RECORD KEEPING, VERIFYING IDENTITY, REPORTING OF SUSPICIOUS TRANSACTIONS AND REGISTRATION

Record Keeping and Verifying Identity

Marginal note:Record keeping

6. Every person or entity referred to in section 5 shall keep and retain prescribed records in accordance with the regulations.

Marginal note:Verifying identity

6.1 Every person or entity referred to in section 5 shall verify, in the prescribed circumstances and in accordance with the regulations, the identity of any person or entity.

Reporting and Other Requirements

Marginal note:Transactions if reasonable grounds to suspect

7. Subject to section 10.1, every person or entity referred to in section 5 shall report to the Centre, in the prescribed form and manner, every financial transaction that occurs or that is attempted in the course of their activities and in respect of which there are reasonable grounds to suspect that

• (a) the transaction is related to the commission or the attempted commission of a money laundering offence; or

• (b) the transaction is related to the commission or the attempted commission of a terrorist activity financing offence.

Marginal note:Disclosure

• 7.1 (1) Every person or entity referred to in section 5 that is required to make a disclosure 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 shall also make a report on it to the Centre, in the prescribed form and manner.

Marginal note:Inability to establish identity

9.2 No person or entity referred to in section 5 shall open an account for a client, in the prescribed circumstances, if it cannot establish the identity of the client in accordance with the prescribed measures.

Marginal note:Politically exposed foreign persons

• 9.3 (1) Every person or entity that is referred to in section 5 and that is prescribed shall determine, in the prescribed circumstances and in accordance with the regulations, whether it is dealing with a politically exposed foreign person.

• Marginal note:Measures

  (2) If the person or entity determines that it is dealing with a politically exposed foreign person, the person or entity shall obtain the approval of senior management in the prescribed circumstances and take prescribed measures.

• Definition of “politically exposed foreign person”

  (3) For the purposes of this section, “politically exposed foreign person” means a person who holds or has held one of the following offices or positions in or on behalf of a foreign state:

  • (a) head of state or head of government;

  • (b) member of the executive council of government or member of a legislature;

  • (c) deputy minister or equivalent rank;

  • (d) ambassador or attaché or counsellor of an ambassador;

  • (e) military officer with a rank of general or above;

  • (f) president of a state-owned company or a state-owned bank;

  • (g) head of a government agency;

  • (h) judge;

  • (i) leader or president of a political party represented in a legislature; or

  • (j) holder of any prescribed office or position.

  It includes any prescribed family member of such a person.

Marginal note:Correspondent banking

• 9.4 (1) Every entity referred to in any of paragraphs 5(a), (b), (d) and (e) and every other entity that is referred to in section 5 and that is prescribed shall take the following measures before entering into a correspondent banking relationship with a prescribed foreign entity:

  • (a) obtain prescribed information about the foreign entity and its activities;

  • (b) ensure that the foreign entity is not a shell bank as defined in the regulations;

  • (c) obtain the approval of senior management;

  • (d) set out in writing their obligations and those of the foreign entity in respect of the correspondent banking services; and

  • (e) any prescribed measures.

• Marginal note:Prohibition — shell bank

  (2) No person or entity shall enter into a correspondent banking relationship with a shell bank as defined in the regulations.

• Definition of “correspondent banking relationship”

  (3) For the purposes of this section, “correspondent banking relationship” means a relationship created by an agreement or arrangement under which an entity referred to in any of paragraphs 5(a), (b), (d) and (e) or an entity that is referred to in section 5 and that is prescribed undertakes to provide to a prescribed foreign entity services such as international electronic funds transfers, cash management, cheque clearing and any prescribed services.

Marginal note:Electronic funds transfer

9.5 Every person or entity that is referred to in section 5 and that is prescribed shall, in respect of a prescribed electronic funds transfer that occurs in the course of their financial activities,

• (a) include with the transfer the name, address, and account number or other reference number, if any, of the client who requested it, and any prescribed information;

• (b) take reasonable measures to ensure that any transfer that the person or entity receives includes that information; and

• (c) take any prescribed measures.

Marginal note:Compliance program

• 9.6 (1) Every person or entity referred to in section 5 shall establish and implement, in accordance with the regulations, a program intended to ensure their compliance with this Part.

• Marginal note:Risk assessment

  (2) The program shall include the development and application of policies and procedures for the person or entity to assess, in the course of their activities, the risk of a money laundering offence or a terrorist activity financing offence.

• Marginal note:Special measures

  (3) If the person or entity considers that the risk referred to in subsection (2) is high, the person or entity shall take prescribed special measures for identifying clients, keeping records and monitoring financial transactions in respect of the activities that pose the high risk.

Marginal note:Foreign subsidiaries

• 9.7 (1) Every person or entity referred to in any of paragraphs 5(a) to (g), except for authorized foreign banks within the meaning of section 2 of the Bank Act and for authorized foreign companies within the meaning of section 2 of the Insurance Companies Act, shall ensure that their wholly owned subsidiaries, that are located in a country that is not a member of the Financial Action Task Force and that carry out activities similar to those of persons and entities referred to in those paragraphs, develop and apply policies and procedures that are consistent with the requirements of sections 6, 6.1 and 9.6 when the laws of the country permit it.

