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My company’s FINTRAC exam is less than a week away and I’m worried.  What should I do?

What to expect from FINTRAC

There are two main types of examinations:  a desk exam, and an on-site exam.

In a desk exam, the letter FINTRAC sends you will ask that you send your compliance documents, and other documents relating to client identification and transactions you conducted to their offices.  Typically, they will be assessing a 1 to 3 month period, and ask for the documents from that time.  The deadline to respond is about one month later.  A few weeks after that, your FINTRAC examiner will call to ask questions and to relay the results of their examination.  Those results will be confirmed in a letter sent a few weeks later.  If there are deficiencies, FINTRAC will typically ask you take no more than 30 days to make and send them a plan to address the deficiencies.  If FINTRAC decides to issue a penalty as a consequence of those deficiencies, you will likely hear about it between 4 to 6 months later.  You have 30 days from a notice of penalty to file an appeal with the Director of FINTRAC, who can take up to 90 days to respond to that appeal.  If you’re unsuccessful with that appeal, you’ll have 30 days from that point to file an appeal to Federal Court.

In an on-site exam, the letter FINTRAC sends you will ask that you send your compliance documents to their offices, and reference other documents relating to client identification and transactions you conducted, which they will examine on-site.  Typically, they will be assessing a 1 to 3 month period, and ask for the documents from that time.  The deadline to respond is about three weeks later, and the on-site visit is typically planned for a few weeks after that.  The on-site exam will begin and end with comments about the results of the examination.  Those results will be confirmed in a letter sent a few weeks later.  If there are deficiencies, FINTRAC will typically ask you that take no more than 30 days to make and send them a plan to address the deficiencies.  If FINTRAC decides to issue a penalty as a consequence of those deficiencies, you will likely hear about it between 4 to 6 months later.  You have 30 days from a notice of penalty to either pay it, or file an appeal with the Director of FINTRAC, who can take up to 90 days to respond to that appeal.  If you’re unsuccessful with that appeal, you’ll have 30 days from that point to file an appeal to Federal Court.

There are four important steps to take to prepare for your FINTRAC examination:

1. Assemble all the documents FINTRAC has requested, and keep copies for later reference.

2. Send the documents FINTRAC requested, on time, and have the other documents ready for examination if you’re having an on-site visit.

3. Assess your risk of a penalty by reviewing the documentation you’re sending to FINTRAC – either on your own or with the help of compliance professionals. High risk situations often require a different strategy, and the early involvement of a lawyer.

4. Make sure that your designated compliance officer (Chief Anti-Money Laundering Officer) is going to be available for the examination and debrief sessions.

Who needs to be there for the FINTRAC Examination?

Your Chief Anti-Money Laundering Officer and the substitute Compliance officer should be available for the sessions.  It is also often useful to involve the professional who conducted your compliance review, your compliance expert and counsel where the risk of penalty is high.

What not to do during the FINTRAC Examination

1.  Don’t argue with FINTRAC in the course of the examination.  Do explain all the facts relevant to your situation.  The action plan is your chance to fully explain and document the situation at your reporting entity.

2.  Don’t say that your business is low risk as a defence to compliance deficiencies.  Compliance is not optional.

3.  Don’t remind the examiner that you pay his or her salary – it works as well as it does with police officers.

How we can help you with your FINTRAC Examination

We can help you understand your compliance risks, and often be well on the way to fixing them before FINTRAC arrives. Also, we can attend the sessions to support and document your interactions, and prepare for later stages of the process. Our insider experience with these issues is an indispensible ‘tool in your arsenal against FINTRAC and can make the difference between a reasonable remediation plan and disaster.

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