (1)(a) or (1.1)(a).

63. The Regulations are amended by adding the following after section 64:

64.1 (1) A person or entity required to take measures to ascertain identity under subsection 64(1) or (1.1) may rely on an agent or mandatary to take the identification measures described in paragraph 64(1)(a) or (1.1)(a), respectively, only if that person or entity has entered into an agreement or arrangement, in writing, with that agent or mandatary for the purposes of ascertaining identity.

(2) A person or entity that enters into an agreement or arrangement referred to in subsection (1) must obtain from the agent or mandatary the customer information obtained by the agent or mandatary under that agreement or arrangement.

64. (1) Subsection 65(2) of the Regulations is amended by adding the following after paragraph (a):

(a.1) in the case referred to in paragraph 54.1(b), before any credit card is issued on the account;

(2) Paragraphs 65(2)(c) and (d) of the Regulations are replaced by the following:

(c) in the cases referred to in subsections 56(3) and 59(2) and paragraph 61(c), within 30 days after the client information record is created;

(d) in the case referred to in subsection 57(3), within 30 days after the opening of the account; and

(e) in the cases referred to in paragraphs 59.1(b) and 59.2(1)(b), within 30 days after the transaction.

65. (1) Subsection 66(2) of the Regulations is amended by adding the following after paragraph (a):

(a.1) in the case referred to in paragraph 54.1(c), before any credit card is issued on the account;

(2) Paragraphs 66(2)(c) and (d) of the Regulations are replaced by the following:

(c) in the cases referred to in subsections 56(4) and 59(3) and paragraph 61(d), within 30 days after the client information record is created;

(d) in the case referred to in subsection 57(4), within 30 days after the account is opened; and

(e) in the cases referred to in paragraphs 59.1(c) and 59.2(1)(c), within 30 days after the transaction.

66. (1) Section 67 of the Regulations is replaced by the following:

66.1 (1) The prescribed persons or entities for the purpose of section 9.5 of the Act are every financial entity, money services business and casino that is required to keep a record under these Regulations in respect of an electronic funds transfer referred to in subsection (2).

(2) Subject to subsection (3), the prescribed electronic funds transfers to which section 9.5 of the Act applies are electronic funds transfers as defined in subsection 1(2) — but including transfers within Canada that are SWIFT MT 103 messages — that are sent at the request of a client by a means that allows for the information referred to in paragraph 9.5(a) of the Act to be included with the transfers.

(3) For greater certainty, subsection (2) does not apply in respect of

(a) a transfer carried out using a credit or debit card, if the recipient has an agreement with the payment service provider permitting payment by such means for the provision of goods and services;

(b) a transfer where the recipient withdraws cash from their account;

(c) a transfer carried out by means of a direct deposit or a pre-authorized debit; or

(d) a transfer carried out using cheque imaging and presentment.

67. Every person or entity that is required by these Regulations to ascertain the identity of a person in connection with a record that the person or entity has created and is required to keep under these Regulations, or a transaction that they have carried out and in respect of which they are required to keep a record under these Regulations or under section 12.1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations, shall set out on or in or include with that record the name of that person and

(a) if a birth certificate, driver's licence, provincial health insurance card (if such use of the card is not prohibited by the applicable provincial law), passport or any other similar record is relied on to ascertain the person's identity, the type and reference number of the record and the place where it was issued;

(b) if a confirmation of a cleared cheque from a financial entity is relied on to ascertain the person's identity, the name of the financial entity and the account number of the deposit account on which the cheque was drawn;

(c) if the person's identity is ascertained by confirming that they hold a deposit account with a financial entity, the name of the financial entity where the account is held and the number of the account and the date of the confirmation; (d) if the person's identity is ascertained by relying on a previous confirmation of their identity by an entity that is affiliated with the entity ascertaining the identity of the person or an entity that is a member of the same association — being a central cooperative credit society as defined in section 2 of the Cooperative Credit Associations Act — as the entity ascertaining the identity of the person, the name of that entity and the type and reference number of the record that entity previously relied on to ascertain the person's identity;

(d) if the person’s identity is ascertained by relying on a previous confirmation of their identity by an entity that is affiliated with the entity ascertaining the identity of the person or an entity that is a member of the same association — being a central cooperative credit society as defined in section 2 of the Cooperative Credit Associations Act — as the entity ascertaining the identity of the person, the name of that entity and the type and reference number of the record that entity previously relied on to ascertain the person’s identity;

