Sunday, 30 September 2012

FINTRAC Audit Report

Thanks to Lawrence Brendel of Forest of Jewels in Edmonton who has offered to share his FINTRAC experience with The Toddwaz Report.

Hi Todd,

My FINTRAC Compliance Examination was conducted on Friday morning and didn’t take the five hours that was noted in their letter to me. In fact, the compliance officer was here for less than an hour. The whole process ran smoothly and she was very pleasant to work with.

FINTRAC gave me a month to prepare for the examination but of course I left it to the last minute. They requested two written documents from me in preparation for the examination. First were my store’s policies and procedures for compliance with PCMLTFA (Proceeds of Crime Money Laundering and Terrorist Financing Act) and second was a risk based assessment pertaining to the level and types of risk that are specific to my business. I was supposed to send copies of these documents to the compliance officer 5 days before the exam but I forgot to do this. This failure was noted on my file. I decided that it would be in my best interest to be fully prepared on Friday morning. I was.

I thought I was quite diligent in writing my store’s Compliance Regime but at the end of the exam I was noted for a couple of deficiencies. One was an omission in how to deal with Terrorist Property. “What?” I asked the compliance officer. “How would I be able to distinguish this from regular property? Give me some examples?” She wasn’t too clear in her answer but I still need to have a written procedure for dealing with it. My deficiencies will be outlined in a forthcoming letter and I will need to address them.

It was also mentioned to me before the exam that FINTRAC wanted to see my bank statements specifically relating to cash deposits. I guess I didn’t hear or read that but I didn’t have them with me at exam time. However, the compliance officer was satisfied with viewing the monthly sales reports on my computer. She reviewed the last 6 months.

The Canadian Jewellery Association has an Anti-Money Laundering and Compliance Kit on their website under “Members Area”. I strongly recommend reading it and using it for staff training. It outlines what FINTRAC is about and what is required in your policies and procedures and your risk assessment. I would like to thank the CJA and JVC for putting this kit together. It is a great aid.

The Compliance Exam and the preparation leading up to it were not an unpleasant experience. My only regret is that I did not have time for a coffee with Todd but I’ll hit him up for a free one next time!

Lawrence Brendel
Forest of Jewels, Edmonton

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