2020 AML Changes for Dealers in Precious Metals and Stones
June 10, 2020, amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its enacted regulations were published in the Canada Gazette.
The amendments create new AML obligations for Dealers in Precious Metals and Stones (DPMS)s, effective June 1, 2021.
DPMSs will have to make a Politically exposed persons (PEP) determination when they enter into a business relationship with a client. In addition, they will also be required to take reasonable measures to determine whether a client from whom they receive an amount of CAD 100,000 or more is a PEP.
A reminder that a business relationship is defined as:
If a person or entity does not have an account with you, a business relationship is formed once you have conducted two transactions or activities for which you have to:
verify the identity of the individual; or
confirm the existence of the entity.
If a positive determination is made, the following records must be kept:
(a) the office or position, and the organization or institution, in respect of which the person is determined to be a politically exposed foreign person, a politically exposed domestic person or a head of an international organization, or a family member of, or a person who is closely associated with, one of those persons;
(b) the date of the determination; and
(c) the source, if known, of the person’s wealth.
The amendments will require DPMSs to comply with existing beneficial ownership requirements that apply to other reporting entities.
This means when identifying an entity, you will need to collect the following information for all Directors and individuals who own or control, directly or indirectly, 25% or more of the organization:
Their full legal name;
Their full home address; and
Information establishing the ownership, control, and structure of the entity.
A record of the reasonable measures to confirm the accuracy of the information, when it is first obtained and in the course of ongoing monitoring of business relationships, must be retained.
A reminder, as a dealer in precious metals and stones, you are responsible for identifying clients for:
Large cash transactions; and
If you have and questions about the changes please contact firstname.lastname@example.org.