Canada has introduced a new law that directly impacts Money Services Businesses (MSBs) operating within its borders. The Payments and Financial Activities Reform Act (RPAA), enacted by the Canadian government, now requires all money service providers to register with the Bank of Canada. This new regulation aims to strengthen transparency and security in the financial sector.
1. What is the new RPAA law in Canada for MSBs?
The RPAA Act represents a major reform of the Canadian regulatory framework governing MSBs. It mandates that any business offering financial services, including fund transfers, currency exchange, and virtual currency services, must register with the Bank of Canada.
This requirement is part of a broader effort to enhance oversight of financial flows to combat money laundering and terrorist financing.
Compliance deadline: MSBs must comply with this law by the end of 2024. The registration process requires detailed information about the company’s activities, its managers, and the anti-money laundering measures in place.
2. What changes for MSBs in Canada
With the introduction of this new law, MSBs in Canada will have to adapt to several changes. Here are the main consequences of the RPAA Act:
- Mandatory registration with the Bank of Canada: Previously, registration with FINTRAC was the main requirement, but the new law introduced dual supervision.
- Increased oversight: The Bank of Canada will impose regular reporting and stricter audits to ensure that MSBs meet anti-money laundering and counter-terrorism financing standards.
- Stronger internal controls: MSBs must implement enhanced internal controls, including compliance systems to monitor suspicious transactions.
3. Risks of non-compliance with the new RPAA law
Failing to comply with the new RPAA law can lead to severe consequences for MSBs. Here are the main risks of non-compliance:
- Financial penalties: Unregistered businesses can face significant fines, which vary based on the severity of the violations.
- License suspension: MSBs risk losing their operating license, preventing them from conducting financial activities in Canada.
- Legal action: In cases of serious non-compliance, MSB executives may face legal prosecution, with potential criminal penalties.
4. Mundo Offshore can help you comply with the RPAA law
Complying with this new regulation may seem complex for MSBs. That’s why Mundo Offshore offers full assistance to help your company meet all the requirements to comply with the RPAA law.
Our team of experts will assist you in:
- Completing the registration with the Bank of Canada.
- Implementing internal compliance processes.
- Meeting the new regulatory requirements while keeping your operations running smoothly.
Conclusion: The new RPAA law in Canada marks a turning point for MSBs operating within Canadian borders. Registration with the Bank of Canada is now mandatory, and failing to comply can lead to severe penalties. Contact Mundo Offshore to ensure your business complies with the new law and thrives within a secure regulatory framework.
