Canada: Fall Economic Statement Bill Introduces Anti-Money Laundering And Criminal Code Amendments

The federal government recently introduced Bill C-59, An Act to implement certain provisions of the fall economic statement tabled in Parliament on November 21, 2023 and certain provisions of the budget tabled in Parliament on March 28, 2023 (Bill C-59). Bill C-59 includes a number of amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act ("PCMLTFA") and the Criminal Code.

PCMLTFA Amendments

• "Sanctions evasion offence" reporting requirement – Bill C-59 would require reporting entities under such legislation to report to Financial Transactions and Reports Analysis Centre of Canada ("FINTRAC") when they have reasonable grounds to suspect that a transaction or attempted transaction is related to a "sanctions evasion offence". Although the proposed amendments do not specifically address what is meant by sanctions evasion, a "sanctions evasion offence" is defined as "an offence arising from the contravention of a restriction or prohibition established by an order or a regulation made under the United Nations Act, the Special Economic Measures Act or the Justice for Victims of Corrupt Foreign Officials Act (Sergei Magnitsky Law)." This significantly expands reporting entities' existing sanctioned-related reporting obligations, which are currently limited to disclosing to the Royal Canadian Mounted Police, the Canadian Security Intelligence Service, Global Affairs Canada, and/or the entity's primary federal or provincial regulator (depending upon the particular sanctions measure) the existence of property in their possession or control that is owned, held or controlled by or on behalf of sanctioned persons and any information relating to actual or proposed transactions in respect of such property.
• Private ABM acquirers– Bill C-59 would require entities that provider acquirer services in relation to private automated banking machine to register as money services businesses. "Acquirer" is defined as "an entity that connects a private automated banking machine to a payment card network, as defined in section 3 of the Payment Card Networks Act, to facilitate transactions." "Private automated banking machine" is defined as "any automated banking machine that is not owned or operated by a bank as defined in section 2 of the Bank Act, by an association regulated by the Cooperative Credit Associations Act or by a cooperative credit society, a savings and credit union or a caisse populaire regulated by a provincial Act.‍"
• Additional sharing of information by FINTRAC – Bill C-59 would permit FINTRAC to disclose designated information to the Department of the Environment and the Department of Fisheries and Oceans, subject to certain conditions.

Criminal Code Amendments

• Inference – Bill C-59 would permit a court to infer the knowledge or belief or recklessness required in relation to the offence of laundering proceeds of crime if it is satisfied, given the circumstances of the offence, that the manner in which the accused dealt with the property or its proceeds is markedly unusual or the accused's dealings are inconsistent with lawful activities typical of the sector in which they take place, including business activities. This new inference provision, as well as another new provision relieving the prosecutor of having to prove the accused knew, believed they knew or was reckless as to the specific nature of the designated offence, would not apply where the accused is also charged with the designated offence.
• Special search warrants – Bill C-59 would remove, in the context of special search warrants and restraint orders regarding proceeds of crime, the requirement for the Attorney General to give an undertaking, and permit judges to attach conditions to a special warrant for search and seizure of property that is proceeds of crime.
• Special warrant — digital assets – Bill C-59 would amend provisions relating to production orders for financial data to include elements specific to accounts associated with digital assets, such as the identifier associated with digital assets, and the name and account number of a person whose identifier is associated with digital assets.