• Marginal note:Record keeping

  (2) If the development or application by a subsidiary of a policy or procedure referred to in subsection (1) would contravene the laws of the country in which the subsidiary is located, the person or entity shall keep and retain a record of that fact in accordance with section 6.

• Definition of “Financial Action Task Force”

  (3) For the purposes of this section, “Financial Action Task Force” means the Financial Action Task Force on Money Laundering established in 1989.

Marginal note:Foreign branches

9.8 Every entity referred to in paragraphs 5(a) to (g), except for authorized foreign banks within the meaning of section 2 of the Bank Act and for authorized foreign companies within the meaning of section 2 of the Insurance Companies Act, shall ensure that their branches, that are located in a country that is not a member of the Financial Action Task Force and that carry out activities similar to those of persons and entities referred to in those paragraphs, develop and apply policies and procedures that are consistent with the requirements of sections 6, 6.1 and 9.6 when the laws of the country permit it.

Marginal note:Non-application to legal counsel

10.1 Sections 7 and 9 do not apply to persons or entities referred to in paragraph 5(i) or (j) who are, as the case may be, legal counsel or legal firms, when they are providing legal services.

Registration

Application and Revocation

Marginal note:Registration requirement

11.1 Except as otherwise provided in the regulations, every person or entity referred to in paragraph 5(h), those referred to in paragraph 5(l) that sell money orders to the public, and every other person or entity that is referred to in section 5 and that is prescribed must be registered with the Centre in accordance with this section and sections 11.11 to 11.2.

Marginal note:Ineligible for registration

• 11.11 (1) The following persons or entities are not eligible for registration with the Centre:

  • (a) a listed person as defined in section 1 of the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism;

  • (b) a listed entity as defined in subsection 83.01(1) of the Criminal Code;

  • (c) a person or entity that has been convicted of any of the following:

    • (i) a money laundering offence,

    • (ii) a terrorist activity financing offence,

    • (iii) an offence under this Act when convicted on indictment,

    • (iv) an offence under any of sections 83.18 to 83.231, 354 or 467.11 to 467.13 of the Criminal Code, or

    • (v) a conspiracy or an attempt to commit, being an accessory after the fact in relation to, or any counselling in relation to, an offence referred to in subparagraphs (i) to (iv);

  • (d) a person or entity that has been convicted on indictment or convicted more than once for an offence under Part X of the Criminal Code or under the Controlled Drugs and Substances Act except for the offence under subsection 4(1) of that Act;

  • (e) an entity that is a corporation in respect of which a director, the chief executive officer, the president or the person who owns or controls, directly or indirectly, 20 per cent or more of the shares has been convicted on indictment of an offence under this Act; or

  • (f) any prescribed person or entity.

• Marginal note:Revocation of registration

  (2) If the Centre becomes aware that a person or entity referred to in subsection (1) is registered, the Centre shall revoke the registration and shall, without delay, inform the person or entity of the revocation.

Marginal note:Application for registration

• 11.12 (1) An application for registration shall be submitted to the Centre in the prescribed form and manner, shall include a list of the applicant’s agents, mandataries or branches that are engaged, on behalf of the applicant, in the activities referred to in paragraph 5(h), in selling money orders to the public if the applicant is a person or entity referred to in paragraph 5(l), or in any prescribed activities, and shall include any prescribed information.

• Marginal note:Agents, mandataries and branches

  (2) Any agent, mandatary or branch included on the list is not required to register with the Centre when they are acting in that capacity.

Marginal note:Changes to information

11.13 An applicant or a person or entity registered with the Centre shall notify the Centre, in the prescribed form and manner, of any change to the information provided in the application or of any newly obtained information that should have been included in the application within 30 days after the day on which the applicant or the registered person or entity becomes aware of the change or obtains the new information.

Marginal note:Clarifications — applicant

• 11.14 (1) An applicant shall provide the Centre, in the prescribed form and manner, with any clarifications that the Centre may request in respect of the prescribed information and the list referred to in subsection 11.12(1) within 30 days after the day on which the request is made.

• Marginal note:Denial of application

  (2) If the applicant does not provide the Centre with the clarifications within the 30 days, the Centre may deny the application and shall, without delay, inform the applicant of the denial.

Marginal note:Notice of registration

11.15 The applicant is registered with the Centre once the Centre adds the applicant to the registry referred to in subsection 54.1(1). The Centre shall, without delay, send the applicant notice of their registration.

Marginal note:Denial of application

11.16 The Centre shall deny the application of any person or entity referred to in subsection 11.11(1) and shall, without delay, inform the applicant of the denial.

Marginal note:Clarifications — registrant

• 11.17 (1) A registered person or entity shall provide the Centre, in the prescribed form and manner, with any clarifications that the Centre may request in respect of the prescribed information and the list referred to in subsection 11.12(1) within 30 days after the day on which the request is made.

• Marginal note:Revocation of registration

  (2) If the registered person or entity does not provide the Centre with the clarifications within the 30 days, the Centre may revoke the registration and shall, without delay, inform the person or entity of the revocation.

Marginal note:Written reasons

11.18 Any decision to deny an application or revoke a registration must be in writing with reasons.

Marginal note:Renewal of registration

11.19 A registered person or entity shall renew their registration in the prescribed form and manner every two years or within any longer prescribed period.

