Transcript Photo Album - Choice Money Transfer

Agent Compliance Training
Proceeds of Crime (Money Laundering) &
Terrorist Financing Act (PCMLTFA) Requirements
Money Services Business (MSB) Registration
The PCMLTFA requires money services businesses (MSBs) to register with the Financial
Transactions and Reports Analysis Centre of Canada (FINTRAC).
A MSB is an individual or entity engaged in the business of any of the following:
• Foreign exchange dealing;
• Remitting or transmitting funds by any means or through any person, entity or
• electronic funds transfer network; or
• Issuing or redeeming money orders, traveler's checks or other similar negotiable
instruments except for checks payable to a named person or entity.
Choice agents are covered by Choice’s registration unless your business conducts MSB
activity outside of our agent relationship.
Because you process money transfers, you are subject to the Proceeds of Crime (Money
Laundering) and Terrorist Financing Act (PCMLTFA), the Criminal Code and other anti-money
laundering / anti-terrorism laws and The Financial Transactions and Reports Analysis Centre
of Canada or FINTRAC (Canada's financial intelligence unit, a specialized agency created to
collect, analyze and disclose financial information and intelligence on suspected money
laundering and terrorist activities financing)
Money Laundering Overview:
Money laundering is the attempt to conceal or disguise the nature, location, source,
ownership or control of illegally obtained money. The money laundering process involves at
least three basic steps, which often occur simultaneously:
Placement: the process of placing unlawful cash proceeds, or cash to be used for unlawful
purposes into traditional financial institutions. Through money transmitters the placement
occurs when a remittance is placed using funds derived from illegal activities or intended to
further those activities.
Layering: The process of separating the criminal origin or purpose of funds through the use
of layers of complex financial transactions, such as converting cash into money remittances,
travelers checks, money orders, wire transfers, stored value cards, letters of credit, stocks,
bonds or purchasing valuable assets, such as art or jewelry.
Integration: the process of using an apparently legitimate transaction to disguise the illicit
proceeds, allowing the laundered funds to be disbursed back to the criminal. Integration
through a money transmitter occurs when illegitimately derived cash is remitted and
received and later is used for legitimate purposes.
Structuring: Structuring is the act of breaking up a potentially large transaction into several
smaller ones to avoid reporting or recordkeeping requirements. It is illegal for you or your
clients to structure transactions in order to avoid the recordkeeping or reporting
requirements. Likewise, it is illegal for you or your employees to assist anyone in structuring
transactions in order to avoid recordkeeping or reporting requirements
Implementation of an Anti-Money Laundering Program.
CHOICE MONEY TRANSFER agents requires to have an anti-money laundering program in
place to prevent and detect money laundering. This program needs to ensure that
policies, procedures and controls are introduced and maintained and is designed to
achieve two purposes. Firstly to enable suspicious transactions to be recognized and
reported to the authorities and secondly to ensure that if a customer comes under
investigation, the company can provide the audit trail.
This Anti-Money Laundering Program consists of the following 4 key elements,
encompassing all Bank Secrecy Act regulations:
1. Designate a Compliance Officer
2. Document anti-money laundering procedures and controls, including Know Your
Customer policy, transaction analysis, record-keeping and reporting
3. Establish Anti-Money Laundering Staff training program.
4. Independent review of Anti-Money Laundering Program
Reporting and Recordkeeping
You must retain the physical documents for all money transfers of CAD$1,000 or more
Five(5) years and all reports to Fintrac and any additional Records must be kept in such a
way that they can be provided to FINTRAC within 30 days of a request to examine them.
Both sending and receiving agents must obtain and record specific information
Large Transaction Reports: The Large Cash Transaction Report (LCTR) must be filed with
FINTRAC for each transaction where you receive cash from or on behalf of the same person
that equals CAD$10,000 or more in any consecutive 24-hour period. For Large Cash
Transactions source of income and a second piece of Government issued Photo
Identification . This report must be filed within 15 days of the transaction.
Large International Electronic Funds Transfer Report (EFT)
An Electronic Funds Transfer Report (EFT) must be filed with FINTRAC for each money
transfer involving a large international (EFT) requested by (or on behalf of) the same person
of CAD$10,000 or more, in a single transaction or aggregate in 24 hours. This report must be
filed within five (5) days of the transfer.
