Not Just a Status Update: New AML Requirements Applicable to Portfolio Managers and Dealers
As has been widely reported in the media, the Emergency Economic Measures Order under the Emergencies Act (Canada) had immediate consequences for registered firms. While the use of the Act has now ended, orders such as this one are a good reminder that firms must always be on the lookout for changes to the designated persons list and for new or amended economic sanctions.
Registrants were required under the emergency order to confirm if they were in possession or control of any property owned, held or controlled by a person or entity that was involved in the trucker blockade protests, or those supporting such protests. These persons were referred to as “designated persons” in the order. We understand that the RCMP provided certain institutions with lists of people who would fall within the definition of a “designated person”. In addition to all other AML obligations pursuant to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, including potentially the filing of suspicious transaction reports, firms had to screen their client lists against these new names. Certain technology solution-based service providers have uploaded these names to their data bases for name checking purposes. In the event a registrant finds out that they have a designated person as a client, a number of actions could be required, including potentially disclosing the existence of the property to the appropriate authorities.
In addition, on February 22 and February 24 the government announced that it would levy new economic sanctions on Russia as a result of its actions in the Ukraine under the Special Economic Measures (Russia) Regulations. These sanctions include a broad prohibition on persons in Canada from engaging in transactions (including financial dealings) in the specified regions and with the named individuals. We expect further sanctions may follow.
These situations by nature change rapidly and must be watched closely. We frequently help clients with their AML obligations, even if some of them are time-limited in scope. If you have any questions about these or any other AML requirements, please reach out to a member of our team.
February 28 2022