Marginal note:Cessation of activity

11.2 When a registered person or entity ceases an activity for which they are registered, they shall notify the Centre in the prescribed form and manner within 30 days after the day on which they cease the activity.

Review

Marginal note:Application for review by Director

• 11.3 (1) Within 30 days after the day on which the person or entity receives a decision to deny their application or revoke their registration, the person or entity may apply in writing to the Director of the Centre for a review of the decision and may provide any information in support of their application for review.

• Marginal note:Review by Director

  (2) The Director shall review the decision as soon as possible and shall take into consideration any information that the Director deems relevant.

• Marginal note:Decision of Director

  (3) The Director may either confirm the decision or substitute his or her own decision, and shall, without delay, serve notice of the decision with reasons on the person or entity, together with notice of the right of appeal under subsection 11.4(1).

Appeal to Federal Court

Marginal note:Appeal

• 11.4 (1) A person or entity that applied for a review under subsection 11.3(1) may appeal the Director’s decision to the Federal Court within 30 days after the day on which the decision is served, or within any longer period that the Court allows.

• Marginal note:Appeal

  (2) If the Director does not make a decision within 90 days after the day on which the Director received the application for review, the applicant may appeal to the Federal Court, within 30 days after the day on which the 90-day period expires, the decision to deny the application for registration or revoke the registration.

• Marginal note:Precautions against disclosure

  (3) In an appeal, the Court shall take every reasonable precaution, including, when appropriate, conducting hearings in private, to avoid the disclosure by the Court or any person or entity of information referred to in subsection 55(1).

• a) la personne ayant en sa possession effective ou parmi ses bagages les espèces ou effets se trouvant à bord du moyen de transport par lequel elle arrive au Canada ou quitte le pays ou la personne qui, dans les circonstances réglementaires, est responsable du moyen de transport;

Marginal note:Search of conveyance

• 16. (1) An officer may, in order to determine whether there are, on or about a conveyance, currency or monetary instruments of a value equal to or greater than the amount prescribed for the purpose of subsection 12(1) and that have not been reported in accordance with that subsection, stop, board and search the conveyance, examine anything in or on it and open or cause to be opened any package or container in or on it and direct that the conveyance be moved to a customs office or other suitable place for the search, examination or opening.

• Marginal note:Search of baggage

  (2) An officer may, in order to determine whether there are, in baggage, currency or monetary instruments that are of a value equal to or greater than the amount prescribed for the purpose of subsection 12(1) and that have not been reported in accordance with that subsection, search the baggage, examine anything in it and open or cause to be opened any package or container in it and direct that the baggage be moved to a customs office or other suitable place for the search, examination or opening.

Marginal note:Review of forfeiture

24. The forfeiture of currency or monetary instruments seized under this Part is final and is not subject to review or to be set aside or otherwise dealt with except to the extent and in the manner provided by sections 24.1 and 25.

Marginal note:Corrective measures

• 24.1 (1) The Minister, or any officer delegated by the President for the purposes of this section, may, within 30 days after a seizure made under subsection 18(1) or an assessment of a penalty referred to in subsection 18(2),

  • (a) cancel the seizure, or cancel or refund the penalty, if the Minister is satisfied that there was no contravention; or

  • (b) reduce the penalty or refund the excess amount of the penalty collected if there was a contravention but the Minister considers that there was an error with respect to the penalty assessed or collected, and that the penalty should be reduced.

• Marginal note:Interest

  (2) If an amount is refunded to a person or entity under paragraph (1)(a), the person or entity shall be given interest on that amount at the prescribed rate for the period beginning on the day after the day on which the amount was paid by that person or entity and ending on the day on which it was refunded.

Marginal note:If there is a contravention

• 29. (1) If the Minister decides that subsection 12(1) was contravened, the Minister may, subject to the terms and conditions that the Minister may determine,

Marginal note:Appeal to Federal Court

• 30. (1) A person who requests a decision of the Minister under section 27 may, within 90 days after being notified of the decision, appeal the decision by way of an action in the Federal Court in which the person is the plaintiff and the Minister is the defendant.

Marginal note:Order

33. If, on the hearing of an application made under subsection 32(1), the court is satisfied

• (a) that the applicant acquired the interest or right in good faith before the contravention in respect of which the seizure was made,

• (b) that the applicant is innocent of any complicity in the contravention of subsection 12(1) that resulted in the seizure and of any collusion in relation to that contravention, and

• (c) that the applicant exercised all reasonable care to ensure that any person permitted to obtain possession of the currency or monetary instruments seized would report them in accordance with subsection 12(1),

the applicant is entitled to an order declaring that their interest or right is not affected by the seizure and declaring the nature and extent of their interest or right at the time of the contravention.

Marginal note:Appeal

• 34. (1) A person or entity that makes an application under section 32 or Her Majesty in right of Canada may appeal to the court of appeal from an order made under section 33 and the appeal shall be asserted, heard and decided according to the ordinary procedure governing appeals to the court of appeal from orders or judgments of a court.

