Editor's Note: For more upon this s...

Editor's Note: For more upon this subject, refer to the CICA's website at www.cica.ca/ cica/cicawebsite.nsf/public/e_CrimeAct.

Fighting Organized Crime

Not alone does organized crime have a negative social impact upon our communities and in our lives, it confounds a major threat to international financial networks and national economies. As the world economies become increasingly interdependent, financial markets become evermore more vulnerable to the organized crime assemblages who seek to exploit their weaknesses.

Representing the world's largest economies, the collection of Seven founded a Financial Action Task Force (FATF) in 1989 to combat organized crime forward a global basis. Part of the plan included fostering the establishment of international currency laundering controls.

Today FATF includes 26 member nations, the European Commission, and the whirlpool Co-operation Council. FATF's mandate is based upon 40 recommendations first put in place in 1990 and later revised in 1996 These recommendations minister to as the task force's blueprint for establishing domestic coin laundering controls and fostering international cooperation between countries.

In replication to the FATF initiative, the Canadian dominion a member of the G-7 passed into law the originates of Crime (Money Laundering) Act (the Act") forward June 29, 2000. The passage of this Act was followed on the posting of the go forths of Crime (Money Laundering) Regulations (the "egulations') forward February 17, 2001. Immediately following this posting, a 90-day consultation period ensu

Complying with fresh Rules

Entitled "Proceeds of Crime (Money Laundering) Suspicious Transaction Reporting Regulations," the first stake of finalized regulations under the Act were stationed in the Canada Gazette onward September 12, 2001, and came into force forward November 8, 2001.

Where there are reasonable countrys to suspect a transaction is related to wealth laundering, the finalized regulations require accountants to report the transaction to a newly created regulatory agency, the Financial

Transaction and Reports Analysis middle (FinTRAC). The same regulations apply to banks, credit unions, securities dealers, lawyers, foreign exchange dealers, life companies, trust and loan companies, certain management agencies, and casinos.

When the remaining regulations reach [i]or[/i] attain any place [i]or[/i] point into full force, accountants and other entities will have to become largely compliant. To do this, they will be required to unravel policies and procedures in the following areas:

* Ascertaining identity

* Maintaining certain records relating to financial activities

* Taking declarations of financial transactions for amounts in exces of a prescribed amount as settle out in the Regulations and reporting these transactions to (FinTRAC)

Establishing a classification for the reporting of cross-border motions of cash and monetary instruments in exces of a prescribed amount as stake out in the Regulations

It will be mandatory for accountants to positively identify individuals and companies who ways financial transactions pursuant to the Act and hold and retain certain records, besides to be set out in the regulations, for at least five years. In addition, the propos regulations will require accountants to file to FinTRAC and preserve a "large cash transaction record" of a cash transaction in the amount of $10000 or more "in the course of a single transaction." A single transaction is defined as sum of two units or more cash transactions or electronic stores transfers of less than $10000 each that are done within 24 consecutive hours and that total $10000 or more. Accountants will also have to report to FinTRAC any motion of cash and monetary instruments cross-- border that total $10000 or more.

Also, the pending Regulations require accountants to implement a compliance regime that, in addition to developing policies and steps includes the appointment of a compliance officer, the implementation of compliance reviews and an ongoing training and awareness program.

To make secure compliance, the Act gives FinTRAC the power to set in any accountant's business premise at a reasonable time, without a search warrant, and examine records and inquire into the accountant's business and affairs as it relates to the Act and Regulations.

Penalties for non-compliance can be hard They can damage an accountant's (or firm's) reputation in the community-with clients, suppliers, partners, and associates-as well as bringing significant court expenses and the disruptions resulting from an investigation. Fines range from $500000 to $2000000 or to a spell of imprisonment of not more than five years, or the two Reporting Suspicious Transactions The law requires that accountants

report certain financial transactions when there are "reasonable grounds" to suspect the transactions are related to standard of value laundering. According to Section 7 of the Act

every character or entity shall report to the middle [FinTRAC], in the prescribed form and manner, each financial transaction that occurs in the course of their activities and in value of which there are reasonable soils to suspect that the transaction is related to the commission of a coin laundering offence.