Understanding FINTRAC's Compliance Message
Mark Herpel
June 25, 2008
Bill C-25, which went into effect June 23, 2008, introduces significant regulatory revisions to Canada's proceeds of crime (money laundering) and terrorist financing legislation. The Bill requires the disclose of additional information to law enforcement and intelligence agencies plus exchanging compliance-related information with its foreign counterparts.
While some of the new regulations have already started, the parts of the Bill dealing with DGC exchange agents does not start until December 2008...which is still 6 months away."As of December 2008, Bill C-25 will introduce compliance requirements for non-reporting entities as well, including legal counsel, precious metals dealers, stones dealers, and real estate developers." *http://www.advisor.ca/Despite the eye opening articles by Kevin Bell of Bloomberg.com and Kevin Carmichael (globeandmail.com/reportonbusiness.com) digital gold currency was NOT the culprit behind the creation of these additional new regulations.
The wild article from Kevin "hitman" Carmichael of the Globe and Mail quickly and incorrectly links digital gold to: terror financing, money laundering and wrongly slants the article to depict that digital gold could undermine the laws enacted in response to 9/11.OTTAWA — Canada's financial intelligence agency warns that criminals may be exploiting Internet-based companies that convert cash into electronic gold, exposing a new front in the international effort to restrict terrorist financing and money laundering." "At stake is the effectiveness of the financial reporting rules that countries such as the United States, Britain and Canada enacted in response to the Sept. 11, 2001, terrorist attacks. *http://ago.mobile.globeandmail.com/How does any responsible person, in one paragraph, link up DGCs, terror financing and 9/11 ?
Kevin Bell writing for Bloomberg.com takes the mess one step further when he expands on Carmichael's original story by telling Bloomberg readers: "The Web sites[DGC web sites] offer the potential for terrorists to move money and plot attacks, although the agency didn't find any cases of suspected money-laundering through the sites, the Globe said." *http://www.bloomberg.com/The FATF reports that illicit proceeds from drug trafficking are one of the major sources of money laundering in Canada. According to the FAFT Mutual Evaluation Report, published in February 2008, in Canada, there have only been three people ever charged with criminal offenses related to terrorist financing (even while the laws have been on the books for years). Additionally, these three were not associated or linked in any way to Digital Gold Currency. No such charges have ever been filed and there have been no convictions. There has never been a terror financing court case in any country around the globe linked to a DGC. How does the press always try to link these two? Is it just ignorance or is there a motive?
The new regulations do not specifically target or even mention what the Canadian press labels 'so-called e-currencies', but the new law does overlap to include the 'digital currency exchange agent'. As an existing business, exchange agents handle transactions between national currency and digital gold currency (DGC).
Bill C-25 brings Canada´s AML regime in line with revised Financial Action Task Force (FATF) international standards. It's not an extraordinary new measure targeting DGCs. These regulations were published way back in June of 2007 and they enhance client identification, record keeping, and reporting requirements for banks, credit unions, trust and loan companies, life insurance companies, securities dealers, casinos, money services businesses, accountants, and real estate agents. It seems the biggest effect of these new rules will be felt by the local real estate industry.
According to Mr. Micheal Hearns (http://www.launderingmoney.com/), who is one of the Internet's most resourceful and experienced instructors in anti money laundering and detection methods, all real estate agents will now have to take additional steps to ensure they know exactly who they are dealing with and the agent will be required to keep the identifying information on their clients for a minimum of 5 years. *http://launderingmoney.blogspot.com/
While discussing these Canadian changes with digital gold exchange agent Sylvain Falardeau of Canada's xGold.ca, he reports that,"For now, we received a confirmation by FINTRAC that *we are not* considered a Money Service Business and should not register….When I talked to the FINTRAC officer, I asked if he sees any problem to apply if we are forced to in the future. He said that we should not have any problem to get the license because we do not have criminal records."In past years, FINTRAC had focused primarily on serious criminal penalties but according to the new regulations, non-compliance by any money service business can now also result in civil penalties. A big target of these new laws are PEPs or 'politically exposed' (foreign) persons such as judges, politicians, titans of industry from other nations. The new rules require an identification check on the person before completing any transactions. Life insurance providers have already integrated supplementary forms which help to identify PEPs. This adds more record keeping, customer identification, ID verification, due diligence and risk assessment to those businesses affected by the new regulations. It also takes a more pro-active approach to preventing the crime and not just chasing down the offenders.
