- Type of Publication: Notice
- Date: March 5, 2014
This notice is directed to the attention of all banks, authorized foreign banks, trust companies, loan companies, credit union centrals, cooperative credit associations, life insurance companies, property and casualty insurance companies, and fraternal benefit societies (Federally Regulated Financial Institutions (FRFIs)).
On March 5, 2014 the Governor in Council brought into force the Freezing Assets of Corrupt Foreign Officials (Ukraine) Regulations (“FACFOU”). The Regulations will be published in Part II of the Canada Gazette in due course, but entered into force on March 5, 2014, the date on which they were registered.
The Regulations establish a list of persons whose assets are subject to freezing under the FACFOU. The following is a link to information provided by the Department of Foreign Affairs, Trade and Development (DFATD):
Searching, Freezing, Monitoring, Disclosure and Due Diligence Obligations
The FACFOU impose searching, freezing, monitoring, disclosure and due diligence obligations on all Canadians, including Canadian financial institutions. Implementation of the FACFOU requires financial institutions to search their customer records in order to identify financial assets to which the asset freeze applies, and identify prohibited financial transactions, to ensure that transactions and/or financial services provided to designated Politically Exposed Foreign Persons (PEFPs) (as defined) are blocked and reported as appropriate, including implementation measures at any branches of financial institutions outside Canada.
The prohibition on financial services applies to property services such as asset management, lending (including mortgage lending), the provision of property insurance and other insurance policies and services, and other financial services.
OSFI has been advised that lists of designated PEFPs are the whole lists for the time being, and that there is therefore no obligation on the part of FRFIs under FACFOU to determine if there are other person(s) who, for personal or business reasons, are or were closely associated with designated PEFPs. However, FRFIs that are subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) are reminded that the PEFP obligations under the PCMLTFA and its regulations are not displaced or otherwise affected by the FACFOU.
Searching and Monitoring
OSFI expects that FRFIs will implement the necessary measures to search for the names of designated PEFPs under the FACFOU. As with other searching and reporting requirements, the obligation to search for designated PEFPs is a continuing one. For example, at a minimum, it is our expectation that FRFIs be able to search their records for designated PEFPs at least on a weekly basis, and more frequently if need be.
Under the PCMLTFA certain FRFIs are required to obtain and record prescribed information on the persons who own or control, directly or indirectly, 25% or more of clients that are corporations and other entities. It is OSFI’s expectation that FRFIs will search these records to determine if they are dealing with a corporation or an entity that may be owned or controlled, directly or indirectly, by a designated PEPF under the FACFOU.
Disclosure to Law Enforcement
If Canadian financial institutions have property in their possession or control that they have reason to believe is owned or controlled, directly or indirectly, by designated PEFPs, or if they are providing any prescribed financial or other services to designated PEFPs, they are required to report such information to the Royal Canadian Mounted Police (RCMP) immediately. Information may be provided as follows:
Federal Policing Intake Unit
National Operations Centre (NOC)
No Reporting to Financial Regulators
Please note that the FACFOU do not require financial institutions to report to their financial regulators each month on the results of the continuous searching and reporting obligations.
If any clarification is needed on the obligations imposed by the FACFOU, including applying for certificates or permits, please contact:
Department of Foreign Affairs, Trade and Development (DFTD)
Criminal, Security and Diplomatic Law Division
125 Sussex Drive,
This Notice is also being sent to the following for their information:
- Provincial Regulators and Supervisors;
- Canadian Association of Direct Response Insurers;
- Canadian Bankers Association;
- Canadian Fraternal Association;
- Canadian Life and Health Insurance Association;
- Canadian Securities Administrators;
- Credit Union Central of Canada;
- Insurance Bureau of Canada;
- Investment Industry Regulatory Organization of Canada;
- Trust Companies Association of Canada.