Ontario Court Rules on The Justice for Victims of Terrorism Act
On June 9, 2016, the Ontario Superior Court of Justice released its decision in Tracy v The Iranian Ministry of Information and Security (“Tracy”), in which it dismissed motions brought by the Iranian Ministry of Information and Security (“MOIS”) to stay previously issued orders from the court to seize Ontario-based assets. The property to be seized belonged to the Islamic Republic of Iran, MOIS, and the Islamic Revolutionary Guard Corps (“IRGC”), collectively identified by the court and here as “Iran” or “Iranian State Actors”. The orders enforce a U.S. foreign judgment that ordered the seizure of $7 million worth of property belonging to Iran as damages to be paid to victims of terrorist attacks supported by Iran. The enforcement of orders against these types of assets and actors, which to date has failed in the U.S., is made possible by new Canadian legislation, namely the Justice for Victims of Terrorism Act (“JVTA”), that lifts the protection of diplomatic immunity for certain state actors involved in terrorism-related offences under the Criminal Code. For the balance of this Alert, please see Anti-terrorism and Charity Law Alert No. 45.
New Regulations Expand Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime
On June 17, 2016 the Governor General in Council issued an order creating the Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2016 (“the PCTFA Regulations”), which was later amended by the Regulations Amending the Regulation Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 2016. The second set of regulations, among other things, corrected an issue with the dates for the PCTFA Regulations to come into force. Different amendments are set to come into force on different dates, ranging from June 30, 2016 to July 17, 2017.
The Financial Transactions and Reports Analysis Centre of Canada (“FINTRAC”) is Canada’s financial intelligence unit which collects and disseminates information it receives from mandatory reporting entities and not only analyzes it, but shares it with domestic and law enforcement and intelligence agencies. FINTRAC has amended its guidelines to mirror and reflect the new PCTFA Regulations through bolstering identification requirements and other amendments.
In addition to the new FINTRAC guidelines and PCTFA Regulations, amendments have been made to the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations (“AMP Regulations”). The AMP Regulations are purportedly designed to improve compliance, monitoring, and enforcement efforts, for example expanding the authority of FINTRAC to impose administrative monetary penalties in addition to increasing the amount of information being shared. Both the AMP Regulations, FINTRAC guidelines and PCTFA Regulations have applicability to charities and not-for-profits, among others, for many reasons, including the increasing administrative penalties for non-compliance and strengthened regulations regarding the conduct of casino fundraisers by registered charities (as under the AMP Regulations).
In light of the burgeoning and robust regulatory regime and legislative initiatives to address terrorist financing and money laundering, charities and not-for-profits need to understand the extent of information which is being recorded, collected and shared regarding financial transactions and the implications that could have when that information is shared with law enforcement and regulatory agencies like Canada Revenue Agency.