CANAFE and compliance: an essential pillar of our practice

The United Nations defines money laundering as "any act or attempt to conceal the origin of money or assets derived from criminal activity." Essentially, money laundering is the process by which "dirty money," generated by criminal activity, is transformed into "clean money," the criminal origin of which is difficult to trace.

 

 

The money laundering process consists of three recognized stages

 

1. The placement stage involves introducing the proceeds of crime into the financial system;
2. The layering stage involves converting the proceeds of crime into another form and creating complex layers of financial transactions to obscure the audit trail as well as the origin and ownership of the funds. This stage may involve transactions such as buying and selling stocks, commodities, or real estate; and
3. The integration stage involves reinjecting the laundered proceeds into the economy to create a perception of legitimacy.

 

The money laundering process is ongoing, with dirty money constantly being introduced into the financial system. Under Canadian law, a money laundering offense includes various acts committed or attempted with the intent to conceal or convert property or proceeds of property (e.g., money) knowing or believing that they were obtained from the commission of a designated offense.

 

In this context, a designated offense refers to the most serious offenses under the Criminal Code or any other federal law. This includes drug trafficking, corruption, fraud, counterfeiting, murder, theft, counterfeiting currency, stock manipulation, etc.

 

A money laundering offense may also extend to property or proceeds derived from illegal activities that occurred outside Canada.

 

Special requirements are in place for politically exposed foreign and domestic persons and leaders of international organizations to prevent the entry of funds from corrupt sources into the market. Mortgage lending stakeholders are required to implement a risk assessment program to identify businesses or investors that present a high risk of money laundering, the company being a mortgage lender, the present being applicable to it.

 

Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its regulations, mortgage lending stakeholders are required to exercise due diligence regarding the client/investor and/or underwriter to help prevent or detect money laundering or terrorist financing. For example, the Company is required to report any real or attempted transaction that it suspects is related to money laundering or terrorist financing, including attempts at transactions that have been refused or not completed.

 

Although the Chief Compliance Officer and the President are responsible for overseeing the implementation and maintenance of the Company's anti-money laundering and terrorist financing compliance program, all employees have obligations under the program and the Act.

 

 

At Altura – compliance with FINTRAC is important!

 

We are proud to confirm that we have implemented a comprehensive FINTRAC compliance program and that our employees undergo rigorous ongoing training on the subject!

 

We have, in particular,:

 

1. Appointed a Chief Compliance Officer for FINTRAC;
2. Developed a written manual that includes Policies and procedures aimed at minimizing the risk of money laundering, which provides for example that:

 

• All employees of the Company must comply with these policies and procedures to minimize the risk of money laundering or terrorist financing
• No cash deposits/payments are accepted
• No virtual currency deposits/payments are accepted

 

3. Completed a risk assessment of our business model and our clients
4. Implemented a process to know our borrower clients well (including verifying their identity according to FINTRAC-approved methods, their status (is it a politically vulnerable person (i.e., politically vulnerable nationals ("NPVs"), politically vulnerable foreigners ("EPVs"), and/or leaders of international organizations ("LIOs")), What are the professional activities of the borrower client?, Who are the beneficial owners? (see here), Is the client a designated terrorist on national and international public records?)
5. Implemented ongoing training – FINTRAC Compliance for our employees
6. Maintain mandatory records according to FINTRAC regulations in our corporate electronic archives for a period of 5 years
7. Conduct regulatory monitoring of FINTRAC Guidelines
8. Will file, if necessary, reports of certain mandatory operations to FINTRAC