• Marginal note:Commissioner — supervision of terms, conditions and undertakings

  (1.1) If the Minister specifies that the Commissioner is to supervise a company to determine if it is complying with any terms and conditions that are imposed, or undertakings that are required, by the Minister for the protection of the company’s customers, the Commissioner may take the same measures that the Commissioner could take if the terms and conditions or undertaking were a consumer provision.

• (d) to enhance Canada’s capacity to take targeted measures to protect its financial system and to facilitate Canada’s efforts to mitigate the risk that its financial system could be used as a vehicle for money laundering and the financing of terrorist activities.

Marginal note:Financial transactions to be reported

• 9. (1) 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,

  • (a) any financial transaction, or any financial transaction within a class of financial transactions, specified in a directive issued under Part 1.1 that occurs or that is attempted in the course of their activities; and

  • (b) any prescribed financial transaction that occurs in the course of their activities.

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 and Part 1.1.

Marginal note:Foreign subsidiaries

• 9.7 (1) Every 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 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 entity shall keep and retain a record of that fact in accordance with section 6.

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 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 aux conseillers juridiques

10.1 Les articles 7 et 9 ne s’appliquent pas aux personnes ni aux entités visées aux alinéas 5i) ou j) qui sont, selon le cas, des conseillers juridiques ou des cabinets juridiques, lorsqu’elles fournissent des services juridiques.

Marginal note:Solicitor-client privilege or professional secrecy

11. Nothing in this Part requires a legal counsel to disclose any communication that is subject to solicitor-client privilege or, in Quebec, the professional secrecy of legal counsel.

PART 1.1PROTECTION OF CANADA’S FINANCIAL SYSTEM

Interpretation

Definition of “foreign state”

11.41 In this Part, “foreign state” means a country other than Canada and includes any political subdivision or territory of a foreign state.

Ministerial Directive

Marginal note:Minister’s written directive

• 11.42 (1) In addition to any other measure required by this Act, the Minister may, by written directive, require any person or entity referred to in section 5 to take, in order to safeguard the integrity of Canada’s financial system,

  • (a) any prescribed measure specified in the directive with respect to any financial transaction, or any financial transaction within a class of financial transactions, originating from or bound for any foreign state or foreign entity, that occurs or is attempted in the course of their activities; or

  • (b) any other measure specified in the directive with respect to those transactions.

• Marginal note:Measures

  (2) The measures specified in a directive may include provision for the following matters:

  • (a) the verification of the identity of any person or entity;

  • (b) the exercise of customer due diligence, including ascertaining the source of funds in any financial transaction, the purpose of any financial transaction or the beneficial ownership or control of any entity;

  • (c) the monitoring of any financial transaction or any account;

  • (d) the keeping and retention of any records;

  • (e) the reporting of any financial transaction to the Centre; and

  • (f) compliance with this Part and Part 1.

• Marginal note:Director to communicate directive

  (3) The Minister may require the Director of the Centre to communicate a directive in accordance with the Minister’s instructions.

• Marginal note:Relevant circumstances

  (4) Before issuing a directive, the Minister may take into account any circumstance that the Minister considers relevant. However, the Minister may only issue a directive if

  • (a) an international organization, body, association or coalition or a grouping of states (such as the Financial Action Task Force) of which Canada is a member has called on its members to take measures in relation to a foreign state or foreign entity on the ground that the state’s or entity’s anti-money laundering or anti-terrorist financing measures are ineffective or insufficient; or

  • (b) the anti-money laundering or anti-terrorist financing measures that a foreign state or a foreign entity has implemented are ineffective or insufficient and, as a result, the Minister is of the opinion that there could be an adverse impact on the integrity of the Canadian financial system or a reputational risk to that system.

• Marginal note:Terms and conditions

  (5) The Minister may impose any terms and conditions in the directive that the Minister considers appropriate.

Marginal note:Duty to comply

11.43 The person or entity to which a directive under this Part applies shall comply with it within the time and in the manner specified in the directive.

Marginal note:Foreign subsidiaries

• 11.44 (1) Every 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 foreign companies within the meaning of section 2 of the Insurance Companies Act, shall ensure that their wholly owned subsidiaries that are located outside Canada and that carry out activities similar to those of persons and entities referred to in those paragraphs comply with, when those subsidiaries are permitted to do so by law, any directive issued under this Part except with respect to any reporting measure as contemplated by paragraph 11.42(2)(e).

