Canada to Update AML Laws for Payments Services, FinTechs and Crowdfunding Platforms
The Canadian government’s federal budget announced that new regulations will be implemented to update AML requirements for payment service providers and crowdfunding platforms.
In February this year, the Government of Canada declared a public order emergency which went away as quickly as the measures were implemented.
The choice of statutory language used by the Government in the Emergency Economic Measures Order and related Emergency Measures Regulations under the Emergencies Act left interested observers wondering whether there were any fundamental changes to the application of Canada’s main federal anti-money laundering/anti-terrorist financing (AML/ATF) laws.
Despite the revocation of the public order emergency, some of these measures will now likely become a permanent part of Canada’s laws.
The 2022 federal budget, tabled on April 7, announced that new regulations will be enacted to extend AML/ATF obligations to payment service providers (PSPs) and crowdfunding platforms, as well as legislative changes to strengthen the main federal AML/ATF and related laws, which includes the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Criminal Code.
Moreover, the government will comprehensively review the AML/AFT regime to introduce new legislative proposals to address any identified gaps in the regime.
Supplementing these commitments is a proposed infusion of $89.9 million over five years to support Canada’s main AML/ATF agency, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and the acceleration of the initiative to implement a publicly accessible beneficial ownership registry for federal companies in Canada.
It is still not known how these changes will affect FinTechs and crowdfunding platforms, or the outcome of the federal government’s pronouncement for an overall review and strengthening of the AML/ATF regime, until draft legislation and/or regulations are published for public review.
Until that time, the temporary public emergencies measures enacted in February will be followed.