Proceeds of Crime (Money Laundering) and Terrorist Financing Reporting of Goods Regulations

Proceeds of Crime (Money Laundering) and Terrorist Financing Reporting of Goods Regulations Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance and the Minister of Public Safety and Emergency Preparedness, makes the annexed Proceeds of Crime (Money Laundering) and Terrorist Financing Reporting of Goods Regulations under subsections 39.38(1)a, 39.39(1)a and 73(1)b of the Proceeds of Crime (Money Laundering) and Terrorist Financing Actc. S.C. 2024, c. 15, s. 285 S.C. 2024, c. 15, s. 296 S.C. 2000, c. 17; S.C. 2001, c. 41, s. 48 Definition of Act In these Regulations, Act means the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Time and manner A declaration under subsection 39.02(1) of the Act must be made at the same time and in the same manner as the reporting of imported or exported goods under sections 12 or 95 of the Customs Act. Person in charge of conveyance For the purposes of paragraph 39.02(3)(a) of the Act, goods imported on board a non-commercial passenger conveyance, as defined in subsection 1(2) of the Cross-border Currency and Monetary Instruments Reporting Regulations, may be declared by the person in charge of the conveyance if the reporting of the goods under the Customs Act is done by radio or telephone; or the goods are in the actual possession, or form part of the baggage, of a person who presents themselves by telephone in accordance with the Presentation of Persons (2003) Regulations. Record keeping — imported goods Any person or entity that imports goods or causes or arranges for goods to be imported for a purpose referred to in subsection 39.02(6) of the Act must keep, until the sixth anniversary of the day on which the goods were imported, all records relating to the origin, marking, purchase, importation, costs and value of the goods; all records relating to payment for the goods; all records relating to the sale or other disposal of the goods in Canada; and all records and books of account that must be kept in respect of the goods under section 230 of the Income Tax Act. Record keeping — CSA importer If the person or entity is a CSA importer, as defined in section 2 of the Accounting for Imported Goods and Payment of Duties Regulations, the person or entity must also keep, until the sixth anniversary of the day on which the goods were imported, all records describing the goods or specifying their quantity; all records relating to the receipt of the goods; all records showing the credits and adjustments used to determine the amount paid for the goods; all records relating to the accounting for the goods; all records relating to any refund, drawback or re-determination of duties in respect of the goods; a list of all vendors and consignees of the goods; and all records relating to the information needed to complete the form entitled “CSA Revenue Summary” in respect of the goods and to the payment of duties on the goods. Sufferance warehouse If the person or entity has been issued a licence under paragraph 24(1)(a) of the Customs Act for the operation of a place as a sufferance warehouse, the person or entity must also keep, until the sixth anniversary of the day on which the imported goods were received into the warehouse, all records containing information relating to the receipt of the goods into the warehouse and their removal from it. Bonded warehouse If the person or entity has been issued a licence under subsection 91(1) of the Customs Tariff for the operation of a place as a bonded warehouse, the person or entity must also keep, until the sixth anniversary of the day on which the imported goods were removed from the warehouse, all records relating to the goods received into the warehouse or their removal from it, including all records containing information describing the goods at the time of receipt into the warehouse or removal from it for export; all records containing information accounting for the goods at the time of removal from the warehouse; all records containing information relating to the inventory of goods that are stored in the warehouse and the transactions that occur while the goods are stored in the warehouse; all records containing information relating to the transfer of ownership of the goods; all records containing information relating to the transfer of the goods to another bonded warehouse, to a sufferance warehouse or to a duty free shop; and all records containing information relating to the unpacking, packing, manipulation or alteration of the goods, or any combining of the goods with other goods. Manner of record keeping The records referred to in subsections (1) to (4) must be kept in the case of records and books of account referred to in paragraph (1)(d), in the manner specified in section 230 of the Income Tax Act; and in any other case, in the manner prescribed under subsection 40(3) of the Customs Act. Record keeping — exported goods Any person or entity that exports goods or that causes or arranges for such goods to be exported for a purpose referred to in subsection 39.02(6) of the Act must keep, until the sixth anniversary of the day on which the goods were exported, all records relating to the usage to which