(e) if an identification product is used to ascertain the person's identity, the name of the identification product, the name of the entity offering the product, the search reference number and the date the product was used to ascertain the person's identity;

(f) if the person's identity is ascertained by consulting a credit file kept by an entity in respect of the person, the name of the entity and the date of the consultation;

(g) if the person's identity is ascertained from an attestation signed by a commissioner of oaths in Canada or a guarantor in Canada, the attestation;

(h) if the person's identity is ascertained by consulting an independent data source, the name of the data source, the date of the consultation and the information provided by the data source;

(i) if the person's identity is ascertained by relying on a utility invoice issued in the person's name, the invoice or a legible photocopy or electronic image of the invoice;

(j) if the person's identity is ascertained by relying on a photocopy or electronic image of a document provided by the person, that photocopy or electronic image; and

(k) if the person's identity is ascertained by relying on a deposit account statement issued in the person's name by a financial entity, a legible photocopy or electronic image of the statement.

DUE DILIGENCE MEASURES IN RESPECT OF POLITICALLY EXPOSED FOREIGN PERSONS

67.1 (1) A financial entity or securities dealer that has determined under paragraph 54.2(a) or (b) or section 57.1 that a person is a politically exposed foreign person shall

(a) take reasonable measures to establish the source of the funds that have been, will be or are expected to be deposited in the account in question;

(b) subject to subsections (2) and (3), obtain the approval of senior management to keep the account open; and

(c) conduct enhanced ongoing monitoring of the activities in respect of the account for the purpose of detecting transactions that are required to be reported to the Centre under section 7 of the Act.

(2) The determination referred to in paragraph 54.2(a) and section 57.1(1) as to whether a person is a politically exposed foreign person shall be made, and the approval referred to in paragraph (1)(b) shall be obtained, within 14 days from the day on which the account is activated.

(3) The approval referred to in paragraph (1)(b) shall be obtained within 14 days after the day on which a financial entity or securities dealer has determined under paragraph 54.2(b) or subsection 57.1(2) that a person is a politically exposed foreign person.

67.2 (1) A financial entity, life insurance company or life insurance broker or agent or money services business that has determined under paragraph 54.2(c), section 56.1 or paragraph 59(5)(a) that a person is a politically exposed person shall take reasonable measures to establish the source of the funds that have been used for the transaction in question.

(2) Where a financial entity, life insurance company, life insurance broker or agent or money services business has determined under paragraph 54.2(c) or (d), section 56.1 or subsection 59(5) that a person is a politically exposed foreign person, a member of senior management shall review the transaction in question in accordance with subsection (3).

(3) The determination, referred to in paragraphs 54.2(c) and (d), section 56.1 and subsection 59(5), as to whether a person is a politically exposed foreign person and the review of a transaction referred to in subsection (2) shall be completed within 14 days after the day on which the transaction occurred.

(2) Subsection 66.1(2) of the Regulations, as enacted by subsection (1) , is replaced by the following:

(2) Subject to subsection (3), the prescribed electronic funds transfers to which section 9.5 of the Act applies are those as defined in subsection 1(2), but including transfers within Canada that are SWIFT MT 103 messages.

67. Section 71 of the Regulations is replaced by the following:

71. (1) For the purpose of subsection 9.6(1) of the Act, a person or entity referred to in that subsection shall, as applicable, implement the compliance program referred to in that subsection by

(a) appointing a person — who, where the compliance program is being implemented by a person, may be that person — who is to be responsible for the implementation of the program;

(b) developing and applying written compliance policies and procedures that are kept up to date and, in the case of an entity, are approved by a senior officer;

(c) assessing and documenting, in a manner that is appropriate for the person or entity, the risk referred to in subsection 9.6(2) of the Act, taking into consideration

(d) if the person or entity has employees, agents or other persons authorized to act on their behalf, developing and maintaining a written ongoing compliance training program for those employees, agents or persons; and

(e) instituting and documenting a review of the policies and procedures, the risk assessment and the training program for the purpose of testing their effectiveness, which review is required to be carried out every two years by an internal or external auditor of the person or entity, or by the person or entity if they do not have such an auditor.

(2) For the purposes of the compliance program referred to in subsection 9.6(1) of the Act, every entity referred to in that subsection shall report the following in written form to a senior officer within 30 days after the assessment:

(a) the findings of the review referred to in paragraph (1)(e);

(b) any updates made to the policies and procedures within the reporting period; and

(c) the status of the implementation of the updates to those policies and procedures.

