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Anti-Money Laundering
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First AML Compliance Effectiveness Review Timing

As a company that gets to work with a lot of startups, and existing companies entering the Canadian market, we get to help folks understand the regulatory landscape in Canada. One of the required elements of a Canadian compliance program is an AML Compliance Effectiveness Review. These reviews must be completed every two years at a minimum. You can think of it like an audit, but for compliance.

The purpose of an effectiveness review is to determine whether your AML compliance program has gaps or weaknesses that may prevent your business from effectively preventing, detecting and deterring money laundering and terrorist financing. Recently, we have seen an increased focus on Effectiveness Reviews during FINTRAC examinations. Specifically, on whether the review really tested the effectiveness of the compliance program as a whole (not just what you say you’re doing, but also what you’re actually doing). This has led to FINTRAC examiners requesting the working papers for completed effectiveness reviews where the report did not clearly describe how the effectiveness was tested and assessed. This is the main reason Outlier has started providing our working papers with the final report. This also provides a pretty good reference point for making sure you are meeting your regulatory expectations.

First Time for Everything

In previous engagements, Outlier has operated on the theory that the clock for when your first review was due stemmed from the MSB’s FINTRAC registration date. However, we were incorrect. It wasn’t until a recent conversation where the registration date preceded any customer transactions by six months, that really spurred on an official clarification from the regulator. The trigger for the 2-year clock to start ticking is not registration but “a registered MSB is required to create a compliance program once it engages in one or more of the MSB-related activities.” This means that the clock starts ticking after the MSB has conducted their first transaction.

Here is a PDF version of the policy interpretation we received from FINTRAC that you can keep for your records.

Potential Corrections

If we have completed a review for you in the past that has a commencement date prior to your first customer transaction, please feel free to reach out so we can amend your report to the proper date.

Upcoming Effectiveness Reviews

While this article talks about your first review, you must also be sure to initiate all subsequent reviews within 2 years of the start date of your previous review. Please note that this is based on the previous commencement date, not the date of completion or issuance of the final report.

Need a Hand?

If you are looking for an idea of pricing for an upcoming review or have questions about a review that is currently underway, please feel free to contact us.

Effectiveness Reviews for Dealers in Virtual Currency

Effective June 1, 2020, dealers in Virtual Currency activities were considered as Money Services Businesses (MSBs) and as such, must comply with MSB obligations under amendments made to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). One obligation is to have an AML effectiveness review at least once every two years. MSBs must start their effectiveness review no later than two years from the start of their previous review or in the case of dealers in Virtual Currency, no later than June 1, 2022, the date they were considered to be MSBs under law.

Such reviews must test your compliance program and effectiveness of your operations. Our reviews follow a similar format to examinations conducted by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), which you can read more about in a previous Blog Post.

We’re Here To Help

If you have not yet engaged or commenced your review, there are still a couple of weeks to be compliant. If you would like to engage Outlier to conduct your AML Compliance Effectiveness Review or have questions regarding this obligation, please get in touch.

Fixed Fee AML Reviews for the Real Estate Sector

No Hassle, Fixed Fee AML Compliance Effectiveness Review Pricing

All real estate developers, brokers and sales representatives are required to have AML Compliance Effectiveness Reviews at least every two years. These reviews involve a review and assessment of your compliance program and operational testing. Real estate developers, brokers and sales representatives will receive a formal review report, and Senior Management must provide signoff on the final report within 30 days of the day it’s issued. While Canadian legislation permits self-reviews, reviews must be independent, something harder to do at small to medium sized firms. The reviewer must be sufficiently qualified. At a minimum, each reviewer must:

  • Demonstrate sufficient understanding of the Canadian regulatory context;
  • Have sufficient experience in conducting AML Compliance Effectiveness Reviews in Canada; and
  • Have maintained up-to-date training and professional qualifications; including, but not limited to, the Certified Anti-Money Laundering Specialist designation.

To make budgeting easier for Canadian real estate developers, brokers and sales representatives, we’re introducing no hassle pricing. To calculate where you fall on the chart, just add up the number of employees and agents you have.