the goods are put in Canada; all records relating to the exportation of the goods; all records relating to the source of all materials, including indirect materials, used in the production of the goods; and Exportation to free trade partner If the person or entity has completed and signed a certificate in accordance with subsection 97.1(1) of the Customs Act, the person or entity must also keep, until the sixth anniversary of the day on which the certificate was signed, all records relating to an application for or receipt of any advance ruling, as defined in section 1 of the Exporters’ and Producers’ Records Regulations, by the customs administration of the applicable free trade partner; and if the person or entity is not the producer of the goods, all written representations received from the producer stating that the goods meet the rules of origin set out in or contemplated by the applicable free trade agreement. The records referred to in subsections (1) and (2) must be kept in the case of records and books of account referred to in paragraph (1)(f), in the manner specified in section 230 of the Income Tax Act; and in any other case, in the manner prescribed under subsection 97.2(1) of the Customs Act. Record keeping — producers Any person or entity that produces goods for a purpose referred to in subsection 39.02(6) of the Act and that has completed and signed a certificate in accordance with subsection 97.1(1) of the Customs Act must keep, until the sixth anniversary of the day on which the certificate was signed, all records relating to the production of the goods, including all records relating to the purchase, cost of, value of, and payment for, the goods; all records relating to the purchase, cost of, value of, and payment for, all materials, including indirect materials, used in the production of the goods; and all records relating to an application for or receipt of any advance ruling, as defined in section 1 of the Exporters’ and Producers’ Records Regulations, by the customs administration of the applicable free trade partner. The records referred to in subsection (1) must be kept in the manner prescribed under subsection 97.2(1) of the Customs Act. Record keeping — suppliers, distributors and consumers Any person or entity that supplies, distributes or consumes goods for a purpose referred to in subsection 39.02(6) of the Act and that has completed and signed a certificate in accordance with subsection 97.1(1) of the Customs Act must keep, until the sixth anniversary of the day on which the certificate was signed, all records and books of account that must be kept in respect of the goods under section 230 of the Income Tax Act. The records and books of account referred to in subsection (1) must be kept in the manner specified in section 230 of the Income Tax Act. Manner of notice For the purposes of subsection 39.03(1) of the Act, the retention notice must be given in the case of a person, by handing the notice to the person or sending it by registered mail to the person’s last known address; and in the case of an entity, by leaving the notice at the entity’s head office or place of business, with an officer or other person who appears to be in control of or managing the head office or place of business, or sending the notice by registered mail to the entity’s head office or place of business. Importation or exportation by courier or as mail For the purposes of subsection 39.03(2) of the Act, the retention notice must be given within 60 days after the day on which the goods are imported or exported, as the case may be. Retention period For the purposes of subsection 39.03(1) of the Act, the retention period is in the case of goods imported or exported by courier or as mail, 30 days after the day on which the retention notice is sent or otherwise given; and in any other case, seven days after the day on which the retention notice is sent or otherwise given. Violations Any person or entity that contravenes subsection 39.02(1), (5), (6) or (8) of the Act commits a violation and is liable to a penalty determined in accordance with section 14. Notice of violation If an officer has reasonable grounds to believe that a person or entity has committed a violation, the officer may issue a notice of violation and cause it to be served on the person or entity. Contents The notice of violation must name the person or entity believed to have committed the violation; identify the violation and the provision at issue; set out the amount of the penalty for the violation and the manner of paying the penalty; indicate that the person or entity has the right to apply for a review with respect to the violation or the amount of the penalty, and the manner for doing so; indicate that the person or entity must pay the penalty or apply for a review within 30 days after the day on which the notice is served, or any longer period that the President specifies; and indicate that, if the person or entity does not pay the penalty or apply for a review within the time and manner set out in the notice, the person or entity will be deemed to have committed the violation and will be liable to pay the penalty. Administrative corrections If the notice of violation contains any error or