Marginal note:Delivery after final order

• 35. (1) The Minister of Public Works and Government Services shall, after the forfeiture of currency or monetary instruments has become final and on being informed by the President that a person or entity has obtained a final order under section 33 or 34 in respect of the currency or monetary instruments, give to the person or entity

Disclosure and Use of Information

Marginal note:Agreements with foreign states

38.1 The Minister, with the consent of the Minister designated for the purpose of section 42, may enter into an agreement or arrangement in writing with the government of a foreign state, or an institution or agency of that state, that has powers and duties similar to those of the Canada Border Services Agency, whereby the Canada Border Services Agency may, if it has reasonable grounds to suspect that the information would be relevant to investigating or prosecuting a money laundering offence or a terrorist activity financing offence, provide information set out in a report made under section 20 to that government, institution or agency.

• (d) subject to section 6 of the Privacy Act, shall retain each report referred to in paragraph (a) and all information referred to in paragraph (a) or (b) for 10 years beginning on the day on which the report is received or the information is received or collected; and

• (e) despite the Library and Archives of Canada Act, shall destroy, 15 years after the day on which a report referred to in paragraph (a) is received, any identifying information contained in the report if the report was not disclosed under subsection 55(3), 55.1(1) or 56.1(1) or (2).

Marginal note:Registrar

• 54.1 (1) The Centre is responsible for establishing and maintaining a registry of the prescribed information submitted under sections 11.12 to 11.3.

• Marginal note:Registry

  (2) The registry shall be organized in any manner and kept in any form that the Centre may determine.

• Marginal note:Public access

  (3) The Centre shall make available to the public the part of the information referred to in subsection (1) that is identifying information as defined in the regulations.

• Marginal note:Verification of information

  (4) The Centre may verify the information contained in any application for registration or any other information submitted under sections 11.12 to 11.3.

• Marginal note:Analysis of information

  (5) The Centre may analyse and assess the information referred to in subsection (4) and, in that case, that analysis or assessment is deemed to be an analysis or assessment conducted under paragraph 54(c).

• Marginal note:Retention of information

  (6) Subject to section 6 of the Privacy Act, the Centre shall retain information referred to in subsection (4) for 10 years beginning on the day on which the Centre denies the registration of an applicant, on which a registered person or entity notifies the Centre that they have ceased their activities, or on which a person or entity is no longer registered with the Centre.

Marginal note:Usefulness of information

56.2 When the Centre receives information from an institution or agency under an agreement or arrangement referred to in subsection 56(1) or (2), the Centre may provide it with an evaluation of whether the information is useful to the Centre.

Marginal note:Immunity from compulsory processes

• 59. (1) Subject to section 36 of the Access to Information Act and sections 34 and 37 of the Privacy Act, the Centre, and any person who has obtained or who has or had access to any information or documents in the course of exercising powers or performing duties and functions under this Act, other than Part 2, is required to comply with a subpoena, a summons, an order for production of documents, or any other compulsory process only if it is issued in the course of court proceedings in respect of a money laundering offence, a terrorist activity financing offence or an offence under this Act in respect of which an information has been laid or an indictment preferred or, in the case of an order for production of documents, if it is issued under section 60, 60.1 or 60.3.

Marginal note:Purpose of application

• 60.3 (1) If the Centre makes a disclosure under paragraph 55(3)(b), the Commissioner of Revenue, appointed under section 25 of the Canada Revenue Agency Act, may, for the purposes of an investigation in respect of an offence that is the subject of the disclosure, after having obtained the approval of the Minister of National Revenue, make an application for an order for disclosure of information.

• Marginal note:Application

  (2) An application shall be made ex parte in writing to a judge and be accompanied by an affidavit sworn on the information and belief of the Commissioner — or a person specially designated by the Commissioner for that purpose — deposing to the following matters:

  • (a) the offence under investigation;

  • (b) the person or entity in relation to which the information or documents referred to in paragraph (c) are required;

  • (c) the type of information or documents — whether in written form, in the form of a report or record or in any other form — obtained by or on behalf of the Director in respect of which disclosure is sought;

  • (d) the facts relied on to justify the belief, on reasonable grounds, that the person or entity referred to in paragraph (b) has committed or benefited from the commission of an offence referred to in subsection (1) and that the information or documents referred to in paragraph (c) are likely to be of substantial value, whether alone or together with other material, to an investigation in respect of that offence;

  • (e) a summary of any information already received from the Centre in respect of the offence; and

  • (f) information respecting all previous applications brought under this section in respect of any person or entity being investigated for the offence.

• Marginal note:Order for disclosure of information

  (3) Subject to the conditions that the judge considers advisable in the public interest, the judge to whom an application is made may order the Director — or any person specially designated in writing by the Director for the purposes of this section — to allow an employee of the Canada Revenue Agency named in the order to have access to and examine all information and documents to which the application relates or, if the judge considers it necessary in the circumstances, to produce the information and documents to the employee and allow the employee to remove them, if the judge is satisfied

  • (a) of the matters referred to in paragraph (2)(d); and

  • (b) that there are reasonable grounds for believing that it is in the public interest to allow access to the information or documents, having regard to the benefit likely to accrue to the investigation if the access is obtained.

  The order must be complied with within the period following the service of the order that the judge may specify.

• Marginal note:Execution in another province

  (4) A judge may, if the information or documents in respect of which disclosure is sought are in a province other than the one in which the judge has jurisdiction, issue an order for disclosure and the order may be executed in the other province after it has been endorsed by a judge who has jurisdiction in that other province.

