Financial Transactions and Reports Analysis Centre of Canada publishes supervisory framework describing its risk-based approach to overseeing reporting entities

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has published an overview of its supervisory framework, setting out how it supervises businesses subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated Regulations to prevent, assess, and respond to non-compliance. The framework is positioned as a practical, dynamic guide for FINTRAC’s supervision work and is not intended to describe an organisational structure. FINTRAC describes three core components: guiding principles, a risk framework and supervisory strategic plan, and three pillars of supervision. The guiding principles are risk-based supervision, early intervention, transparency, and a forward-looking approach. The risk framework and supervisory strategic plan set supervision priorities, risk appetite, budget and service standards, and link compliance and money laundering and terrorist financing risks to a risk model, risk rating and supervisory planning for entities under Parts 1 and 1.1 of the Act. The supervision pillars are engaging (including guidance, outreach, industry reviews, risk outlooks and the money services business registry), monitoring (including examinations, information demands, scorecards, supervisory letters and action plans), and enforcing (including administrative monetary penalties, compliance agreements, notices of violation and money services business revocations), with enforcement responses informed by factors such as compliance history, intent or negligence, control strength, recurrence risk, co-operation and timeliness of remediation.