Ready or not: Canada's Bill C-25 compliance deadline arrives
Jun 23 2008 Brett Wolf
Today is a big day for Canadian financial service firms and their anti-money laundering personnel. After months of hurried preparations, and probably more than a few bleeding ulcers, the deadline for compliance with a number of regulations issued pursuant to Bill C-25 has arrived. Interestingly, the answer to the question of whether or not financial institutions are ready depends on whom one asks.
When asked whether banks have all their ducks in a row, Maura Drew-Lytle, a spokeswoman for the Canadian Bankers Association replied in the affirmative.
"The banks have been aware of [the looming Bill C-25 deadline] for some time – I think about 18 months – and were involved in the government consultations. They have been getting their systems ready and policies in place and will be ready for the new requirements Monday," Drew-Lytle told Complinet during an interview on Friday.
Peter Lamey, a spokesman for the Financial Transactions Reports Analysis Centre of Canada, agreed. Lamey told Complinet: "Financial institutions are prepared, based on our conversations and outreach sessions leading up to the June 23 implementation date."
Lawrence Boyce, a vice-president of compliance and registration with the Investment Industry Regulatory Organization of Canada, was less optimistic on the eve of the compliance deadline, despite his participation in FINTRAC's extensive, cross-country Bill C-25 training program.
"The new regulations have been much discussed in industry meetings and seminars. However, implementation presents a number of challenges, including systems requirements that take time, so I cannot say with confidence that every Canadian dealer is 100 per cent ready, although it is possible that they all are. We will see through our ongoing compliance program how ready they are," he said.
Still, some experts have told Complinet that they expect regulators to give financial institutions a limited amount of "grace time" after the deadline. The main thing, according to them, will be whether or not the firms have genuinely tried to comply. With this in mind, it seems inevitable that the purchase of automated systems, such as Complinet's Global Screening Workstation, will go a long way towards keeping the regulators at bay.
As previously reported by Complinet, Canada's parliament enacted C-25 in late 2006. It amended the Proceeds of Crime (Money Laundering) and Terrorist Financing Act in an effort to make Canada's AML laws consistent with the international standards that emanate from the Financial Action Task Force in Paris.
The majority of the related regulations, finalized a year ago, came into force today. Among other things, they require financial institutions to: report attempted suspicious transactions; identify customers in non-face-to-face transactions; carry out new "due diligence" procedures; manage "politically exposed foreign persons"; modify their core compliance regimes; and adjust to a risk-based system.