• Marginal note:Record keeping

  (2) If compliance with a directive by a subsidiary would contravene the laws of the country in which the subsidiary is located, the entity shall keep and retain a record of that fact in accordance with section 6.

Marginal note:Foreign branches

11.45 Every 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 foreign companies within the meaning of section 2 of the Insurance Companies Act, shall ensure that their branches that are located outside Canada and that carry out activities similar to those of persons and entities referred to in those paragraphs comply with, when those branches are permitted to do so by law, any directive issued under this Part except with respect to any reporting measure as contemplated by paragraph 11.42(2)(e).

Marginal note:Inconsistency

11.46 In the event of any inconsistency or conflict between a directive issued under this Part and a regulation made under this Act, the directive prevails to the extent of the inconsistency or conflict.

Marginal note:Statutory Instruments Act

11.47 A directive issued under this Part is not a statutory instrument within the meaning of the Statutory Instruments Act. However, it must be published in the Canada Gazette.

Marginal note:Review

• 11.48 (1) The Minister shall, at least every three years after the issuance of a directive under this Part, review that directive to determine whether it is advisable, in the Minister’s opinion, to amend or revoke it.

• Marginal note:Relevant circumstance

  (2) In reviewing a directive, the Minister may take into account any circumstance that the Minister considers relevant.

Limitation and Prohibition of Financial Transactions

Marginal note:Regulations — limitation and prohibition

• 11.49 (1) The Governor in Council may, on the recommendation of the Minister, make regulations

  • (a) imposing a limitation or a prohibition on any person or entity referred to in section 5, with respect to entering into, undertaking or facilitating, directly or indirectly, any financial transaction, or any financial transaction within a class of financial transactions, originating from or bound for any foreign state or foreign entity;

  • (b) prescribing terms and conditions with respect to a limitation or prohibition referred to in paragraph (a); and

  • (c) excluding any transaction or any class of transactions from a limitation or prohibition imposed under paragraph (a).

• Marginal note:Consultation with the Minister of Foreign Affairs

  (2) The Minister shall consult with the Minister of Foreign Affairs before making a recommendation.

• Marginal note:Relevant circumstances

  (3) The Minister may, before making a recommendation, take into account any circumstance that the Minister considers relevant. However, the Minister may only make a recommendation

  • (a) if

    • (i) an international organization, body, association or coalition or a grouping of states (such as the Financial Action Task Force) of which Canada is a member has called on its members to take measures in relation to a foreign state or foreign entity on the ground that the state’s or entity’s anti-money laundering or anti-terrorist financing measures are ineffective or insufficient, and

    • (ii) there is a risk that money laundering activities or terrorist financing activities may be carried out in that foreign state or by means of that foreign entity; or

  • (b) if the anti-money laundering or anti-terrorist financing measures that a foreign state or a foreign entity has implemented are ineffective or insufficient, the risk of money laundering activities or terrorist financing activities being carried out in that foreign state or by means of that foreign entity is significant and, as a result, the Minister is of the opinion that there could be an adverse impact on the integrity of the Canadian financial system or a reputational risk to that system.

Marginal note:Review

• 11.5 (1) The Minister shall, at least every three years after the making of a regulation under this Part, review that regulation to determine whether it is advisable, in the Minister’s opinion, that it be amended or repealed.

• Marginal note:Relevant circumstances

  (2) In reviewing a regulation, the Minister may take into account any circumstance that the Minister considers relevant.

Marginal note:Foreign branches

11.6 Every 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 foreign companies within the meaning of section 2 of the Insurance Companies Act, shall ensure that their branches that are located outside Canada and that carry out activities similar to those of persons and entities referred to in those paragraphs comply with any regulation made under subsection 11.49(1) when those branches are permitted to do so by law.

Marginal note:Ministerial permit

• 11.7 (1) The Governor in Council may, by order, authorize the Minister to issue to any person or entity referred to in section 5 a permit to enter into, undertake or facilitate a financial transaction or class of financial transactions, specified by the Minister, that is otherwise limited or prohibited by regulation.

• Marginal note:Terms and conditions

  (2) A permit may be subject to any terms and conditions that the Minister considers appropriate.

• Marginal note:Amendment, etc.

  (3) The Minister may amend, suspend, revoke or reinstate a permit.