On April 5th, 2022, amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its regulations were registered and implemented adding new categories of money services business (MSB) activities that were previously not considered to be covered. The definition of electronic fund transfer (EFT) was also revised during the course of these amendments.
On April 27th, 2022, the Financial Transactions and Reporting Analysis Centre of Canada (FINTRAC) also retracted its policy position concerning these same activities.
In their policy interpretation #7670, FINTRAC previously took the position that persons or entities that were engaged in remitting or transmitting funds by any means solely for the purpose of utility payments, payroll or commission services, mortgage or rent payments or certain tuition payments were not considered to be MSBs because the transfer of funds was corollary to the actual service being provided.
In the same policy interpretation, FINTRAC also previously took the position that those who were engaged in providing settlement directly to merchants on behalf of the merchant’s customers, for the purchase of goods and services were also not considered MSBs. Again, the reason was that the transfer was corollary to the service being provided.
The amendments to the PCMLTFA and its regulations added crowdfunding and payment services as activities now captured as MSB activities. Additionally, the definition of EFT was changed to remove the exemption of “carrying out transactions by means of a credit/debit card for the payment of goods and services”. This means that persons or entities that provide these services, which are now all considered “payment services”, must now comply with the PCMLTFA and its regulations.
In a 4-week series of articles, Marcelle Dadoun from the AML Shop will explore these changes in detail and provide some insight as to what this really means to persons or entities that provide payment services.
This week’s article addresses the question of what types of services qualifies as payment services under the PCMLTFA.