• Marginal note:Service of order

  (5) A copy of the order shall be served on the person to whom it is addressed in the manner that the judge directs or as may be prescribed by rules of court.

• Marginal note:Extension of period for compliance with order

  (6) A judge who makes an order under subsection (3) may, on application of the Director, extend the period within which it is to be complied with.

• Marginal note:Objection to disclosure of information

  (7) The Director — or any person specially designated in writing by the Director for the purposes of this section — may object to the disclosure of any information or document in respect of which an order under subsection (3) has been made by certifying orally or in writing that it should not be disclosed on the ground that

  • (a) the Director is prohibited from disclosing the information or document by any bilateral or international treaty, convention or other agreement to which the Government of Canada is a signatory respecting the sharing of information related to a money laundering offence or a terrorist activity financing offence, or an offence that is substantially similar to either offence;

  • (b) a privilege is attached by law to the information or document;

  • (c) the information or document has been placed in a sealed package pursuant to law or an order of a court of competent jurisdiction;

  • (d) disclosure of the information or document would be injurious to national security; or

  • (e) disclosure of the information or document would not, for any other reason, be in the public interest.

• Marginal note:Determination of objection

  (8) An objection made under subsection (7) may be determined, on application, in accord­ance with subsection (9), by the Chief Justice of the Federal Court, or by any other judge of that Court that the Chief Justice may designate to hear those applications.

• Marginal note:Judge may examine information

  (9) A judge who is to determine an objection may, if the judge considers it necessary to determine the objection, examine the information or document in relation to which the objection is made. The judge shall grant the objection and order that disclosure be refused if the judge is satisfied of any of the grounds mentioned in subsection (7).

• Marginal note:Limitation period

  (10) An application under subsection (8) shall be made within 10 days after the objection is made or within any greater or lesser period that the Chief Justice of the Federal Court, or any other judge of that Court that the Chief Justice may designate to hear those applications, considers appropriate in the circumstances.

• Marginal note:Appeal to Federal Court of Appeal

  (11) An appeal lies from a determination under subsection (8) to the Federal Court of Appeal.

• Marginal note:Limitation period for appeal

  (12) An appeal under subsection (11) shall be brought within 10 days after the date of the determination appealed from or within any further time that the Federal Court of Appeal considers appropriate in the circumstances.

• Marginal note:Special rules for hearings

  (13) An application under subsection (8) or an appeal brought in respect of that application shall be heard in private and, on the request of the person objecting to the disclosure of the information or documents, be heard and determined in the National Capital Region described in the schedule to the National Capital Act.

• Marginal note:Ex parte representations

  (14) During the hearing of an application under subsection (8) or an appeal brought in respect of that application, the person who made the objection in respect of which the application was made or the appeal was brought shall, on his or her request, be given the opportunity to make representations ex parte.

• Marginal note:Copies

  (15) Where any information or document is examined or provided under subsection (3), the person by whom it is examined or to whom it is provided or any employee of the Centre may make, or cause to be made, one or more copies of it and any copy purporting to be certified by the Director to be a copy made under this subsection is evidence of the nature and content of the original information or document and has the same probative force as the original information or document would have had if it had been proved in the ordinary way.

• Definition of “judge”

  (16) For the purposes of this section, “judge” means a provincial court judge as defined in section 2 of the Criminal Code or a judge as defined in subsection 462.3(1) of that Act.

Marginal note:Information demand

• 63.1 (1) For an examination under subsection 62(1), an authorized person may also serve notice to require that the person or entity provide, at the place and in accordance with the time and manner stipulated in the notice, any document or other information relevant to the administration of Part 1 in the form of electronic data, a printout or other intelligible output.

• Marginal note:Obligation to provide information

  (2) The person or entity on whom the notice is served shall provide, in accordance with the notice, the documents or other information with respect to the administration of Part 1 that the authorized person may reasonably require.

• Marginal note:No examination or copying of certain documents when privilege claimed

  (2) If an authorized person acting under section 62, 63 or 63.1 is about to examine or copy a document in the possession of a legal counsel who claims that a named client or former client of the legal counsel has a solicitor-client privilege in respect of the document, the authorized person shall not examine or make copies of the document.

Marginal note:Disclosure to law enforcement agencies

• 65. (1) The Centre may disclose to the appropriate law enforcement agencies any information of which it becomes aware under section 62, 63 or 63.1 and that it suspects on reasonable grounds is evidence of a contravention of Part 1.

Marginal note:Agreements and arrangements

• 65.1 (1) The Centre may enter into an agreement or arrangement, in writing, with an institution or agency of a foreign state that has powers and duties, similar to those of the Centre, with respect to verifying compliance with requirements to identify persons or entities, keep and retain records or make reports, or with an international organization made up of such institutions or agencies and established by the governments of states, that stipulates

  • (a) that the Centre and the institution, agency or organization may exchange information about the compliance of persons and entities with those requirements and about the assessment of risk related to their compliance;

  • (b) that the information may only be used for purposes relevant to ensuring compliance with the requirements and to assessing risk related to compliance; and

  • (c) that the information will be treated in a confidential manner and not be further disclosed without the express consent of the Centre.

• Marginal note:Disclosure

  (2) The Centre may, in accordance with the agreement or arrangement, provide the institution, agency or organization with information referred to in the agreement or arrangement.

