On March 22, the Liberal government tabled its federal budget for 2017. Among the many matters addressed, it announced its intention to implement measures aimed at strengthening Canada's ability to combat money laundering and terrorist financing. To achieve this objective, the government proposes steps to: (1) increase transparency into corporate and beneficial ownership of legal persons and trusts; and (2) introduce certain amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
Increased Transparency of Ownership
In order to ensure that law enforcement and other authorities have ready access to information for use in preventing and detecting money laundering, terrorist financing, tax evasion and tax avoidance, the government plans to collaborate with the provinces with a view to implementing a national strategy designed to increase the transparency of legal persons and improve the availability of information relating to the beneficial ownership of legal entities.
For now, it remains unclear what this national strategy will look in execution, but it is likely to include enhanced transparency for trusts as well. The budget indicates that, in connection with increased transparency objectives, the government is also considering changes to tax reporting requirements for trusts.
Amendments to Anti-Money Laundering Legislation
The government also plans to introduce amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the "Act") which are expected to include:
- Expanding the list of recipients permitted to receive financial intelligence related to threats to Canadian security;
- Supporting more effective intelligence on the beneficial owners of legal entities; and
- Making a variety of technical and "other" changes which will strengthen the framework, support compliance, improve the ability of reporting entities to operationalize the Act and ensure the legislation functions as intended.
While it remains to be seen the form that many of the proposed amendments will take, it remains reasonably clear that change is underway and reporting entities and others affected will need to stay tuned for updates.
Canada To Update Anti-Money Laundering And Anti-Terrorist Financing Regime
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