section 83.11(1)

INTRODUCTION AND BRIEF DESCRIPTION

This section requires certain entities to continuously monitor their possession or control of property owned or controlled by a listed entity for the purpose of preventing terrorism financing.

SECTION WORDING

83.11 (1) The following entities must determine on a continuing basis whether they are in possession or control of property owned or controlled by or on behalf of a listed entity: (a) authorized foreign banks within the meaning of section 2 of the Bank Act in respect of their business in Canada, or banks to which that Act applies; (b) cooperative credit societies, savings and credit unions and caisses populaires regulated by a provincial Act and associations regulated by the Cooperative Credit Associations Act; (c) foreign companies within the meaning of subsection 2(1) of the Insurance Companies Act in respect of their insurance business in Canada; (c.1) companies, provincial companies and societies within the meaning of subsection 2(1) of the Insurance Companies Act; (c.2) fraternal benefit societies regulated by a provincial Act in respect of their insurance activities, and insurance companies and other entities engaged in the business of insuring risks that are regulated by a provincial Act; (d) companies to which the Trust and Loan Companies Act applies; (e) trust companies regulated by a provincial Act; (f) loan companies regulated by a provincial Act; and (g) entities authorized under provincial legislation to engage in the business of dealing in securities, or to provide portfolio management or investment counselling services.

EXPLANATION

Section 83.11(1) of the Criminal Code of Canada outlines the responsibilities of various entities in Canada when it comes to tracking and reporting any property or assets owned or held by a listed entity, which refers to an individual or organization that has been designated as a terrorist entity under Canadian law. The listed entity could be a person, group, or organization that has been found to be involved in terrorist activities, financing, or supporting terrorism in any way. The section lists a diverse range of entities that are required to monitor whether they possess or control any property of the listed entity, including authorized foreign banks, cooperative credit societies, insurance companies, trust and loan companies, and entities that deal in securities or provide investment services. The entities must perform this monitoring on a continual basis, ensuring that they detect any new property or assets that come into their possession or control, and report them promptly to the authorities. This provision plays a crucial role in preventing the financing of terrorism by cutting off the financial support channels of terrorist entities. By requiring various types of financial institutions and investment-related entities to monitor their dealings with listed entities, the government aims to ensure that they cannot use legitimate financial channels to receive funds or transfer money for illicit purposes. The section also highlights the importance of cooperation between different sectors of the financial industry and government agencies to enhance national security efforts and combat terrorism-related activities in Canada.

COMMENTARY

Section 83.11(1) of the Criminal Code of Canada outlines the entities that must determine on a continuing basis whether they are in possession or control of property owned or controlled by or on behalf of a listed entity. This provision is crucial in the fight against terrorism financing and helps to prevent listed entities from being able to access funds or assets that could be used to carry out terrorist activities. The listed entities referred to in this provision are those that have been identified as entities associated with terrorism or terrorist activities. This includes individuals, organizations, and groups that have either been listed by the United Nations Security Council or by the Canadian government under its own domestic legislation. The entities that are required to monitor their possession or control of property owned or controlled by a listed entity include banks, credit unions, insurance companies, trust companies, loan companies, and securities dealers. These entities play a critical role in the financial system and are frequently used by terrorists to move funds, launder money, and disguise the source of their assets. By requiring these entities to be vigilant and proactive in monitoring their possession or control of property owned or controlled by a listed entity, this provision helps to prevent terrorists from being able to access the funds they need to carry out their activities. It also sends a strong message to the financial sector that they have a responsibility to play an active role in preventing terrorism financing. The implementation of this provision requires a significant investment of resources by the entities involved. They must establish robust monitoring systems and processes that can effectively detect and prevent transactions involving listed entities. This can be a complex and challenging task, particularly for smaller financial institutions with limited resources. Overall, Section 83.11(1) of the Criminal Code of Canada is an important tool in the fight against terrorism financing. It helps to ensure that listed entities are unable to access the funds they need to carry out their activities by placing a legal obligation on financial institutions to monitor their possession or control of property owned or controlled by a listed entity. While the implementation of this provision can be challenging, it is essential in order to protect the stability and integrity of the financial system and to prevent the harm caused by terrorist activities.

STRATEGY

Section 83.11(1) of the Criminal Code of Canada clearly lays out the responsibilities of various entities when it comes to determining whether they are in possession or control of property owned or controlled by a listed entity. The listed entities refer to those organizations or individuals that have been designated by the Government of Canada as terrorists or supporters of terrorism. Given the seriousness of the issue at hand, there are several strategic considerations that organizations must keep in mind when dealing with this section of the Criminal Code of Canada. Firstly, compliance with the law should be the foremost consideration for any organization. Failing to comply with Section 83.11(1) could lead to financial penalties, legal action, and damage to the reputation of the organization. Therefore, companies must ensure that they have adequate procedures and systems in place to comply with the requirements of the law. Secondly, organizations must take appropriate measures to mitigate the risk associated with handling property owned or controlled by a listed entity. This may include implementing enhanced due diligence processes to verify the origins of funds and conducting ongoing risk assessments of clients and transactions. It may also involve training employees on the risks of money laundering and terrorist financing and how to identify suspicious activity. Thirdly, organizations must be aware of the potential for reputational risk associated with dealing with listed entities. Even if an organization complies with the law and takes appropriate measures to mitigate the risk, the mere association with a listed entity could damage its reputation. Therefore, companies should be transparent about their compliance activities and communicate with stakeholders about the steps they are taking to manage the risks. Lastly, organizations must consider how Section 83.11(1) impacts their overall business strategy. For example, some companies may choose to avoid dealing with clients or investments in high-risk countries, while others may increase their investment in compliance measures and enhance their due diligence processes. The decision will depend on factors such as the size of the organization, the industry it operates in, and the level of risk it is willing to accept. There are several strategies that organizations can employ to manage the risks associated with Section 83.11(1). One approach is to implement robust compliance programs that include policies, procedures, and training for employees. This may involve hiring compliance professionals and investing in technology to monitor transactions and detect suspicious activity. Another strategy is to seek external advice from legal and compliance consultants who specialize in anti-money laundering and terrorist financing. These professionals can provide advice on best practices, identify gaps in the organization's compliance program, and help to design and implement effective risk mitigation measures. In conclusion, Section 83.11(1) of the Criminal Code of Canada imposes important obligations on organizations to ensure that they are not inadvertently facilitating terrorism. Compliance with this section of the law is critical, especially given the serious consequences of non-compliance. To manage the risks associated with Section 83.11(1), organizations must implement robust compliance programs, mitigate risk through enhanced due diligence, be transparent about their activities, and seek external advice as needed.