Introduction to AML Support/FINTRAC Requirements/LCTR

This purpose of the User Guide is intended to explain the following parts:

• Identification of PEFP customers (Politically Exposed Foreign Person).
• Intend use

Banks need to report all the large cash transactions to FINTRAC within 15 days of the transaction date. A large cash transaction is one or more transactions greater than or equal to $10K CAD equivalent within a 24 hours. It has record-keeping and identification obligations as it relates to large cash transactions:

• Keep a large cash transaction record.
• Identify the conductor initiating the transaction.
• Identify the account holder(s) of the transaction.
• Make third party determinations.

Banks may also opt to create a manual LCTR if they believe the conductor has transacted in more than one transaction that is greater than or equal to $10K CAD equivalent.

PEFP

A PEFP is a customer of a bank or financial institution, where additional controls and restrictions apply to account opening and subsequently on their financial transactions across different financial product classes such as bank deposits, insurance, securities, and so on.

The Financial Analysis and Reports Analysis Centre of Canada (FINTRAC) provide the following definition of a PEFP: A PEFP is an individual who holds or has held one of the following offices or positions in or on behalf of a foreign state:

• Head of state or head of government.
• Member of the executive council of government or member of a legislature.
• Meputy minister or equivalent rank.
• Ambassador or attaché or counsellor of an ambassador.
• Military officer with a rank of general or above.
• President of a state-owned company or a state-owned bank.
• Head of a government agency.
• Judge.
• Leader or president of a political party represented in a legislature.

It includes prescribed family members of such an individual.

Prescribed family members include:

• The PEFP's spouse or common-law partner.
• The PEFP's child.
• The PEFP's mother or father.
• The mother or father of the PEFP's spouse or common-law partner (mother-in-law or father-in-law).
• A child of the PEFP's mother or father (brother, sister, half-brother, half-sister).

The identification of PEFP customers is being handled by a third party system called Complinet. Temenos Transact will enable the bank to flag a customer as a PEFP.

Intended Use and Third Party Functionality for AML

The Intended use and third party information are required as part of Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).

The system has the ability to store the purpose of opening an account, deposit, loans, etc. Based on type of account, the system will display the valid intended use options.

Also, the system has the ability to indicate whether the accounts, deposits, loans, etc. will be used by or on behalf of third party, if yes, the system will advise the customer to complete the third party declaration form manually.

A customer of a bank or financial institution, who deals with high volume cash transactions, needs to be reported to FINTRAC as part of the FINTRAC requirements consequent to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).

The AML form will be populated when the user does large cash transactions for a member, the transaction can only be committed after committing the AML form.

Garnishment

Whenever a customer record is created or amended, the user is to be alerted about the garnishment and it's maintained manually by the Credit Control Department.