Sunday, October 28, 2012


I was pleased to learn recently that the proposed Canadian Regulations, under the Terrorist Financing and Proceeds of Crime Acts, will reportedly close a major loophole regarding Beneficial Ownership. The current requirement, which appears to only require that Regulated Entities take 'reasonable measures' to ascertain Beneficial Ownership of an entity, is an open invitation to unsavoury customers who you would not accept, should you know about their interest. All they have to do is frustrate your enquiries, so that you never learn the truth.

The proposed changes obligate entities making such enquiries to obtain answers, and furthermore, to keep a record of their queries. In the event that they simply cannot learn who are the Beneficial Owners, or to verify the information they secure, they will be required to learn who is the most senior officer, and to also treat the entity as high risk. 

Whilst I would certainly prefer that Canadian banks, and other regulated entities, decline to accept corporate customers whose owners they cannot positively identify, with a high degree of certainty, I know that customer relationship managers would find a way to torpedo that policy. I can live with the proposed regulations; just  pass them into law forthwith, with no one-year period for an effective date, please.

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