Category:Canada Embargoed Countries

From Sanctions Wiki

---

February 16, 2013 - New regulation under PCMLTFA - These amendments will come into force one year after their publication (i.e., in February 2014).

The amendments to the Regulations make the following clarifications to the CDD provisions of the Regulations:

• The term "business relationship" will now be defined in the Regulations. The Regulations will also be amended to clarify that, in order to meet their obligations to identify and report suspicious transactions, reporting entities should conduct ongoing monitoring of business relationships with clients, using a risk-based approach, and should obtain information concerning the purpose of a business relationship when entering into a business relationship with a client.
• The circumstances in which reporting entities should take enhanced CDD measures in respect of high-risk customers, activities or transactions will be clarified to clearly indicate that enhanced measures should be taken in respect of all high-risk clients and activities, and a list of enhanced measures from which reporting entities can choose will be added. The measures include keeping client information up to date and conducting enhanced ongoing monitoring.
• The Regulations require certain reporting entities to obtain identification information, in designated circumstances, from all persons who own 25% or more of a corporation or entity. The amendments specifically clarify that those reporting entities should also obtain documentary evidence from the client that confirms the beneficial ownership information that they have obtained.
• The Regulations will be amended to clarify that no exceptions exist to reporting entities' current obligations to conduct CDD measures in respect of any transaction or activity which gives rise to a suspicion of money laundering or terrorist financing.

Before these amendments to the Regulations come into force, the Financial Transactions and Reports Analysis Centre of Canada (Canada's financial intelligence unit) and the Office of the Superintendent of Financial Institutions (responsible for administering the federal financial institutions statutes in Canada) will provide updated guidance in order to address the comments provided by stakeholders on the previous version of these amendments published in October 2012.

Canada FINTRAC regulations under PCMLTFA

---

Countries or Groups that are Subject to Canadian Economic Sanctions

Canadian sanctions are imposed via:

• Regulations made under the United Nations Act
• Regulations made under the Special Economic Measures Act
• Countries on the Area Control List of the Export and Import Permits Act

Canadian Overview

Canadian Legislation

Canadian List of Designated Persons & Entities Concerning Terrorism Financing

Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)

---

The Special Economic Measures apply to any individual, body corporate, trust, partnership, fund, unincorporated association or organization in Canada and any Canadian citizen or Canadian corporation outside Canada. They impose significant restrictions (specified in the regulations) on transactions with designated individuals and entities.

Under the Regulations, persons in Canada and Canadians outside Canada are essentially prohibited from entering into any transaction with, or providing any service or benefit to, these designated persons. This includes assisting or otherwise causing a prohibited transaction.

More specifically, Canadians or persons in Canada are prohibited from dealing directly or indirectly with any property, wherever situated, that is owned or controlled by designated individuals or entities or their agents, or entering into or facilitating any transaction in respect of such property. In addition, Canadians or persons in Canada may not directly or indirectly provide any goods, wherever situated, to a designated person or entity or provide any financial or related service to or for the benefit of designated persons or entities. Anyone who willfully contravenes or fails to comply with the measures is guilty of an offence and is liable to a fine or imprisonment or both.

Every person in Canada and every Canadian outside Canada must disclose, without delay, to the Royal Canadian Mounted Police (RCMP) the existence of property in their possession or control that they have reason to believe is owned or controlled, directly or indirectly, by a designated person or by an entity owned or controlled by a designated person. Actual or proposed transactions related to such property must also be disclosed.

As with other economic measures of this sort, financial institutions have an additional and continuing duty to search, monitor, freeze, block, and disclose whether they are in possession or control of any property owned or controlled by or on behalf of a designated person. At a minimum it is expected that federally regulated deposittaking institutions search their records for designated persons on a weekly basis and more frequently if need be.

---

Achieving Compliance

Canada increasingly uses trade controls and economic sanctions against failed or failing regimes as part of diplomatic efforts to change the conduct of those regimes. What this means to business is that an activity that was legal one day may become illegal or prohibited the next. As a result, it is critical to have well‐designed internal controls that are continuously monitored to ensure an ability to react effectively to such changes in the law.

Apart from reducing the risk of liability and penalties imposed by legislation, an effective internal compliance regime can minimize business interruptions, informing transactional due diligence, and upholding contractual representations and warranties.

Depending upon the nature of your business and clientele, as well as the comprehensiveness of your existing internal compliance protocols, the following steps may be appropriate:

• Development or revision of internal compliance strategies to ensure proper identification and screening of sanctioned individuals and entities among existing and future customers;
• Awareness training for employees, officers and directors who are responsible for business development, sales, and regulatory compliance in general;
• Review and possible revision of licences, standard sales agreements, supplier or service contracts, real estate leases and financial services and payment arrangements;
• Review of in‐process or contemplated M&A transactions, including asset purchases;
• Screening of property, including intellectual property, in the company’s possession or control which may be owned or controlled, directly or indirectly, by a sanctioned person or entity; and
• For financial institutions, deployment and continuous updating of systems for ongoing searching, monitoring and disclosure of suspect transactions so as to comply with the “duty to determine” imposed by sanctions legislation.

Canadian companies are also reminded that Canada’s imposition of new sanctions and controls on trade will generally supersede, or place new limits on, any import or export permits which may have been granted prior to the sanctions taking effect. Certain exceptions or special permits may be available, but access to these should not be taken for granted.

---

OSFI Lists

The Office of the Superintendent of Financial Institutions Canada (OSFI) maintains a list of individuals and a list of entities listed under Canadian law with available identifiers (DOB, POB, nationality, address, etc.). The lists are available in various formats on the OSFI website.