Combatting Financial Crimes and Drug Trafficking Act

This affects almost no one directly. It is a naming clause only.

• Parliament gives this package of changes a formal short title: the Combatting Financial Crimes and Drug Trafficking Act.
• No new duties or rights are created by this clause alone.

Sources in the bill: Clause 1

This affects you if you use a crypto ATM, operate one, run a business or charity that accepts large cash payments, work at a bank or money services company, or are applying to register with FINTRAC.

• Crypto ATM operators must record every transaction their machines process, in line with regulations.
• Crypto ATM operators must verify the identity of every person who uses their machine, in line with regulations.
• Crypto ATM operators must report every transaction to FINTRAC (Canada's financial intelligence agency) within 15 days, including the machine's ID number, wallet addresses, and the user's name, address, and date of birth.
• Crypto ATM operators must cap each user at $1,000 in transactions per 24-hour period on any single machine.
• Crypto ATM operators must give FINTRAC up-to-date details about each machine: location, brand, serial number, cash source, and the wallet address used to run it.
• Banks and similar institutions must refuse cash deposits into an account from anyone who is not the account holder or authorized to give instructions on that account, except in prescribed cases.
• Banks and similar institutions must not open or maintain an account for a crypto ATM operator unless that operator is registered with FINTRAC.
• Anyone engaged in a business, profession, or public fundraising must not accept a cash payment, donation, or deposit of $10,000 or more in a single transaction, with fines on conviction of up to three times the amount accepted. Banks and certain regulated entities are exempt.
• Knowingly operating, hosting, loading cash into, or collecting cash from an unregistered crypto ATM is a criminal offence. On indictment (a more serious court process), fines reach up to $5,000,000 or up to five years in prison, or both.
• FINTRAC must deny a registration application if it has reasonable grounds to believe the applicant gave false or misleading information, including by leaving something out.
• FINTRAC must revoke an existing registration on the same grounds.
• Five new reasons make a business ineligible to register with FINTRAC, including being subject to a compliance order without making real progress, or acting on behalf of a previously rejected applicant.
• Newly registered businesses must confirm within 90 days whether they have started their registered activities and list their bank accounts. If they miss this deadline, they are treated as having stopped all registered activities.
• Newly registered businesses must notify FINTRAC at least 30 days before starting any new activity that requires registration.
• The Finance Minister gets new powers to review any registration for national security or financial-system integrity reasons, to impose conditions or orders on registrants, and to bar a class of applicants from registering for a set period. These ministerial directives and orders are not subject to the standard rules that apply to government regulations.
• The Finance Minister can issue a temporary order restricting a registrant's activities without first hearing from them, if waiting would harm the public interest. The order lasts up to 30 days and can continue if the registrant does not respond.
• A business denied registration because of a ministerial directive cannot appeal to FINTRAC's Director. It may apply to the Finance Minister for a review within 30 days.
• Banks and regulated businesses may collect and use a person's personal information without that person's knowledge or consent if the RCMP or a prescribed government agency shares it for detecting money laundering, terrorist financing, or sanctions evasion. The business must not use that information to interfere with a criminal investigation. No lawsuit can be brought against a business that does this in good faith.
• The ownership-disclosure threshold in registration applications drops from 20% to 5%, meaning anyone owning or controlling 5% or more of a registrant must now be disclosed.

Sources in the bill: Clause 2(1)Clause 2(2)Clause 4Clause 5Clause 6Clause 7Clause 8Clause 9Clause 10Clause 11Clause 12Clause 13Clause 14Clause 15Clause 16Clause 17Clause 18Clause 20Clause 21Clause 23(1)Clause 23(2)Clause 23(4)Clause 24Clause 25Clause 26Clause 27Clause 28Clause 29Clause 30Clause 31Clause 32Clause 33Clause 34Clause 35

This affects you if your personal information is held by a bank or money services business and may be shared with that business by police or a government agency without your knowledge.

• Canada's federal private-sector privacy law (PIPEDA) is updated to allow regulated financial businesses to collect and use a person's personal information without their knowledge or consent, when that information is shared by the RCMP or a prescribed agency for detecting money laundering, terrorist financing, or sanctions evasion.
• A person whose information is collected this way cannot demand to see it under the normal access rules that apply to covertly collected information.

Sources in the bill: Clause 37(1)Clause 37(2)Clause 38

This affects you if you are a compliance officer or legal adviser working under Canada's anti-money-laundering regulations. The practical meaning of the terms does not change.

• The regulations under the anti-money-laundering law are updated so that the definitions of 'shell bank' (a foreign bank with no real physical office) and 'virtual currency' now apply to both the law and its regulations, removing a duplication.

Sources in the bill: Clause 39

This affects you if you are applying to register with FINTRAC or are already registered, especially if you or a co-owner hold a 5% or greater stake in the business.

• The Finance Minister must complete a national-security review of a registration within 180 days of deciding to start one, about six months.
• Applicants must now disclose any licence, registration, or authorization number issued by any federal or provincial regulator for their activities.
• The ownership-disclosure threshold drops from 20% to 5%: anyone owning or controlling 5% or more of the applicant or registrant must now be reported to FINTRAC.

Sources in the bill: Clause 40Clause 41Clause 42

This affects you if you operate a crypto ATM, work at a bank or money services business, or are registered with FINTRAC and need to know when new obligations begin.

• Breaching the new crypto ATM record-keeping and identity-verification rules is classified as a Minor violation, attracting administrative fines.
• Failing to report crypto ATM transactions to FINTRAC is classified as a Serious violation, attracting higher administrative fines.
• Exceeding the $1,000 per-24-hour transaction cap on a crypto ATM is classified as a Very Serious violation, attracting the highest tier of administrative fines.
• Accepting a prohibited third-party cash deposit into a bank account is also classified as a Very Serious violation.
• Most new record-keeping and identity rules take effect 90 days after royal assent. Reporting and machine-information rules take effect 180 days after royal assent. The criminal offence for operating an unregistered crypto ATM takes effect 18 months after royal assent. Some provisions, including the $10,000 cash ban and the new short title, take effect on a date set by the federal cabinet.

Sources in the bill: Clause 43Clause 44Clause 45Clause 46Clause 47Clause 48Clause 49Clause 50(2) and 50(3)Clause 50(4)(a)Clause 50(4)(b)Clause 50(5)Clause 51(1)Clause 51(2)Clause 51(3)Clause 51(4)

This affects you if you send or receive mail in Canada. Police can now legally intercept your mail under criminal or drug laws without Canada Post facing any legal liability for allowing it.

• Police and investigators can now seize, detain, or demand mail under the Criminal Code, the Controlled Drugs and Substances Act, or the Cannabis Act. Canada Post must allow this. Authorities must give Canada Post written notice within 60 days of any seizure, unless the item was already delivered or returned.
• Canada Post, the federal government, and its employees are fully exempt from lawsuits arising from any such seizure. Opening or hiding mail without legal authority remains an offence, but that authority now extends to four federal laws, not just the Customs Act.

Sources in the bill: Clause 52Clause 53