• Marginal note:Usefulness of information

  (3) When the Centre receives information from an institution, agency or organization under an agreement or arrangement, the Centre may provide it with an evaluation of whether the information is useful to the Centre.

Marginal note:Review of Act by parliamentary committee

• 72. (1) Every five years beginning on the day on which this section comes into force, the administration and operation of this Act shall be reviewed by the committee of the House of Commons, of the Senate or of both Houses that is designated or established for that purpose.

• Marginal note:Review by Privacy Commissioner

  (2) Every two years beginning on the day on which this section comes into force, the Privacy Commissioner, appointed under section 53 of the Privacy Act, shall review the measures taken by the Centre to protect information it receives or collects under this Act and shall, within three months after the review, submit a report on those measures to the Speaker of the Senate and the Speaker of the House of Commons, who shall each table the report in the House over which he or she presides without delay after receiving it or, if that House is not then sitting, on any of the first 15 days on which that House is sitting after the Speaker receives it.

PART 4.1NOTICES OF VIOLATION, COMPLIANCE AGREEMENTS AND PENALTIES

Violations

Marginal note:Regulations

• 73.1 (1) The Governor in Council may make regulations

  • (a) designating, as a violation that may be proceeded with under this Part, the contravention of a specified provision of this Act or the regulations;

  • (b) classifying each violation as a minor violation, a serious violation or a very serious violation, and classifying a series of minor violations as a serious violation or a very serious violation;

  • (c) having regard to subsection (2), fixing a penalty, or a range of penalties, in respect of any violation;

  • (d) prescribing the additional penalty to be paid for the purposes of subsection 73.18(1);

  • (e) respecting the service of documents under this Part, including the manner and proof of service and the circumstances under which documents are deemed to be served; and

  • (f) generally for carrying out the purposes and provisions of this Part.

• Marginal note:Maximum penalties

  (2) The maximum penalty for a violation is $100,000 if the violation is committed by a person and $500,000 if the violation is committed by an entity.

Marginal note:Criteria for penalty

73.11 Except if a penalty is fixed under paragraph 73.1(1)(c), the amount of a penalty shall, in each case, be determined taking into account that penalties have as their purpose to encourage compliance with this Act rather than to punish, the harm done by the violation and any other criteria that may be prescribed by regulation.

Marginal note:How contravention may be proceeded with

73.12 If a contravention that is designated under paragraph 73.1(1)(a) can be proceeded with either as a violation or as an offence under this Act, proceeding in one manner precludes proceeding in the other.

Marginal note:Commission of violation

• 73.13 (1) Every contravention that is designated under paragraph 73.1(1)(a) constitutes a violation and the person who commits the violation is liable to a penalty determined in accordance with sections 73.1 and 73.11.

• Marginal note:Notice of violation or compliance agreement

  (2) If the Centre believes on reasonable grounds that a person or entity has committed a violation, the Centre may

  • (a) issue and cause to be served on the person or entity a notice of violation; or

  • (b) issue and cause to be served on the person or entity a notice of violation with an offer to reduce by half the penalty proposed in the notice if the person or entity enters into a compliance agreement with the Centre in respect of the provision to which the violation relates.

Notices of Violation

Marginal note:Contents of notice

• 73.14 (1) When the Centre issues a notice of violation under subsection 73.13(2), the notice shall name the person or entity believed to have committed a violation, identify the violation and set out

  • (a) the penalty that the Centre proposes to impose;

  • (b) the right of the person or entity, within 30 days after the day on which the notice is served or within any longer period that the Centre specifies, to pay the penalty or to make representations to the Director with respect to the violation and the proposed penalty, and the manner for doing so; and

  • (c) the fact that, if the person or entity does not pay the penalty or make representations in accordance with the notice, the person or entity will be deemed to have committed the violation and the Centre will impose the penalty in respect of it.

• Marginal note:Administrative corrections

  (2) If a notice of violation contains any error or omission, the Centre may serve a corrected notice of violation on the person or entity at any time during the period referred to in paragraph (1)(b).

Marginal note:Payment of penalty

• 73.15 (1) If the person or entity pays the penalty proposed in the notice of violation, the person is deemed to have committed the violation and proceedings in respect of it are ended.

• Marginal note:Representations to Director

  (2) If the person or entity makes representations in accordance with the notice, the Director shall decide, on a balance of probabilities, whether the person or entity committed the violation and, if so, may, subject to any regulations made under paragraph 73.1(1)(c), impose the penalty proposed, a lesser penalty or no penalty.

• Marginal note:Failure to pay or make representations

  (3) A person or entity that neither pays the penalty nor makes representations in accordance with the notice is deemed to have committed the violation and the Centre shall impose the penalty proposed in the notice.

• Marginal note:Notice of decision and right of appeal

  (4) The Director shall cause notice of any decision made under subsection (2) or the penalty imposed under subsection (3) to be issued and served on the person or entity together with, in the case of a decision made under subsection (2) in respect of a serious violation or very serious violation, notice of the right of appeal under subsection 73.21(1).