Suspicious Transactions Report (STR)
Suspicious transactions are financial activity that has reasonable grounds to suspect that it is
related to a Money Laundering offense. STR must be reported to to FINTRAC within 30
days of the suspicious event.
Red Flags of suspicious activities:
•To aid a customer transact a large sum of money slowly to avoid record keeping
requirements
•To provide false information in the ID Requirement Document
•The transaction is related to the commission of a money laundering or a terrorist
financing activity
•A client processes multiple cash transactions in a single day.
•Two or more individuals, who are obviously together, split up to conduct separate
transactions for under $1,000.00 but which together add up to over 10,000.00
•A client asks an employee how to avoid reporting or record keeping requirements
•An individual attempts to threaten , or bribe an employee
CONVERSATIONS WITH CUSTOMERS
Here are some examples of how to handle, and how not to handle, some customer
statements:
1. “What is the most I can send without having to show ID?”
Wrong:
“$999.00”
Right:
“There is no such amount; we reserve the right to ask for ID at any time.
We are not here to get you in trouble, but nor do we care to get in to trouble because you are
reluctant to show ID.”
2. “Can I get a friend to send the money in his name, or can I just make up a few different
names?”
Wrong:
“Well, what we don’t know won’t hurt us.”
Right:
“No. We have the absolute right to know who owns the money we are
transmitting”
CHOICE MONEY TRANSFER – KYC FOR PROCESS TRANSACTIONS
• C$1000.00 and up including fee m any single day- Need valid acceptable ID information,
DOB, Exp. date.
• C$3000.00 and up in any single day- Need clear valid acceptable ID, DOB, Exp date and
detail job info with occupation. In this case-Compliance form need to be filled up.
• C$3000.00 and up in last 30 days- Need clear valid acceptable ID, DOB, Exp. date and detail
job info with occupation. In this case-Compliance form need to be filled up.
• C$10,000.00 and up in 24 hours- Need clear valid acceptable two piece of ID, DOB, Exp date
and detail job info with occupation. In this case-Compliance form need to be filled up. Also
need proof of income documents.
• C$10,000.00 and up in last 30 days- Need clear valid acceptable two piece of ID, DOB, Exp.
date and detail job info with occupation. In this case-Compliance form need to be filled up.
Also need proof of income documents.
• If you know or suspect that your client is sending or receiving a transaction on behalf of
someone else, then you must also obtain the similar information on that other person.
Acceptable ID
ID such as a Drivers License, Passport, Permanent Residence card or other similar documents
that contain a photo issued by the Province or Territory. Government issued Photo
Identification document(Health insurance cards with photo issued by Ontario, Manitoba and
Prince Edward Island, should never be accepted as ID as the law prohibits it.)
Anti-Terrorist / Sanctions Legislation
A terrorist or terrorist group includes anyone that has as one of their purposes or activities,
facilitated or carried out any terrorist activity. PCMLTFA regulations prohibit any person from
providing or collecting any funds or dealing with a “Listed Person”. A consolidated list is
published and maintained by the Office of the Superintendent of Financial Institutions (OSFI).
Under the Criminal Code and Suppression of Terrorism Regulations, every person is required
to disclose to the Royal Canadian Mounted Police (RCMP) and the Canadian Security
Intelligence Service (CSIS) the existence of property in their possession that they know is
owned or controlled by or on behalf of a terrorist group plus the information about a
transaction or proposed transaction. Whenever a disclosure is made under the Criminal
Code, a report must also be filed with FINTRAC. The form to be used for reporting to FINTRAC
is a Terrorist Group Property Report.
Choice money Transfer (Canada) Ltd Compliance Officers may request additional documents
such as those identify individuals on transactions that are below any threshold due to a
possible match in the OSFI LIST.
Civil and Criminal Penalties
The penalties for violating the PCMLTFA, the Criminal Code, the United Nations Act, or any of
the regulations made under such statutes include fines and possible prison terms.
Under certain circumstances, businesses can be held criminally liable for the acts of their
Employees; it is important for your employees to be trained in these matters and for your
business to have a system in place to ensure employees’ compliance with the laws and
regulations. If you or your employees do not comply, you may be subject to large fines
and/or imprisonment.
Directors or officers of an entity that have committed an offence could also be subject to
penalties for the entity’s non-compliance. Choice Money Transfer may immediately cancel
the contract of any agent who knowingly or negligently fails to comply with the laws and
regulations.
THANKS