The new regulations require that all money services businesses in Canada register with FINTRAC. You can read the exact details from the Canadian Government's web site at http://gazetteducanada.gc.ca
DGCmagazine
While some of the new regulations have already started, the parts of the Bill dealing with DGC exchange agents does not start until December 2008...which is still 6 months away."As of December 2008, Bill C-25 will introduce compliance requirements for non-reporting entities as well, including legal counsel, precious metals dealers, stones dealers, and real estate developers." *http://www.advisor.ca/Despite the eye opening articles by Kevin Bell of Bloomberg.com and Kevin Carmichael (globeandmail.com/reportonbusiness.com) digital gold currency was NOT the culprit behind the creation of these additional new regulations.
The wild article from Kevin "hitman" Carmichael of the Globe and Mail quickly and incorrectly links digital gold to: terror financing, money laundering and wrongly slants the article to depict that digital gold could undermine the laws enacted in response to 9/11.OTTAWA — Canada's financial intelligence agency warns that criminals may be exploiting Internet-based companies that convert cash into electronic gold, exposing a new front in the international effort to restrict terrorist financing and money laundering." "At stake is the effectiveness of the financial reporting rules that countries such as the United States, Britain and Canada enacted in response to the Sept. 11, 2001, terrorist attacks. *http://ago.mobile.globeandmail.com/How does any responsible person, in one paragraph, link up DGCs, terror financing and 9/11 ?
Kevin Bell writing for Bloomberg.com takes the mess one step further when he expands on Carmichael's original story by telling Bloomberg readers: "The Web sites[DGC web sites] offer the potential for terrorists to move money and plot attacks, although the agency didn't find any cases of suspected money-laundering through the sites, the Globe said." *http://www.bloomberg.com/The FATF reports that illicit proceeds from drug trafficking are one of the major sources of money laundering in Canada. According to the FAFT Mutual Evaluation Report, published in February 2008, in Canada, there have only been three people ever charged with criminal offenses related to terrorist financing (even while the laws have been on the books for years). Additionally, these three were not associated or linked in any way to Digital Gold Currency. No such charges have ever been filed and there have been no convictions. There has never been a terror financing court case in any country around the globe linked to a DGC. How does the press always try to link these two? Is it just ignorance or is there a motive?
The new regulations do not specifically target or even mention what the Canadian press labels 'so-called e-currencies', but the new law does overlap to include the 'digital currency exchange agent'. As an existing business, exchange agents handle transactions between national currency and digital gold currency (DGC).
Bill C-25 brings Canada´s AML regime in line with revised Financial Action Task Force (FATF) international standards. It's not an extraordinary new measure targeting DGCs. These regulations were published way back in June of 2007 and they enhance client identification, record keeping, and reporting requirements for banks, credit unions, trust and loan companies, life insurance companies, securities dealers, casinos, money services businesses, accountants, and real estate agents. It seems the biggest effect of these new rules will be felt by the local real estate industry.
According to Mr. Micheal Hearns (http://www.launderingmoney.com/), who is one of the Internet's most resourceful and experienced instructors in anti money laundering and detection methods, all real estate agents will now have to take additional steps to ensure they know exactly who they are dealing with and the agent will be required to keep the identifying information on their clients for a minimum of 5 years. *http://launderingmoney.blogspot.com/
While discussing these Canadian changes with digital gold exchange agent Sylvain Falardeau of Canada's xGold.ca, he reports that,"For now, we received a confirmation by FINTRAC that *we are not* considered a Money Service Business and should not register….When I talked to the FINTRAC officer, I asked if he sees any problem to apply if we are forced to in the future. He said that we should not have any problem to get the license because we do not have criminal records."In past years, FINTRAC had focused primarily on serious criminal penalties but according to the new regulations, non-compliance by any money service business can now also result in civil penalties. A big target of these new laws are PEPs or 'politically exposed' (foreign) persons such as judges, politicians, titans of industry from other nations. The new rules require an identification check on the person before completing any transactions. Life insurance providers have already integrated supplementary forms which help to identify PEPs. This adds more record keeping, customer identification, ID verification, due diligence and risk assessment to those businesses affected by the new regulations. It also takes a more pro-active approach to preventing the crime and not just chasing down the offenders.
The new regulations require that all money services businesses in Canada register with FINTRAC. You can read the exact details from the Canadian Government's web site at http://gazetteducanada.gc.ca
DGCmagazine
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