Compliance Agreements

Marginal note:Contents of compliance agreement

• 73.16 (1) When the Centre offers to enter into a compliance agreement under paragraph 73.13(2)(b), the agreement shall

  • (a) identify the violation and provide that the person or entity will comply with the provision to which the violation relates within the period, and be subject to the terms and conditions, specified in the agreement; and

  • (b) set out the amount that the person or entity will have to pay as the reduced penalty for the violation if the compliance agreement is entered into.

• Marginal note:Refusal to enter into agreement

  (2) The person or entity shall enter into the compliance agreement and pay the reduced penalty within 10 days after receiving the notice of violation and, if it does not do so, the person or entity is deemed to have refused to enter into the agreement, and the full penalty proposed in the notice of violation and section 73.15 apply.

• Marginal note:Extension of period

  (3) The Centre may extend the period referred to in paragraph (1)(a) if the Centre is satisfied that the person or entity with which the compliance agreement was entered into is unable to comply with it within that period for reasons beyond their control.

Marginal note:Compliance agreement complied with

73.17 If the Centre considers that a compliance agreement has been complied with, the Centre shall serve a notice to that effect on the person or entity and, on the service of the notice, no further proceedings may be taken against the person or entity with respect to the violation.

Marginal note:Compliance agreement not complied with

• 73.18 (1) If the Centre considers that a compliance agreement has not been complied with, the Centre may issue and serve a notice of default on the person or entity to the effect that the person or entity is liable to pay the remainder of the penalty set out in the notice of violation and a prescribed additional penalty.

• Marginal note:Contents of notice

  (2) A notice of default shall include the date, which shall be 30 days after the day on which the notice is served, on or before which an application for review may be filed and particulars of how the application may be filed.

• Marginal note:No set-off or compensation

  (3) On the service of a notice of default, the person or entity served has no right of set-off or compensation against any amount that they spent under the compliance agreement.

Marginal note:Application for review

• 73.19 (1) A person or entity served with a notice of default under subsection 73.18(1) may, on or before the date specified in the notice or within any further time that the Centre allows, file an application for review by the Director.

• Marginal note:Review

  (2) The Director may confirm the Centre’s decision or decide that the person or entity has complied with the compliance agreement.

• Marginal note:Failure to pay or apply for review

  (3) A person or entity that neither pays the amounts set out in the notice of default nor files an application for review in accordance with the notice is deemed to have not complied with the compliance agreement and shall pay the amounts without delay.

• Marginal note:Notice of decision and right of appeal

  (4) The Director shall cause notice of the decision to be issued and served on the person or entity together with, in the case of a serious violation or very serious violation, notice of the right of appeal under subsection 73.21(1).

Marginal note:Deemed violation

73.2 A person or entity that enters into a compliance agreement is deemed to have committed the violation in respect of which the agreement was entered into.

Appeal to Federal Court

Marginal note:Right of appeal

• 73.21 (1) A person or entity on which a notice of a decision made under subsection 73.15(2) or 73.19(2) is served, in respect of a serious violation or very serious violation, may, within 30 days after the day on which the notice is served, or within any longer period that the Court allows, appeal the decision to the Federal Court.

• Marginal note:Appeal — no notice of decision

  (2) If the Director does not cause notice of a decision to be issued and served under subsection 73.15(4) within 90 days after the completion of representations made under subsection 73.15(2), the person or entity that made the representations may appeal the penalty proposed in the notice of violation to the Federal Court, within 30 days after the day on which the 90-day period expires.

• Marginal note:Appeal — no notice of decision

  (3) If the Director does not cause notice of a decision to be issued and served under subsection 73.19(4) within 90 days after the day on which the Director received the application for review under subsection 73.19(1), the person or entity that filed the application may appeal to the Federal Court the amounts set out in the notice of default referred to in subsection 73.18(1), within 30 days after the day on which the 90-day period expires.

• Marginal note:Precautions against disclosure

  (4) In an appeal, the Court shall take every reasonable precaution, including, when appropriate, conducting hearings in private, to avoid the disclosure by the Court or any person or entity of information referred to in subsection 55(1).

• Marginal note:Powers of Court

  (5) On an appeal, the Court may confirm, set aside or, subject to any regulations made under paragraph 73.1(1)(c), vary the decision of the Director.

Publication

Marginal note:Publication

73.22 When proceedings in respect of a violation are ended, the Centre may make public the nature of the violation, the name of the person or entity that committed it, and the amount of the penalty imposed.

Rules about Violations

Marginal note:Violations not offences

• 73.23 (1) For greater certainty, a violation is not an offence.

• Marginal note:Non-application of section 126 of the Criminal Code

  (2) Section 126 of the Criminal Code does not apply in respect of any obligation or prohibition under this Act whose contravention is a violation under this Act.

Marginal note:Due diligence available

• 73.24 (1) Due diligence is a defence in a proceeding in relation to a violation.

• Marginal note:Common law principles

  (2) Every rule and principle of the common law that renders any circumstance a justification or an excuse in relation to a charge for an offence applies in respect of a violation to the extent that it is not inconsistent with this Act.

Collection of Penalties

Marginal note:Debts to Her Majesty

• 73.25 (1) A penalty and any interest due in respect of the penalty constitute a debt due to Her Majesty in right of Canada and may be recovered in the Federal Court.

• Marginal note:Time limit

  (2) No proceedings to recover a debt referred to in subsection (1) may be commenced after the period of five years that begins on the day on which the debt became payable.

