Order Fixing the Coming into Force of Certain Provisions of (1) the Economic Action Plan 2014 Act, No. 1 on June 1, 2020; and (2) the Budget Implementation Act, 2017, No. 1 on June 1, 2021: SI/2019-43

Canada Gazette, Part II, Volume 153, Number 14

Registration

SI/2019-43 July 10, 2019

ECONOMIC ACTION PLAN 2014 ACT, NO. 1

BUDGET IMPLEMENTATION ACT, 2017, NO. 1

Order Fixing the Coming into Force of Certain Provisions of (1) the Economic Action Plan 2014 Act, No. 1 on June 1, 2020; and (2) the Budget Implementation Act, 2017, No. 1 on June 1, 2021

P.C. 2019-902 June 22, 2019

Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance,

EXPLANATORY NOTE

(This note is not part of the Order.)

Proposal

Pursuant to Economic Action Plan 2014 Act, No. 1, this Order fixes June 1, 2020, as the day on which subsection 256(2), sections 257 and 261, subsection 262(3), and sections 263 to 266, 293, and 296 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Act) come in force.

Pursuant to Budget Implementation Act, 2017, No. 1, this Order fixes June 1, 2021, as the day on which subsections 408(1) and 415(2) and (3), section 417, subsections 423(1) and (3) and sections 425 and 438 of that Act come into force.

Objective

This Order sets the coming-into-force dates for legislative provisions that were required to

Background

Through the Economic Action Plan 2014 Act, No. 1 and the Budget Implementation Act, 2017, No. 1, the Government of Canada introduced legislative amendments to the Act. These changes were made following a five-year statutory review of the Act; they did not come into force upon royal assent because supporting regulations needed to be developed first to operationalize the legislative amendments. Some of the legislative amendments made under Economic Action Plan 2014 Act, No. 1 were brought into force through an order in council in 2016 (P.C. 2016-564 dated June 17, 2016) and were supported by the Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2016.

Among other things, the Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2019 (the 2019 Regulations) improve Canada’s compliance with the international standards set out by the Financial Action Task Force (FATF); help mitigate the money laundering and terrorist financing risks posed by dealers in virtual currency; update the requirements for reporting entities to perform customer due diligence and help bring them in line with FATF recommendations; and, where possible, increase flexibility and ease of doing business and decrease administrative burden incurred by reporting entities in complying with the AML/ATF regime. This Order sets the coming into force date for the remaining legislative amendments, and those that are needed to support the implementation of the 2019 Regulations.

Implications

Money laundering and terrorist financing are a threat to the integrity of the financial system and the security and safety of Canadians at home and abroad. The legislative amendments that are being brought into force through this Order, as well as the 2019 Regulations, serve to update and further strengthen Canada’s AML/ATF Regime.

This Order fixes June 1, 2020, as the day on which provisions relating to obligations for virtual currency dealers and foreign money services businesses under the Economic Action Plan 2014, No. 1 will come into force. These provisions would make businesses dealing in virtual currencies and foreign money services businesses (e.g. Internet-based companies that direct and provide financial services to Canadians) new regulated entities. These entities will be required to implement an AML/ATF compliance program, register with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), and submit Suspicious Transactions Reports and Terrorist Property Reports.

In addition, this Order fixes June 1, 2021, as the day on which the remaining provisions under the Budget Implementation Act, 2017, No. 1 will come into force. The 2017 legislative amendments made several minor technical amendments to ensure that the Act functions as intended and to clarify certain provisions, including the definition of “client” and the application of the Act to trust companies.

The staged approach to the implementation of the legislative amendments and the 2019 Regulations has been adopted to provide the affected businesses with sufficient time to make the necessary changes to become compliant with the rules and effectively become part of Canada’s AML/ATF Regime.

Consultation

The Department of Finance Canada publicly released a formal consultation paper in December 2011, followed by more targeted discussion papers in spring 2013, and a sworn-in session on the draft legislative amendments in fall 2013. Since the introduction of the legislative amendments, the Department of Finance Canada has engaged in several informal discussions with stakeholders between fall 2014 and winter 2015, as well as conducted extensive consultation during the course of developing the 2019 Regulations. In general, reporting entities have indicated support for the changes to the Act and the 2019 Regulations, but they have expressed some concern with respect to implementation costs (e.g. for updating their procedures, policies and systems and training their staff).

Departmental contact

Lynn Hemmings
Acting Director General
Financial Systems Division
Financial Sector Policy Branch
Department of Finance Canada
90 Elgin Street
Ottawa, Ontario
K1A 0G5
Email: fin.fc-cf.fin@canada.ca