|
|
|
|
|
|
|
|||||
      
|
Proceeds of Crime (Money Laundering) Regulations - Consultation Paper: 2
- Table of Contents - Previous -
Part 2 – Cross-Border Reporting
The provisions in Part 2 of Bill C-22 outline the requirements pertaining to the reporting of the cross-border movement of currency and monetary instruments. Individuals and entities that import, export or transport large amounts of currency or monetary instruments across the Canadian border will be required to report such activities to a Canada Customs officer. Failure to do so may result in the seizure of the cash or monetary instruments being transported. However, any seized currency or monetary instruments will be returned upon payment of a monetary penalty unless Canada Customs has reason to suspect that the currency represents proceeds of crime. The measures dealing with cross-border movements also include review and appeal mechanisms involving all seizures and penalties paid.
A) Cross-Border Reporting
Section 12 of the Bill requires that any person or entity importing or exporting currency or monetary instruments in excess of the prescribed amount to or from Canada report this activity to a Canada Customs officer. The prescribed amount or the reporting threshold, as well as the definition of monetary instruments, are to be determined by regulation. The United States requires persons transporting currency or monetary instruments over US$10,000 to file a report with U.S. Customs.
It is proposed that a similar reporting threshold be adopted, namely C $15,000. It is also proposed that a definition of monetary instruments be adopted that would include traveller's cheques and other bearer instruments such as money orders, personal and cashier cheques and securities.
Regulations required under section 12 also include the form and manner of reporting currency and monetary instruments, as well as the information to be contained in the report and the period within which the report must be made.
It is proposed that a process similar to the existing one for the reporting of goods as regulated by the
Customs Act be implemented with regard to the form and manner of reporting currency and monetary instruments. Therefore, any person or entity importing or exporting currency or monetary instruments in excess of the threshold amount will be required to fill out a report, which will then be forwarded to the Centre. It is expected that this report will be brief, and will be modelled after reports used by the Customs services in other countries.Subsection 12(2) of the Bill also provides for the exemption from the reporting requirements if the prescribed conditions are met. The intent of this provision is to allow for exemptions to be considered for specific entities from whom reports in certain instances might be considered unnecessary (e.g., bulk movements of cash from one financial institution to another).
No exemptions are being proposed at this time. Further consultations are planned with interested parties.
B) Temporary Retention
In order to ensure that a proper report is made in accordance with section 12 of the Bill, section 14 provides Canada Customs with the authority to retain currency or monetary instruments for a prescribed period. The period of the retention is to be prescribed by regulation.
It is proposed that the prescribed period for providing a report for the purposes of Part 2 of the
PCMLA mirror those already provided in regulations under the Customs Act. These regulations currently provide 40 days to remove goods from customs -- and provision is made for an additional period of 30 days to respond to any notice concerning the goods -- before they are considered to be forfeited to the Crown (a total of 70 days).C) Seizure and Forfeiture
Section 18 of the Bill permits a Canada Customs officer to seize currency and monetary instruments -- as forfeit -- that are not reported in accordance with the regulations. This section also provides for the mandatory return of the seized currency or monetary instruments on payment of a prescribed penalty, unless the officer suspects the currency is proceeds of crime. The prescribed penalty is to be set out in the regulations.
It is proposed that the penalty regime for non-reporting, when there is no reasonable suspicion of money laundering, would have fixed penalties ranging from $250 to $1,000, depending on the circumstances of the contravention, including whether the person is a repeat offender or not.
Part 3 – Financial Transactions
and Reports Analysis Centre of Canada
Part 3 of the Bill establishes an independent government body, the Financial Transactions and Reports Analysis Centre of Canada. The Centre will be a central repository for information about suspected money laundering activities across Canada. It will receive and analyse reported information on financial transactions and cross-border movements of currency and monetary instruments, together with other information available to it.
Disclosure of the personal information held by the Centre will be strictly controlled and criminal sanctions will apply if this information is unlawfully disclosed. Section 55 provides that the Centre must first determine that it has "reasonable grounds to suspect that the information would be relevant to investigating or prosecuting a money laundering offence" before a disclosure can be made to the police. The Bill further limits the disclosure to a narrow range of "designated information" outlined in subsection 55(7).
If the Centre has made a disclosure to the police, then it may also provide the same "designated information" to the Canada Customs and Revenue Agency, if the Centre suspects that the information is relevant to an offence of evading or attempting to evade taxes or duties. Similarly, once a disclosure has been made to the police for investigation of a money laundering offence, the Centre may also disclose the "designated information" to the Canadian Security Intelligence Service or to Citizenship and Immigration Canada, if the information is relevant to threats to the security of Canada or to an immigration enforcement action.
Definition of "Designated Information"
Subsection 55(7) of the Bill sets out the "designated information" that the Centre may disclose. Paragraphs 55(7)(a) to (d) specify that this is to be limited to key identifying information, such as name, date, where the transaction occurred, account number, and value of the transaction. Paragraph 55(7)(e) allows for the disclosure of any other similar identifying information that may be prescribed.
It is anticipated the regulations under subsection 55(7) will be developed at a later date, in consultation with interested parties, including the Privacy Commissioner.
Annex
Important Document Links
Bill C-22
- An Act to facilitate combatting the laundering of proceeds of crime, to establish the Financial Transactions and Reports Analysis Centre of Canadahttp://www.parl.gc.ca/36/1/parlbus/chambus/house/bills/government
/C-22/C-22_1/C-22_cover-E.html
C-22 News Release
C-22 Backgrounder
Proceeds of Crime (money laundering) Act
Proceeds of Crime (Money Laundering) Regulations
FATF (40 Recommendations)
- Table of Contents - Previous -
|
|
||||
| Last Updated: 2002-03-20 |
|
||||
