FINTRAC, the Canadian Financial Intelligence Unit (FIU), has removed it prior guidance on the requirements for an AML/CFT compliance program (Guideline 4) and put up a new page which delineates their requirements for a program that will meet regulatory muster. Here’s the overview section:
Compliance program requirements
Establishing and implementing a comprehensive and effective compliance program is the basis for meeting all of your reporting, record keeping, client identification and know-your-client requirements under the PCMLTFA and associated Regulations.
There are five required elements of a compliance program. Each is considered to be a pillar of an effective anti-money laundering/anti-terrorist financing (AML/ATF) program. The five pillars are:
The appointment of a person who is responsible for the implementation of the compliance program – compliance officer;
The development and application of written compliance policies and procedures that are kept up-to-date, and include enhanced measures to mitigate high risks;
A risk assessment of your business activities and relationships;
The development and maintenance of a written ongoing compliance training program for employees, agents, and others authorized to act on your behalf; and
The institution and documentation of an effectiveness review of your compliance program (policies and procedures, risk assessment and training program) every two years (minimum) for the purpose of testing its overall effectiveness.
The level of detail and sophistication of your compliance program must reflect the size, complexity, structure and risk of exposure of your business to money laundering (ML) and terrorist activity financing (TF).
During a FINTRAC examination, it is important to demonstrate that:
- the required documentation is in place, applied, and is up-to-date;
- your compliance program is designed to effectively address your business’s vulnerability to ML/TF threats and mitigates those that are high risk, if applicable; and
- employees, agents (employed by you), and others authorized to act on your behalf are trained.
Mr. Watchlist will also post each detailed section separately to be considerate of our readers’ bandwidth.
FINTRAC Compliance program requirements