INTRODUCTION AND BRIEF DESCRIPTION
Entities must report whether they possess or control any property referred to in subsection 83.11(1) and provide additional information if they do.
SECTION WORDING
83.11(2) Subject to the regulations, every entity referred to in paragraphs (1)(a) to (g) must report, within the period specified by regulation or, if no period is specified, monthly, to the principal agency or body that supervises or regulates it under federal or provincial law either (a) that it is not in possession or control of any property referred to in subsection (1), or (b) that it is in possession or control of such property, in which case it must also report the number of persons, contracts or accounts involved and the total value of the property.
EXPLANATION
Section 83.11(2) of the Criminal Code of Canada deals with the reporting obligations of entities that are referred to in paragraphs (1)(a) to (g) of the same section. These entities include financial institutions, international transportation service providers, dealers in precious metals and stones, and casinos, among others. The purpose of this reporting requirement is to help detect and prevent the financing of terrorist activities. The reporting obligation under this section requires the entity to report to the principal agency or body that supervises or regulates it under federal or provincial law. The period of reporting may be specified by regulation or, if no period is specified, then it must be done monthly. The entity may report one of two things: (a) that it does not have any property referred to in subsection (1), or (b) that it has such property in its possession or control. If the entity reports that it has the property, then it must also disclose the number of persons, contracts or accounts involved and the total value of the property. The property referred to in subsection (1) includes funds, securities, negotiable instruments, and other financial instruments or property of every kind that may be used to finance terrorist activities. By requiring reporting on the possession or control of such property, the section aims to create an audit trail that can help authorities track the sources of funding for terrorist activities. It also discourages entities from knowingly facilitating such financing by imposing penalties for non-compliance or providing information that is false or misleading. In summary, Section 83.11(2) of the Criminal Code of Canada imposes a reporting obligation on certain entities to report the possession or control of property that may be used to finance terrorist activities. The reporting requirement aims to create an audit trail to trace sources of funding for terrorist activities, and it discourages entities from knowingly facilitating such financing.
COMMENTARY
Section 83.11(2) of the Criminal Code of Canada is an important provision in the fight against terrorism financing in Canada. The provision mandates that certain entities referred to in paragraphs (1)(a) to (g) must report to the principal agency or body that supervises or regulates it under federal or provincial law on a monthly basis or within a period specified by regulation. The report should indicate whether the entity is in possession or control of any property referred to in subsection (1) or not. If the entity has such property, it must also report the number of persons, contracts or accounts involved and the total value of the property. This provision targets entities that are vulnerable to exploitation by terrorists or terrorist groups. These entities include financial institutions, money services businesses, casinos, dealers in precious metals and stones, and any other business or profession that the Governor in Council may prescribe. The provision aims to give law enforcement agencies and regulatory bodies a comprehensive view of how these entities are handling the funds that pass through them, particularly if these funds are related to or could be used for terrorist financing. The provision also ensures that these entities have robust anti-money laundering and counter-terrorism financing (AML/CTF) programs in place. These programs should include risk assessments, customer due diligence measures, transaction monitoring, and reporting of suspicious activities. The obligation to report to the principal agency or body that supervises or regulates the entity ensures that these programs are being implemented effectively and that any potential vulnerabilities are identified and addressed promptly. The reporting requirements in section 83.11(2) are further bolstered by the accompanying regulations. The regulations specify the entities that are subject to the provision, the information that must be reported, and the time frame for reporting. The regulations also provide guidance on how entities are to comply with the reporting requirements. For example, the regulations may specify the format in which the report should be submitted, the contact person for the report, and any additional information required. Failure to comply with the reporting requirements can result in serious consequences for the entity in question. The Criminal Code provides penalties of up to $2 million in fines and/or up to five years' imprisonment for corporations, and up to $500,000 in fines and/or up to five years' imprisonment for individuals who fail to comply with the reporting requirements. In conclusion, section 83.11(2) of the Criminal Code of Canada is an essential provision in the fight against terrorism financing. It ensures that entities that are vulnerable to exploitation by terrorists or terrorist groups are monitored effectively and that they have robust AML/CTF programs in place. The accompanying regulations provide further guidance on how these entities are to comply with the reporting requirements. Compliance with these reporting requirements is crucial in preventing the financing of terrorism and maintaining the safety and security of Canadians.
STRATEGY
Section 83.11(2) of the Criminal Code of Canada places an obligation on certain entities to report any possession or control of properties mentioned in subsection (1) to the relevant federal or provincial agency. To comply with this section, organizations must establish a robust framework for handling such reporting obligations. Such a system should be developed with a focus on minimizing the risk of non-compliance with the reporting obligations. One strategic consideration is the identification of the entity's legal responsibilities and obligations related to reporting. Each entity must understand which regulatory agencies and bodies supervise or govern them under federal or provincial law. Once identified, the entity should establish communication channels and familiarize themselves with relevant reporting structures and timelines. Having a good understanding of the reporting obligations and regulations helps the entity to remain compliant and avoid penalties. Another strategic consideration involves the detection and identification of properties listed in subsection (1) of the section. It is essential to develop a reliable and accurate system that identifies these properties to ensure that they are reported. The responsible entity should understand that reporting is necessary both when the entity is in possession and control of the property and when it no longer possesses or controls the property. Accurate records should also be kept on the number of individuals, accounts, and contracts involved so that reports can be made in a timely and accurate manner. The entity should also consider implementing automated technologies that enable them to identify and track properties that meet the criteria stipulated in subsection (1). With the help of modern technologies designed for compliance reporting, the entity can streamline the reporting process, thus minimizing the risk of errors and omissions. Entities authorized to report under this section should continuously train and educate their employees to ensure they comply with the reporting requirements properly. Regular compliance training helps ensure that all involved in the reporting process understand the relevant regulations and their obligations. Another consideration when dealing with section 83.11(2) is the establishment of a system of internal controls, policies, and procedures. These policies should help keep the entity in compliance with its reporting obligations and help identify and correct any errors, deficiencies, and omissions. Organizations should consider hiring experts to assist them with compliance matters. By working with legal and accounting professionals, they can get assistance in interpreting and understanding relevant rules, regulations, and laws. In conclusion, entities authorized to report under section 83.11(2) of the Criminal Code of Canada should take strategic steps to ensure compliance. These steps include identifying regulatory agencies and bodies, using automated technologies, training employees, establishing effective internal controls, and leveraging third-party support to achieve compliance. These strategies can help entities manage their compliance obligations effectively.
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