• Marginal note:Proceeds payable to Receiver General

  (3) A penalty paid or recovered under this Part is payable to and shall be remitted to the Receiver General.

Marginal note:Certificate

• 73.26 (1) The unpaid amount of any debt referred to in subsection 73.25(1) may be certified by the Director.

• Marginal note:Registration in Federal Court

  (2) Registration in the Federal Court of a certificate made under subsection (1) has the same effect as a judgment of that Court for a debt of the amount specified in the certificate and all related registration costs.

Marginal note:Collecting penalties

• 73.27 (1) The Centre may, for the purpose of collecting penalties proposed in a notice of violation issued under subsection 73.13(2) or imposed under this Part, enter into a contract, memorandum of understanding or other agreement with a department or an agency of the Government of Canada or the government of a province and with any other person or organization, inside Canada, in its own name or in the name of Her Majesty in right of Canada.

• Marginal note:Disclosure of information

  (2) The Centre may disclose to the other party of the contract, memorandum or agreement any information required to collect the penalties.

• Marginal note:Use of information

  (3) The other party shall not use the information referred to in subsection (2) for any purpose other than collecting the penalties.

Marginal note:Interest

73.28 If a person or entity fails to remit a penalty payable under this Part to the Receiver General, the person or entity shall pay to the Receiver General interest on the amount of the penalty. The interest shall be calculated at the prescribed rate for the period beginning on the first day after the day on which the amount was required to be paid and ending on the day on which the amount is paid.

Marginal note:Garnishment

• 73.29 (1) If the Director is of the opinion that a person or entity is or is about to become liable to make a payment to a person or entity liable to pay a penalty or interest under this Part, the Director may, by written notice, require the first person or entity to pay without delay to the Receiver General, on account of the second person’s or entity’s liability, all or part of the money otherwise payable to the second person or entity.

• Marginal note:Applicability to future payments

  (2) If the Director requires an employer to pay to the Receiver General money otherwise payable to an employee as remuneration,

  • (a) the requirement is applicable to all future payments of remuneration until the liability is satisfied; and

  • (b) the employer shall pay to the Receiver General out of each payment of remuneration the amount that the Director stipulates in the notice.

• Marginal note:Discharge of liability

  (3) The receipt of the Director is a good and sufficient discharge of the original liability to the extent of the payment.

Marginal note:Write-off

• 73.3 (1) The Director may write off in whole or in part a penalty or interest payable by a person or entity under this Part.

• Marginal note:Effect of write-off

  (2) The writing off of a penalty or interest under this section does not affect any right of Her Majesty to collect or recover the penalty or interest.

General Provisions

Marginal note:Evidence

73.4 In a proceeding in respect of a violation or a prosecution for an offence, a notice of violation purporting to be issued under subsection 73.13(2), a notice of decision purporting to be issued under subsection 73.15(4) or 73.19(4), a notice of default purporting to be issued under subsection 73.18(1) or a certificate purporting to be made under subsection 73.26(1) is admissible in evidence without proof of the signature or official character of the person appearing to have signed it.

Marginal note:Time limit

• 73.5 (1) No proceedings in respect of a violation may be commenced later than two years after the subject-matter of the proceedings became known to the Centre.

• Marginal note:Certificate of Centre

  (2) A document appearing to have been issued by the Centre, certifying the day on which the subject-matter of any proceedings became known to the Centre, is admissible in evidence without proof of the signature or official character of the person appearing to have signed it and is, in the absence of evidence to the contrary, proof of the matter asserted in it.

Marginal note:General offences

74. Every person or entity that knowingly contravenes any of sections 6, 6.1 or 9.1 to 9.3, subsection 9.4(2), sections 9.5 to 9.7 or 11.1, subsection 12(1) or (4) or 36(1), section 37, subsection 55(1) or (2), section 57 or subsection 62(2), 63.1(2) or 64(3) or the regulations is guilty of an offence and liable

Marginal note:Registry

77.1 Every person or entity that provides information to the Centre under section 11.12, 11.13, 11.14 or 11.3 and that knowingly makes any false or misleading statement or knowingly provides false or misleading information to a person responsible for carrying out functions under this Act is guilty of an offence and liable

• (a) on summary conviction, to a fine of not more than $50,000 or to imprisonment for a term of not more than six months, or to both; or

• (b) on conviction on indictment, to a fine of not more than $500,000 or to imprisonment for a term of not more than five years, or to both.

Marginal note:Offence by employee, agent or mandatary

79. In a prosecution for an offence under section 75, 77 or 77.1,

• (a) it is sufficient proof of the offence to establish that it was committed by an employee, agent or mandatary of the accused, whether or not the employee, agent or mandatary is identified or has been prosecuted for the offence; and

Marginal note:Time limitation

81. Proceedings under paragraph 74(a), 75(1)(a) or 76(a), subsection 77(1) or paragraph 77.1(a) may be instituted within, but not after, five years after the time when the subject-matter of the proceedings arose.

Marginal note:Agreements

• 13. (1) Subject to sections 38 and 38.1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, the Agency may, with the approval of the Governor in Council, on the recommendation of the Minister and the Minister of Foreign Affairs, enter into an agreement with a foreign state or an international organization, for the purposes of carrying out the mandate of the Agency.