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    OSFI to Focus on Prudential Implications of AML/ATF Compliance

    October 16, 2020

    OSFI outlined its revised approach to supervising the anti-money laundering/anti-terrorist financing (AML/ATF) programs and initiated a review of Guideline E-13 (Regulatory Compliance Management) to incorporate expectations for managing compliance in relation to AML/ATF. OSFI is seeking views on the nature and timing of any potential guidance amendments, including whether amendments to Guideline E-13 are needed, and the extent any such changes in relation to AML/ATF supervision or clarifying its expectations for compliance risk management more broadly. OSFI is also seeking views on whether Guideline B-8 (Deterring and Detecting Money Laundering and Terrorist Financing) should be rescinded in full, or if elements of Guideline B-8 should be incorporated in a revised Guideline E-13. OSFI is requesting comments until November 30, 2020.

    OSFI provided an update on its revised approach to supervising anti-AML/ATF programs of federally regulated financial institutions. Over the past year, OSFI and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) have entered a new phase in their collaboration on AML/ATF supervision. Going forward, FINTRAC will be the primary agency conducting AML/ATF assessments of federally regulated financial institutions to ensure compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated regulations. OSFI will focus on the prudential implications of AML/ATF compliance, as part of its ongoing assessment of regulatory compliance management frameworks. OSFI and FINTRAC will coordinate on the state of the AML/ATF regime relative to their respective mandates and as it relates to the federally regulated financial institutions. This is consistent with the BCBS guidance on cooperation and information exchange among prudential and anti-money laundering and countering financing of terrorism (AML/CFT) supervisors for banks. The transition to this new approach began in 2019 and is expected to occur over a minimum two-year period. In March 2020, as a result of the COVID-19 pandemic, OSFI put a temporary pause on both policy development work and the transition of AML supervisory activities to FINTRAC, but OSFI has now restarted this effort.

     

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    Comment Due Date: November 30, 2020

    Keywords: Americas, Canada, Banking, AML/CFT, FINTRAC, BCBS, OSFI

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