71.1 The prescribed special measures that are required to be taken by a person or entity referred to in subsection 9.6(1) of the Act for the purpose of subsection 9.6(3) of the Act are the development and application of written policies and procedures for

(a) taking reasonable measures to keep client identification information and the information referred to in section 11.1 up to date;

(b) taking reasonable measures to conduct ongoing monitoring for the purpose of detecting transactions that are required to be reported to the Centre under section 7 of the Act; and

(c) mitigating the risks identified in accordance with subsection 9.6(3) of the Act.

68. The section references after the heading "SCHEDULE 1" in Schedule 1 to the Regulations are replaced by the following:

(Paragraph 12(1)(a), sections 17 and 21, paragraph 28(1)(a), sections 35 and 38, paragraph 40(1)(a), section 47 and subsections 52(1) and (3))

69. Item 1 of Part A of Schedule 1 to the Regulations is replaced by the following:

1.^* Type of reporting person or entity, as described in paragraphs 5(a) to (h), (k) and (l) of the Act, and, if reporting person or entity is referred to in paragraph 5(i) or (j) of the Act, type of business, profession or activity of reporting person or entity, as described in sections 16, 34, 37, 45 and 46 of these Regulations

70. Items 2 and 3 of Part B of Schedule 1 to the Regulations are replaced by the following:

2. Time of transaction and, for a transaction for which the date is provided in item 1, the posting date (if different from the date of the transaction)

3.^* Posting date for a transaction for which night deposit indicator is provided in item 1, if date of transaction is not provided

71. The section references after the heading "SCHEDULE 2" in Schedule 2 to the Regulations are replaced by the following:

(Paragraphs 12(1)(b) and 28(1)(b) and subsections 52(1), (3) and (4))

72. The section references after the heading "SCHEDULE 3" in Schedule 3 to the Regulations are replaced by the following:

(Paragraphs 12(1)(c) and 28(1)(c) and subsections 52(1), (3) and (4))

73. The section references after the heading "SCHEDULE 5" in Schedule 5 to the Regulations are replaced by the following:

(Paragraphs 12(1)(b), 28(1)(b) and 40(1)(b) and subsections 52(1) and (3))

74. The section references after the heading "SCHEDULE 6" in Schedule 6 to the Regulations are replaced by the following:

(Paragraphs 12(1)(c), 28(1)(c) and 40(1)(c) and subsections 52(1) and (3))

75. The Regulations are amended by adding, after Schedule 6, the Schedule 7 set out in the schedule to these Regulations.

76. The Regulations are amended by replacing the words "name and address" with the words "name, address and date of birth" wherever they occur in the following provisions:

(a) the definition "client information record" in subsection 1(2);

(b) paragraph 8(2)(a);

(c) paragraph 9(2)(a);

(d) paragraph 10(2)(a);

(e) section 11;

(f) paragraph 15(1)(b);

(g) paragraph 23(1)(c);

(h) paragraphs 30(c) and (d);

(i) paragraph 43(c);

(j) subparagraph 43(d)(i); and

(k) paragraphs 49(c) and (d).

COMING INTO FORCE

77. (1) Subject to subsections (2) and (3), these Regulations come into force on June 23, 2008.

(2) The definitions "electronic funds transfer" and "financial entity" in subsection 1(2) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations, as enacted by subsection 1(1) of these Regulations, section 10 and subsection 19(1) of these Regulations, the definition "electronic funds transfer" in subsection 1(2) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, as enacted by subsection 19(2) of these Regulations, subsection 19(3) of these Regulations, the definitions "correspondent banking relationship" and "physical presence" in subsection 1(2) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, as enacted by subsection 19(5) of these Regulations and subsections 21(1), 23(4) and 26(1) and sections 29, 47 and 52 of these Regulations come into force on June 30, 2007.

(3) Subsection 66(2) comes into force on June 23, 2009.

SCHEDULE
(Section 75)

SCHEDULE 7
(Subparagraphs 64(1)(b)(ii) and (1.1)(b)(ii) and (iii))

NON-FACE-TO-FACE IDENTIFICATION METHODS

PART A

IDENTIFICATION METHODS FOR ALL REPORTING ENTITIES

IDENTIFICATION PRODUCT METHOD

1. This method of ascertaining a person's identity consists of referring to an independent and reliable identification product that is based on personal information in respect of the person and a Canadian credit history of the person of at least six month's duration.

