Economic Action Plan 2014 Act, No. 1 (S.C. 2014, c. 20)
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Assented to 2014-06-19
PART 6VARIOUS MEASURES
Division 19Money Laundering and Terrorist Financing
2000, c. 17; 2001, c. 41, s. 48Proceeds of Crime (Money Laundering) and Terrorist Financing Act
257. The Act is amended by adding the following after section 5:
Marginal note:Clarification
5.1 For greater certainty, this Part does not apply to persons or entities referred to in paragraph 5(h.1) in respect of the services they provide to persons or entities outside Canada.
Marginal note:2006, c. 12, s. 8
258. Section 9.3 of the Act is replaced by the following:
Marginal note:Politically exposed 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) a politically exposed foreign person, a prescribed family member of a politically exposed foreign person, or a person who the person or entity knows or should reasonably know is closely associated, for personal or business reasons, with a politically exposed foreign person;
(b) a politically exposed domestic person, a prescribed family member of a politically exposed domestic person, or a person who the person or entity knows or should reasonably know is closely associated, for personal or business reasons, with a politically exposed domestic person; or
(c) the head of an international organization, a prescribed family member of the head of an international organization, or a person who the person or entity knows or should reasonably know is closely associated, for personal or business reasons, with the head of an international organization.
Marginal note:Measures — politically exposed foreign persons
(2) If the person or entity determines that it is dealing with a person described in paragraph (1)(a), the person or entity shall obtain the approval of senior management in the prescribed circumstances and take the prescribed measures.
Marginal note:Measures — other persons
(2.1) If the person or entity determines that it is dealing with a person described in paragraph (1)(b) or (c) and considers, based on an assessment referred to in subsection 9.6(2), that the person poses a high risk of committing a money laundering offence or a terrorist activity financing offence, the person or entity shall obtain the approval of senior management in the prescribed circumstances and take the prescribed measures.
Marginal note:Definitions
(3) The following definitions apply in this section.
“head of an international organization”
« dirigeant d’une organisation internationale »
“head of an international organization” means the head of an international organization that is established by the governments of states or the head of an institution of any such organization.
“politically exposed domestic person”
« national politiquement vulnérable »
“politically exposed domestic person” means a person who, at a given time, holds — or has held within a prescribed period before that time — one of the offices or positions referred to in any of paragraphs (a) to (j) in or on behalf of the federal government or a provincial government or the office or position referred to in paragraph (k) in a municipal government:
(a) Governor General, lieutenant governor or head of government;
(b) member of the Senate or House of Commons 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 corporation that is wholly owned directly by Her Majesty in right of Canada or a province;
(g) head of a government agency;
(h) judge of an appellate court in a province, the Federal Court of Appeal or the Supreme Court of Canada;
(i) leader or president of a political party represented in a legislature;
(j) holder of any prescribed office or position; or
(k) mayor.
“politically exposed foreign person”
« étranger politiquement vulnérable »
“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 of a supreme court, constitutional court or other court of last resort;
(i) leader or president of a political party represented in a legislature; or
(j) holder of any prescribed office or position.
Marginal note:Prohibition if unregistered
9.31 (1) No entity referred to in paragraph 5(a), (b), (d) or (e) and no other entity that is referred to in section 5 and that is prescribed shall open or maintain an account for, or have a correspondent banking relationship with, a person or entity referred to in paragraph 5(h.1) unless that person or entity is registered with the Centre under section 11.1.
Definition of “correspondent banking relationship”
(2) 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 paragraph 5(a), (b), (d) or (e) or an entity that is referred to in section 5 and that is prescribed undertakes to provide to a person or entity referred to in paragraph 5(h.1) services such as international electronic funds transfers, cash management, cheque clearing and any prescribed services.
Marginal note:2006, c. 12, s. 8
259. Subsection 9.4(2) of the Act is replaced by the following:
Marginal note:Prohibition — shell bank
(2) No person or entity shall have a correspondent banking relationship with a shell bank as defined in the regulations.
Marginal note:2010, c. 12, s. 1866
260. Sections 9.7 and 9.8 of the Act are replaced by the following:
Marginal note:Foreign branches and 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, in respect of its foreign branches, and in respect of its foreign subsidiaries that carry out activities similar to those of entities referred to in those paragraphs and that are either wholly-owned by the entity or have financial statements that are consolidated with those of the entity, develop policies that establish requirements similar to the requirements of sections 6, 6.1 and 9.6 and ensure that those branches and subsidiaries apply those policies to the extent it is permitted by, and does not conflict with, the laws of the country in which the branch or subsidiary is located.
