On July 10, 2019, the Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the "Amending Regulations") were formally released in the Canada Gazette. The formal release follows the June 2018 release of draft Amending Regulations. The Amending Regulations affect several regulated entities, including casinos. As such, casino operators will now face a variety of increased reporting and monitoring requirements. The following is a non-exhaustive list of the increased reporting and monitoring requirements faced by casino operators in the Amending Regulations:
- The Amending Regulations require casino operators to report specific types of transactions of $10,000 or more to the Financial Transactions and Analysis Centre of Canada, Likewise, casino operators are also required to report disbursements of $10,000 or more in a single transaction, such as, the redemption of chips, tokens or plaques, or a front cash withdrawal.
- Casino operators are required to keep a record of large cash transactions in respect of every amount of $10,000 or more in cash that the casino receives from a person or entity in a single transaction.
- Casino operators are required to keep a detailed record of every account that the casino opens. This detailed account is required to include the account holder's signature card, contact and vital information, as well as other details. In addition, casinos are required to keep a detailed record of every transaction that is conducted within the casino, as per the requirements in sections 74(1)-(2) of the Amending Regulations. It should be noted that the Amending Regulations reduce the extent of the reporting requirement as first laid out in the draft Amending Regulations. The Amending Regulations omit the requirement to include "every known detail" in respect of a transaction.
- Casino operators are required to verify the identity of individuals associated with the account. These include for whom the casino opens the account, who is authorized to give instructions in respect of the account, and who conducts a transaction in respect of which the casino is required to keep a record.
- The Amending Regulations indicate how a disbursement, as noted in (1) above, of $10,000 in a single transaction is to be defined in respect of electronic transfers of funds. For example, if a casino operator makes two or more disbursements that total $10,000 or more within a period of twenty-four consecutive hours, those disbursements will be deemed to be a single disbursement of $10,000 or more, if the casino operator knows that the disbursements were requested or received, by or on behalf of, the same person or entity.
- Casino operators are required to take reasonable steps to determine whether an individual requesting a disbursement is acting on behalf of a third party. To this end, the casino operator must take reasonable measures to obtain the individual's contact information, and determine the relationship between the third party and the individual making the request.
The effect of the Amending Regulations is to increase reporting and monitoring requirements on regulated entities. As such, regulated entities, including casino operators, will be responsible for asking their clients for additional information, and for adjusting their monitoring systems in order to comply with the new rules.
Michael Lipton, Kevin Weber and Chantal Cipriano are lawyers in Dickinson Wright's Toronto office.
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