Number of Employees & Sales Agents* AML Compliance Effectiveness Review Price
1 – 50 6,000
51 – 100 7,000
101 – 150 8,000
151 – 200 9,000
200+ Please Call

All prices are subject to applicable taxes. Additional fees apply for staff travel and administration related to the sorting of paper documents (where applicable).

*If you have part-time or seasonal employees, count two part-time employees as one employee. Include business owners who are active in running the business as employees. Count each agent location as one employee. If you’re not sure about the calculation, feel free to contact us.

Coast to Coast to Coast

Our Canadian team is here to serve in all parts of Canada. Given the current COVID-19 pandemic, and to keep costs low, we are currently conducting reviews remotely. To do this, we will review electronic copies of your compliance program and data.

Disclaimers

Outlier cannot be considered an “external reviewer” if we have designed your compliance program or conducted annual training with your staff. Most banking services providers require that you have an external reviewer. Some banking services providers also have specific lists of reviewers whose work they will accept. Please check with your banking services provider to ensure that our review will be acceptable for their purposes.

Need a Hand?

If you’re ready to schedule a review or would like more information, please contact us.

Fixed Fee AML Reviews For Jewellers

One of the first blog posts that we published was “How to Negotiate Your Consulting Contracts Like A Pro.” We’ve been working closely with the Canadian Jeweller’s Association (CJA) and Jeweller’s Vigilance Canada (JVC), and we’re happy to announce two things that we think will help small and mid sized dealers in precious metals and stones (DPMSs) do just that.

Outlier has updated our no hassle fixed-fee pricing for AML Compliance Effectiveness Reviews for DPMSs. The pricing listed on this page is guaranteed to Canadian DPMS businesses through December 2021.

No Hassle, Fixed-Fee AML Compliance Effectiveness Review Pricing

All DPMSs are required to have AML Compliance Effectiveness Reviews at least every two years. These reviews involve a review and assessment of your compliance program and operational testing. DPMSs receive a formal review report, and Senior Management must provide sign off on the final report within 30 days of the day it’s issued.

While Canadian legislation permits DPMSs to conduct self-reviews (CJA and JVC members can access templates to conduct a self-review here free of charge), some banking service providers require their DPMS clients to use an external reviewer.

To make things easier for Canadian businesses, we’re introducing no hassle pricing. To calculate where you fall on the chart, just add up the number of employees and locations (retail, commercial and/or office).

Number of Employees & Locations* AML Compliance Effectiveness Review Price CJA & JVC Member Special Price**
1 – 2 5,000 4,000
3 – 5 5,500 4,400
6 – 10 6,000 4,800
10 – 20 6,500 5,200
21 – 30 7,000 5,600
31 + Call for pricing

All prices are subject to applicable taxes. Additional fees apply for staff travel and administration related to the sorting of paper documents (where applicable).

*If you have part-time or seasonal employees, count two part-time employees as one employee. Include business owners who are active in running the business as employees. Count each location and/or website as one employee. If you’re not sure about the calculation, feel free to contact us.

**Proof of membership is required.

CJA and JVC Member Savings

If you’re not a member of either CJA or JVC  yet, but like saving money you can learn more and become a member at:

Canadian Jeweller’s Association

Jeweller’s Vigilance Canada

Coast to Coast to Coast

Our Canadian team is here to serve DPMSs in all parts of Canada.

If we don’t have a consultant near you, we will keep costs low by conducting your review remotely. To do this, we will review electronic copies of your compliance program and data. You’ll even be able to see us face to face on Skype calls.

Disclaimers

Outlier cannot be considered an “external reviewer” if we have designed your compliance program or conducted annual training with your staff. In some cases, banking service providers require that you have an external reviewer. Some banking service providers also have specific lists of reviewers whose work they will accept. Please check with your banking service provider to ensure that our review will be acceptable for their purposes.

Need a Hand?

If you’re ready to schedule a review or would like more information please contact us.

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