CREDIT FILE METHOD

2. This method of ascertaining a person's identity consists of confirming, after obtaining authorization from the person, their name, address and date of birth by referring to a credit file in respect of that person in Canada that has been in existence for at least six months.

ATTESTATION METHOD

3. (1) This method of ascertaining a person's identity consists of obtaining an attestation from a commissioner of oaths in Canada, or a guarantor in Canada, that they have seen one of the documents referred to in paragraph 64(1)(a) of these Regulations. The attestation must be produced on a legible photocopy of the document (if such use of the document is not prohibited by the applicable provincial law) and must include

(a) the name, profession and address of the person providing the attestation;

(b) the signature of the person providing the attestation; and

(c) the type and number of the identifying document provided by the person.

(2) For the purpose of subsection (1), a guarantor is a person engaged in one of the following professions in Canada:

(a) dentist;

(b) medical doctor;

(c) chiropractor;

(d) judge;

(e) magistrate;

(f) lawyer;

(g) notary (in Quebec);

(h) notary public;

(i) optometrist;

(j) pharmacist;

(k) professional accountant (APA [Accredited Public Accountant], CA [Chartered Accountant], CGA [Certified General Accountant], CMA [Certified Management Accountant], PA [Public Accountant] or RPA [Registered Public Accountant]);

(l) professional engineer (P.Eng. [Professional Engineer, in a province other than Quebec] or Eng. [Engineer, in Quebec]); or

(m) veterinarian.

CLEARED CHEQUE METHOD

4. This method of ascertaining a person's identity consists of confirming that a cheque drawn by the person on a deposit account of a financial entity, other than an account referred to in section 62 of these Regulations, has been cleared.

CONFIRMATION OF DEPOSIT ACCOUNT METHOD

5. This method of ascertaining a person's identity consists of confirming that the person has a deposit account with a financial entity, other than an account referred to in section 62 of these Regulations.

PART B

IDENTIFICATION METHODS FOR CREDIT CARD ACCOUNTS

IDENTIFICATION PRODUCT METHOD

1. This method of ascertaining a person's identity consists of referring to an independent and reliable identification product that is based on personal information in respect of the person and a Canadian credit history of the person of at least six month's duration.

CREDIT FILE METHOD

2. This method of ascertaining a person's identity consists of confirming, after obtaining authorization from the person, their name, address and date of birth by referring to a credit file in respect of that person in Canada that has been in existence for at least six months.

INDEPENDENT DATA SOURCE METHOD

3. This method of ascertaining a person's identity consists of consulting a reputable and independent database that is compiled from a directory of a telecommunications entity or a federal, provincial or municipal voter's registry and that contains the names, addresses and telephone numbers of individuals in order to confirm the person's name, address and telephone number.

PART C

IDENTIFICATION METHODS FOR CREDIT CARD ACCOUNT APPLICANTS WITH NO CREDIT HISTORY IN CANADA

INDEPENDENT DATA SOURCE METHOD

1. This method of ascertaining a person's identity consists of consulting a reputable and independent database that is compiled from a directory of a telecommunications entity or a federal, provincial or municipal voter's registry and that contains the names, addresses and telephone numbers of individuals in order to confirm the person's name, address and telephone number.

UTILITY INVOICE METHOD

2. This method of ascertaining a person's identity consists of obtaining a utility service invoice that is issued by a Canadian utility provider in the name of the person and that includes their address.

PHOTOCOPY OF AN IDENTIFICATION DOCUMENT METHOD

3. This method of ascertaining a person's identity consists of obtaining a legible photocopy or electronic image of a document referred to in paragraph 64(1)(a) of these Regulations in respect of the person.

DEPOSIT ACCOUNT STATEMENT METHOD

4. This method of ascertaining a person's identity consists of obtaining a legible photocopy or electronic image of a deposit account statement issued by a financial entity in the name of the person.

N.B. The Regulatory Impact Analysis Statement for these Regulations appears following SOR/2007-121, Proceeds of Crime (Money Laundering) and Terrorist Financing Registration Regulations.

Footnote a

S.C. 2006, c. 12, s. 39

Footnote b

S.C. 2000, c. 17; 2001, c. 41, s. 48

Footnote 1

SOR/2001-317; SOR/2002-185

Footnote 2

SOR/2002-184

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