What does this mean?
In the years following its creation, FINTRAC’s compliance efforts were focused on awareness and outreach, with the view compliance could be achieved through education and support.
Over the years, however, this approach has matured. While FINTRAC continues to provide education and support, it now undertakes a series of enforcement actions that are adapted to the sector’s underlying level of knowledge of its obligations and compliance behaviour, as well as the risks associated with non-compliance.
These enforcement actions include:
- observation letters;
- reporting entity validations;
- reports monitoring;
- compliance meetings;
- compliance assessment reports;
- examinations;
- follow-up examinations;
- administrative monetary penalties; and
- non-compliance disclosure to law enforcement.
FINTRAC monitors the reports it receives from reporting entities. If potential non-compliance is found, it can issue observation letters and follow them up with the reporting entity to ensure remedial action has been taken. FINTRAC uses reporting entity validations to confirm whether potential reporting entities are indeed covered by the act and regulations.
Compliance assessment reports are used where FINTRAC has evaluated the risk of money laundering and terrorist financing to be lower, although this would not be the case in the DPMS sector. These assessment reports are used in lieu of examinations and consist of pointed questions businesses are required to answer.
