Canadian Lawyer InHouse

November/December 2019

Legal news and trends for Canadian in-house counsel and c-suite executives

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NEWS ROUNDUP 6 ACT UPDATED Anti-money-laundering rules revamped Financial entities must update policies and procedures to adhere to new regulations Significant changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, announced in July by the Department of Finance, will require major changes for financial businesses in their policies and procedures, say legal experts. Regulated entities will face considerable work to prepare for the new regulations, which come into play on June 1, 2020 and, in some cases, on June 1, 2021. "The changes to the law are all-encom- passing. They touch on almost every area," says Jacqueline Shinfield, financial services regulatory partner at Blake Cassels & Graydon LLP. "In-house counsel will have to look at policies and procedures they have in place today, then look at how the law has changed and do a gap analysis. They will have to revise and update policies and procedures and potentially revise and update customer-facing forms to capture the information they need." One of the most significant changes involves the regulation surrounding the reporting of suspicious transactions. Instead of filing a report "within 30 days" as stated by the current policy, the new rule will require these transactions to be filed "as soon as reasonably practicable," leaving room for interpretation, which can present challenges for in-house counsel. "This is a hot-button issue," says Karen Bannon, chief compliance officer for corpo- rate payments at FLEETCOR Companies, Cambridge Global Payments and Comdata. "With this subjective analysis of when something becomes suspicious, it becomes very difficult from a systems perspective to say 'OK, file today or file tomorrow.' It would be better in my view to have a specific date because then you can make a calculation and the system tracks it and sends you reminders." Another potentially troublesome change is to the definition and regulations surrounding electronic funds transfers and their re- cord-keeping requirements. International EFTs face additional changes to the reporting responsibility where multiple regulated entities are involved, thus presenting major challenges to an international payment provider such as Cambridge. "Almost every transaction we do is cross-border so our entire reporting structure will need to be amended and those steps will all have to be reviewed and redone, which takes a significant amount of time for the IT team," says Bannon. Virtual currency is going to be caught "Almost every transaction we do is cross-border so our entire reporting structure will need to be amended."

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