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The Proceeds of Crime (Money Laundering) and Terrorist Financing Act
What you need to know
The Financial Transactions and Reports Analysis Centre of Canada, or
FINTRAC, collects, analyzes and discloses financial information and
intelligence on suspected money laundering and terrorist financing
activities. It was created as part of a Canadian government initiative to
fight money laundering and terrorist financing, both domestically and
internationally. Businesses and industries who must report to FINTRAC are
required to know their clients and asking for ID is one way to do that.
Can I see some ID please?
The Proceeds of Crime (Money Laundering) and Terrorist Financing Act
(PCMLTFA) requires financial institutions and others covered by the
legislation to identify customers who conduct financial transactions such
as: depositing funds, purchasing a life insurance policy or buying a money
order. The Act also requires them to keep records and identify their
clients.
Why do I have to show ID now when I've been a customer here all my
life?
The business you are dealing with is required by law to ask you for ID.
By providing this information when requested, you will ensure that
financial institutions and others can meet their legal obligation, and
support the fight against money laundering and terrorist financing.
Money laundering
Money laundering is the process used to disguise the source of money or
assets derived from criminal activity. This illegal activity can include
drug trafficking, smuggling, fraud, extortion and corruption. Criminals
must launder the profits and proceeds from these crimes to be able to
enjoy them. The scope of criminal proceeds is significant; the International
Monetary Fund (IMF) estimated that some $500 billion (U.S.) is laundered
worldwide each year. Money laundering occurs worldwide, and the techniques
used are numerous and can be very sophisticated. Technological advances in
e-commerce, the global diversification of financial markets and new
financial products provide further opportunities to launder money and
obscure the trail leading back to the underlying crime.
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Terrorist financing
Terrorist financing operates somewhat
differently from money laundering but no less insidiously.
While terrorist groups do generate funds from criminal
activities such as drug trafficking and arms smuggling, they
also frequently obtain revenue through legal means. Supporters
of terrorist causes may, for example, raise funds from their
local communities by hosting events or membership drives. In
addition, some charity or relief organizations may unwittingly
become the conduit through which donors contribute funds that
may eventually be used to commit a terrorist act. The funds
are then routed to the recipient terrorist organizations
through both informal networks and the formal financial
system. Terrorist activities constitute threats to our
countrys safety and security. An effective response involves,
among other things, efforts to detect and curtail the flow of
money needed to finance such activities. |
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What type of ID do I have to provide?
Under the PCMLTFA, you are required to provide valid
identification such as a birth certificate, a drivers license, or
similar type of document.
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What other information may I be asked to provide?
There are other requirements that might prompt the business you
are dealing with to ask you for more information about the
transaction you are conducting. For instance, you may be asked
whether you are acting on behalf of a third party while
conducting your transaction.
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Where can
I get more information?
To find out more about
the PCMLTFA, FINTRAC, and the fight against money
laundering and terrorist financing, visit FINTRACs Web
site at: www.fintrac.gc.ca or call toll-free:
1-866-346-8722
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