The Office of the Superintendent of Financial Institutions has issued a new guideline setting out its expectations for federally regulated financial institutions in establishing policies and procedures to combat money laundering.

For the purposes of this guideline, FRFI includes banks, authorized foreign banks’ business in Canada (foreign bank branches), cooperative credit associations, trust and loan companies, and federally incorporated or regulated life insurance companies. It should be noted that the inclusion of life insurance companies in the application of the guideline is an expansion from that of the original guideline, which applied only to deposit-taking institutions.

This guideline has been modified to reflect several developments that have taken place since it was issued in September 1996. Key among these developments was the passage of a revised and enhanced Proceeds of Crime (Money Laundering) Act in July 2000. The new act expanded transaction record-keeping requirements, required the reporting of certain financial transactions, and established the Financial Transactions and Reports Analysis Centre of Canada.

The scope of the act was also expanded in December 2001 to address the financing of terrorist activities.

In modifying this guideline, OSFI has shifted the focus to the identification and mitigation of risks related to money laundering. In light of the role to be played by FINTRAC, much of the material contained in the previous guideline related to transaction identification and reporting has been omitted.