By Rachel Puma
As of June 1, 2021, amendments to the Regulations made under the Proceeds of Crime (Money Laundering and Terrorist Financing Act (PCMLTFA) came into force, which have once again changed the reporting obligations of Reporting Entities (REs). The amendments now require REs to submit a large virtual currency transaction report (LVCTR) when they receive an amount of virtual currency equivalent to $10,000 or more in a single transaction (or a series of transactions under the 24-hour rule). In addition, the amendments require REs to submit an electronic funds transfer (EFT) report when the RE is a “final recipient” of an international EFT of $10,000 or more in a single transaction, or the RE “initiates,” at the request of a person or entity, an international EFT of $10,000 or more in a single transaction (or a series of transactions under the 24-hour rule).
Given the short timeline from the amendments being introduced and coming into force, FINTRAC permitted some relief during a transitional period from June 1, 2021 until Nov. 30, 2021, in which REs have been required to keep records of the reportable transactions since June 1, 2021, but are only required to submit such unreported transactions as soon as possible starting on Dec. 1, 2021 (though the final sunset date for reporting these unreported transactions is March 31, 2022). However, even though a RE may not report these transactions between June 1, 2021 and Nov. 30, 2021, FINTRAC expects that the RE will submit a voluntary self-declaration of non-compliance (VSDONC) if it is over-reporting or under-reporting during the transitional period.
In addition to submitting all unreported transactions from the transitional period, FINTRAC expects that REs will have fully implemented their LVCTR and EFT reporting systems to comply with the new requirements by Dec. 1, 2021. Consequently, from Dec. 1, 2021 and going forward, REs must promptly submit EFT reports and must report LVCTRs within five working days after the day on which they receive the large virtual currency amount.
With the exception of submitting a VSDONC for the reasons discussed above, REs have not had to submit a VSDONC to FINTRAC for non-compliance with any other requirements of the amended Regulations. However, that too comes to an end on Dec. 1, 2021, when REs will be expected to submit a VSDONC for any non-compliance.
All in all, time is running out for those REs who have taken advantage of the transitional period since June 1, 2021 when the PCMLTFA amendments came into force. Dec. 1, 2021 marks the official start of the amended reporting regime, and REs are expected to be ready to comply.
Rachel Puma is an Associate at Robins Appleby. robinsappleby.com