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“Know your client” rules for CPAs working in anti-money laundering/anti-terrorist financing (AML/ATF)

Stay updated on the “know your client” rules as CPAs engaged in activities covered by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).

Updated “know your client” rules for accountants and their firms came into force June 1, 2021, and they resulted in some key areas of change CPAs must be aware of, including:

  • client identification 
  • business relationships 
  • beneficial ownership 
  • determining if a third-party is giving instructions
  • politically exposed persons and heads of international organizations

While the specific changes in the AML/ATF legislation vary for each of these areas and need to be considered individually, there are overarching implications for accountants and accounting firms—the need to develop or amend your compliance program which means revising your existing policies, procedures, practices and training program, among other changes, to meet the new requirements.

Links to Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) guidance documents related to the topics covered in this article have been provided and accountants and accounting firms are encouraged to keep abreast of upcoming changes and additional information as announced by FINTRAC.

Key takeaways: 

• key obligations in “know your client” 
• key client identification methods 
• how to identify beneficial ownership 

Reading time: Approximately 15 minutes