Over the past month the Financial T...

Over the past month the Financial Transactions and Reports Analysis midmost point of Canada (FINTRAC) has begun conducting compliance examinations. FINTRAC will continue with these examinations over the year, visiting every business sector shrouded by the Proceeds of Crime (Money Laundering) Terrorist Financing Act.

Which business sectors are covered?

* Financial entities

* Life insurance companies, middlemans and independent agents

* Securities dealers, portfolio managers, and investment counsellors

* Casinos

* Real estate go-betweens or sales representatives

* Agents of the royalty that sell or redeem currency orders

* Foreign exchange dealing

* standard of value services businesses

* Accountants and accounting firms

Accountants and accounting firms

Accountants and accounting firms are required to implement compliance regimes if they receive professional pay s for engaging in the following activities, engage in any of the following activities in succession behalf of any person or entity (other than an employer) or give instructions in consider of these activities on behalf of any one or entity (other than an employer):

* Receiving or paying funds;

* Purchasing or selling securities, real goods or business assets or entities; or

* Transferring supplys or securities by any means.

These activities do not include audit, review, or compilation work carried gone out according to the recommendations in the CICA Handbook.

If you are an employee of a one or entity who is also enthrall to these requirements, your employer is responsible for the compliance regime. For example, if you work for an accounting firm, the compliance regime requirement is the firm's responsibility.

Similarly, if you are an agent of (or are authorized to act forward behalf of) a person or entity who is also expose to these requirements, that other character or entity is responsible for the compliance regime.

What to await from a FINTRAC compliance examination:

* Generally, a FINTRAC compliance officer will call to plant up an appointment by telephone

* FINTRAC will normally send forth a letter confirming the appointment, the location, and the examination's scope

* FINTRAC might prayer that information on compliance policies and acts as well as on any reviews, be provided before the examination day.

* A typical on-site examination this year will last several hours.

* The examination will criterion policies and procedures. The information reviewed might include the four constituents of the compliance regime: the appointment of a compliance officer, the increase of compliance policies and proceedings a periodic review of the compliance policies and performances and ongoing compliance training.

* During the examination, FINTRAC will confront with the designated compliance officer and senior manager. (In the case of a sole-practitioner operating in public practice, the character of designated compliance officer will usually fall to the practitioner.) FINTRAC might also interview other staff members.

* After completing the examination, FINTRAC will delegate a findings letter outlining the examination intent and raising any deficiencies.

* If any deficiencies are originate the business will be look fored to provide FINTRAC with an action plan that addresses these deficiencies within a locate period of time.

Getting ready

Before facing a compliance examination, it would be wise to examine your acknowledge practice and assess how your existing procedures stack up. For instance:

1 Have you appointed a compliance officer? Appointing a compliance officer is an important first degree in bringing your business into compliance with the issues of Crime Money Laundering Terrorist Financing Act.

2 Do you have a compliance regime in place? The proper states of a compliance regime are establish out in FINTRAC Guideline 4: Implementing a Compliance Regime.

3 Do you have policies and conducts in place to ensure that you're meeting your obligations? There are numerous emblems of reportable transactions. Having the appropriate policies and practices in place will ensure that you recognise and report these transactions m a timely manner.

Record keeping

The move forwards of Crime (Money Laundering) Terrorist Financing Act requires that certain transaction records be kept More details concerning this requirement are available in FINTRAC Guideline 6: Record Keeping and Client Identification.

More info

For more details, please visit the FINTRAC website at www.fintrac.gc.ca and review the guidelines. Or call 1-866-FINTRAC for more information.

Peter Lamey is a senior communications officer with FINTRAC, Canadas financial intelligence unit, where he has worked for four years as part of Canada's efforts to combat coin laundering and terrorist financing.

Copyright Institute of Chartered Accountants of British Columbia Aug 2004

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