Canada now triaging dirty money activity

Businesses must map movement of clients’ holdings

While crooks and terrorists are as susceptible to COVID-19 as other mortals, underworld cash always seems immune, so Canada’s money-laundering monitor has begun triaging financial transaction reports during the pandemic.

Staffing shortages and business disruption forced by the coronavirus prompted the Financial Transactions and Reports Analysis Centre of Canada, known as FINTRAC, to adjust reporting requirements Wednesday.

A long list of businesses must make regular reports to FINTRAC about the movement of clients’ money, including accountant, banks, casinos, real estate brokers, securities dealers and insurance brokers.

As businesses shutter, staff work from home, workers become sick or are laid off, FINTAC faces disruption in getting the routine filing of required transactions reports to help it track criminal money.

In response, FINTRAC issued pandemic guidelines to focus on the most urgent cases. “When it comes to reporting, priority should be given to submitting suspicious transaction reports (STRS). In exceptional circumstances where a reporting entity may be in possession of critical information related to terrorist activity financing but, for some reason, cannot submit the STR in the usual manner, FINTRAC asks that the report or an email be sent to emergencyreport-declarationurgente@fintraccanafe.gc.ca,” the notice for reporting businesses and entities says.

“Reporting entities are expected to meet all of their obligations, including in relation to reporting,” the notice warns. “However, FINTRAC understands that some reporting entities may find themselves in a situation where they are required to reassign and reprioritize their internal resources in response to COVID-19, which may affect their ability to meet certain obligations.”

The reporting triage seems unavoidable, given the high stakes and declining health situation, said Christine Duhaime, a Vancouver-based lawyer, financial crime advisor and anti-money-laundering specialist.

“I think they had to do this — banks and reporting entities are not going to be able to fulfil their obligations to report and nor will FINTRAC be able to answer the phones.

“FINTRAC is recognizing the position reporting entities are in as a result of coronavirus and helping them to prioritize the most crucial obligations — because money laundering doesn’t stop just because of the coronavirus,” said Duhaime.

FINTRAC is also bracing to operate with its own reduce staffing.

FINTRAC also warned businesses and other reporting entities about expired government identity cards during the health crisis.

Many, if not all, provincial governments have extended the validity of driver’s licenses, vehicle permits and other government identification that expire during the pandemic.

FINTRAC said if a customer or client presents ID that expired after March 1, the businesses must still determined it is authentic, but it can, until further notice, accept the expired document.

FINTRAC has also ended its phone support because of the high number of calls about COVID-19 on government telephone lines. Inquiries should be made by email instead.

FINTRAC IS RECOGNIZING THE POSITION REPORTING ENTITIES ARE IN.