omission, the officer may issue a corrected notice of violation and cause it to be served on the person or entity at any time during the period referred to in paragraph (2)(e). Payment of penalty If a person or entity pays the penalty in accordance with the notice of violation, the person or entity is deemed to have committed the violation and proceedings in respect of it are ended. Review If the person or entity applies for a review in accordance with the notice of violation, the President must decide, on a balance of probabilities, whether the person or entity committed the violation and, if so, may impose the penalty set out in the notice, a lesser penalty or no penalty. Failure to act If the person or entity neither pays the penalty nor applies for a review within the time and manner set out in the notice of violation, the person or entity is deemed to have committed the violation and is liable to the penalty in the notice. Notice of decision The President must cause notice of any decision made under subsection (2) or penalty imposed under subsection (3) to be served on the person or entity together with notice of the right of appeal under section 13. Appeal to Federal Court A person or entity on which a notice of a decision made under subsection 12(2) is served may appeal the decision to the Federal Court within 30 days after the day on which the notice is served, or within any longer period that the Court allows. Powers of Court On appeal, the Court may confirm, set aside or, subject to section 14, vary the decision. Penalties The range of penalties in respect of a violation is from $150 to $500 if the person or entity that committed the violation makes a full disclosure of the relevant facts when the person or entity is made aware of the violation; and there are no reasonable grounds to believe that the violation was intentionally committed. Value of the goods or financial transaction In any other case, the penalty is the greater of the fair market value of the imported or exported goods, the declared value of the imported or exported goods, and the value of the financial transaction purporting to pay for the goods being imported or exported. Multiple violations If multiple violations are committed with respect to goods imported or exported on board the same conveyance, as defined in subsection 2(1) of the Customs Act, the violations are treated as a single violation for the purposes of subsections (1) and (2). Criteria The amount of a penalty referred to in subsection 14(1) in respect of the violation is to be established having regard to the value of the goods or of the financial transaction involved; and the history of the person or entity that committed the violation with respect to any prior violation within the five-year period immediately before the violation. Due diligence defence not available Due diligence is not a defence in a proceeding in relation to a violation. Debts due to His Majesty The following amounts constitute a debt due to His Majesty in right of Canada that may be recovered in the Federal Court: the amount of the penalty set out in a notice of violation, beginning on the day on which it is required to be paid in accordance with the notice, unless the person or entity applies for a review in accordance with the notice of violation; the amount of the penalty imposed by the President under subsection 12(2), beginning on the day on which the period specified in the notice of decision expires or the day specified in the notice of decision; and the amount of the penalty determined by the Federal Court under subsection 13(2), beginning on the day on which the period specified in the decision for the payment of that amount expires or the day specified in the decision. Limitation period Proceedings to recover a debt referred to in subsection (1) may be commenced no later than the fifth anniversary of the day on which the debt becomes payable. Proceeds payable to Receiver General A debt referred to in subsection (1) that is paid or recovered is payable to and must be remitted to the Receiver General. Certificate The unpaid amount of any debt referred to in subsection 17(1) may be certified by the Governor. Registration in Federal Court Registration in the Federal Court of a certificate has the same effect as a judgment of that Court for a debt of the amount specified in the certificate and all related registration costs. Evidence In a proceeding in respect of a violation, a notice of violation purporting to be issued under subsection 11(1), a notice of decision purporting to be issued under subsection 12(4) or a certificate purporting to be made under subsection 18(1) is admissible in evidence without proof of the signature or official character of the person appearing to have signed it. Limitation Period No proceedings in respect of a violation may be commenced after the expiry of two years after the day on which the subject matter of the proceedings arose. S.C. 2024, c. 15 These Regulations come into force on the day on which section 285 of the Fall Economic Statement Implementation Act, 2023 comes into force, but if they are registered after that day, they come into force on the day on which they are registered. [Note: Regulations in force April 1, 2025.]