ATF/AML Update
August 2022 Charity & NFP Law Update
Published on August 25, 2022

By Terrance S. Carter, Nancy E. Claridge and Sean S. Carter
   
 

FINTRAC Reminds Crowdfunding Platforms to Register as MSBs or FMSBs

In the May 2022 Charity & NFP Law Update, charities and not-for-profits that engage in crowdfunding were advised to take notice of new regulations, which meant that personal identifying information regarding donations via emerging funding and payment services would be provided to the Financial Transaction and Reports Analysis Centre of Canada (“FINTRAC”), just as if the donation had occurred through the traditional banking system. In a follow up notice on July 21, 2022 regarding these regulations, FINTRAC reminded crowdfunding platforms and certain payment service providers that they have registration and reporting obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (“Proceeds of Crime Act”) and related regulations, by virtue of their status as money services businesses (“MSBs”) or foreign money services businesses (“FMSBs”).

Leading NGOs & CBA Advocate for Changes to Laws Preventing Humanitarian Aid to Afghanistan

Canada’s largest humanitarian aid agencies are calling on Canadians to advocate for governments to change AML/ATF laws so that humanitarian aid may legally be sent to Afghanistan, a country “in the midst of a deepening humanitarian crisis”. Currently, Canada’s AML/ATF laws make it difficult, if not impossible, for Canadian charities to send humanitarian aid to Afghanistan without risk of breaching criminal and anti-terrorism laws, as described in some detail in a July 22, 2022 letter from lawyers in the Canadian Bar Association’s Charities & Not-for-Profit Law Section (“CBA letter”). The CBA letter, in particular, also endorses the recommendations from the House of Commons Special Committee on Afghanistan’s report (which was reported on in the June 2022 Charity & NFP Law Update).

Readers are encouraged to review the links above and to email their Member of Parliament about this issue through the aidforafghanistan.ca website created by these charities.

CRA Resources on Anti-Terrorist Financing

Charities are encouraged to reference the Canada Revenue Agency’s (“CRA”) resources and guidances on anti-terrorism financing and anti-money laundering, particularly when operating outside of Canada in conflict zones, such as Afghanistan. In this regard, Canadian charities operating internationally should reference the CRA’s Checklist for charities on avoiding terrorist abuse last updated on May28, 2021. This checklist now references a separate resource page, Charities in the International Context, which addresses terrorist financing concerns, gives an overview of the Charities Registration (Security Information) Act and explains how Canada’ participation in the Financial Action Task Force is relevant for non-profit organizations, including charities. In addition, the page includes links to international anti-terrorist financing resources from Australia, England and Wales, New Zealand, and the United States.

   
 

Read the August 2022 Charity & NFP Law Update