Marginal note:Board approval of policies
(2) Before the policies referred to in subsection (1) are applied, the entity’s board of directors, if there is one, shall approve them.
Marginal note:Exceptions
(3) Subsection (1) does not apply to
(a) an entity that is a subsidiary of an entity to which that subsection applies; or
(b) an entity that is a subsidiary of a foreign entity that has developed policies that establish requirements for its subsidiaries that are similar to the requirements of sections 6, 6.1 and 9.6, if that subsidiary is applying those policies to the extent it is permitted by, and do not conflict with, the laws of Canada or a province.
Marginal note:Records and reporting
(4) If the application by a foreign branch or a foreign subsidiary of a policy referred to in subsection (1) is not permitted by or would conflict with the laws of the country in which the branch or subsidiary is located, the entity shall keep and retain, in accordance with section 6, a record of that fact and of the reasons why it is not permitted or it would conflict, and shall, within a reasonable time, notify the Centre, and the principal agency or body that supervises or regulates it under federal or provincial law, of that fact and those reasons.
Marginal note:Information exchange between affiliated entities
9.8 (1) Every entity referred to in any of paragraphs 5(a) to (g) that is affiliated with an entity referred to in those paragraphs or with a foreign entity that carries out activities similar to those of entities referred to in those paragraphs shall develop and apply policies and procedures related to the exchange of information between the entity and those affiliated entities for the purpose of detecting or deterring a money laundering offence or a terrorist activity financing offence or of assessing the risk of such an offence.
Marginal note:Affiliation
(2) For the purposes of subsection (1), an entity is affiliated with another entity if one of them is wholly owned by the other, if both are wholly owned by the same entity or if their financial statements are consolidated.
Marginal note:2006, c. 12, s. 10
261. Section 11.1 of the Act is replaced by the following:
Marginal note:Registration requirement
11.1 Except as otherwise provided in the regulations, every person or entity referred to in paragraph 5(h) or (h.1), 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:2006, c. 12, s. 11
262. (1) Subparagraphs 11.11(1)(c)(i) to (iv) of the Act are replaced by the following:
(i) a money laundering offence, or an offence under the laws of a foreign country that is substantially similar to a money laundering offence,
(ii) a terrorist activity financing offence, or an offence under the laws of a foreign country that is substantially similar to a terrorist activity financing offence,
(iii) an offence under this Act or the Proceeds of Crime (money laundering) Act, chapter 26 of the Statutes of Canada, 1991 when convicted on indictment, or an offence under the laws of a foreign country that is substantially similar to an offence under either Act,
(iv) an offence under any of sections 83.18 to 83.231, 354 or 467.11 to 467.13 of the Criminal Code, or an offence under the laws of a foreign country that is substantially similar to such an offence, or
Marginal note:2006, c. 12, s. 11
(2) Paragraphs 11.11(1)(d) and (e) of the Act are replaced by the following:
(d) a person or entity that has been convicted on indictment or convicted more than once for an offence under any of the following, or that has been convicted of an offence under the laws of a foreign country that is substantially similar to an offence under any of the following:
(i) Part X of the Criminal Code,
(ii) the Controlled Drugs and Substances Act, except for the offence under subsection 4(1) of that Act,
(iii) section 39, 44.2, 44.3, 48, 50.2 or 50.3 of the Food and Drugs Act, as that section read immediately before May 14, 1997, or
(iv) section 4, 5, 6, 19.1 or 19.2 of the Narcotic Control Act, chapter N-1 of the Revised Statutes of Canada, 1985, as that section read immediately before May 14, 1997;
(e) an entity that is a corporation in respect of which a director, the chief executive officer, the president or a person who owns or controls, directly or indirectly, 20% or more of the shares has been convicted on indictment of an offence under this Act or the Proceeds of Crime (money laundering) Act, chapter 26 of the Statutes of Canada, 1991 or has been convicted of an offence under the laws of a foreign country that is substantially similar to an offence under either Act;
(3) Subsection 11.11(1) of the Act is amended by adding the following after paragraph (e):
(e.1) a person or entity referred to in paragraph 5(h.1) that, having committed a violation, or a series of minor violations, under this Act that is classified as a serious violation or a very serious violation and being liable to a penalty for it, and 30 days having elapsed since the day on which all proceedings in respect of the violation are ended, has still not paid the penalty together with any interest imposed under section 73.28; or
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