Video 6 – Verifying the identity of an entity
From: Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
This video explains how to verify the identity of an entity as prescribed by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Act) and associated Regulations.
It is intended for businesses or reporting entities, subject to the Act and associated Regulations.
Video
Video length: 5:13 minutes
Catalogue number: FD4-34/2024E-MP4
ISBN: 978-0-660-68687-5
Descriptive transcript of the video “Verifying the identity of an entity”
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[Start of video] [Music] At the Financial Transactions and Reports Analysis Centre of Canada (or FINTRAC), we are committed to helping regulated businesses meet their compliance obligations. |
Text on screen: Verifying the identity of an entity Text on screen: Financial Transactions and Reports Analysis Centre of Canada Animation: FINTRAC logo with 10 icons representing the following sectors:
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This includes the fundamental requirement to verify the identity of a client that is an entity. This video explains the three prescribed methods you can use. |
Text on screen (next to the building):
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An entity is defined as a corporation, trust, partnership, fund or an unincorporated association or organization. |
Text on screen: The list of methods disappear. A new list appear on the right of the building. Text on screen (next to the building): |
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To use the confirmation of existence method when verifying the existence of a corporation, you must confirm its name, address, and the names of its directors by referring to either:
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Animation: The words “1) Confirmation of existence method” appear above the building. Text on screen (above the building):
Animation: The word “Corporation” is moved over the building as it glows brighter. Text on screen (on a clipboard): Animation: Icons appear one-at-a-time, representing: a certificate of incorporation with a red maple leaf, and a banker’s file box bearing the words Annual records on it and files inside marked 2021, 2022, 2023 with 2022 popping up. The icons disappear and are replaced with icons representing a Corporate status certificate, a signed Annual report and a Notice of assessment letter. |
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To use this method when verifying the existence of an entity other than a corporation, you must confirm its name and address by referring to either:
In all instances, when using the confirmation of existence method to verify the identity of an entity, the information you refer to must be authentic, valid and current. |
Animation: The icons disappear as the building moves to the centre of the frame. On the front of the building, the words, Trust, Partnership, Fund, Association and Organization begin to glow brighter and Corporation fades. Text on screen (on a clipboard): The building moves to the right and icons begin to pop up on its left. These icons include: a partnership agreement, articles of association, and an icon representing other records. The icons transform into three text bubbles bearing definitions and the word Corporation glows along with all the other words on the front of the building. Text on screen: authentic valid current |
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The second method you can use to verify the identity of an entity is the reliance method. |
Animation: A building is at the centre of the frame under the title and fades away. Text on screen: Reliance method |
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To use this method, you must rely on identity verification measures that were previously taken by another regulated business referred to in section 5 of the PCMLTFA; |
Animation: A smaller version of the sector wheel appears and moves to the left of the frame with a closed legal book on the right. Text on screen: Proceeds of Crime (Money Laundering) and Terrorist Financing Act Animation: The title of the book is replaced by its acronym form (PCMLTFA) as the book then opens to a centrefold page. Text on screen: |
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or by an affiliated foreign entity or another regulated business’ foreign affiliate that carries out activities outside of Canada similar to those referred to in paragraphs 5(a) to (g) of the PCMLTFA. |
Animation: The sector wheel is replaced by a spinning globe while the open book remains in the frame. Text on screen: Foreign entity Animation: The page turns. Text on screen: |
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Before relying on measures previously taken by a foreign affiliate, you must consider the risk of money laundering or terrorist activity financing in their jurisdiction. |
Animation: All icons disappear from the frame except for the globe. Circling the globe are 2 icons representing money laundering and terrorist activity financing. |
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And be satisfied that their policies are similar to that of the client identity verification, record keeping, and compliance program requirements under Canada’s PCMLTFA. |
Animation: Everything disappears except the globe. Circling the globe are two icons for money laundering and terrorist activity financing. Animation: A manual replaces the globe and the 2 icons. Text on screen (title of the manual): Compliance policies Animation: The book opens and 3 icons appear, on the left, a building with a check mark, on the right, a file folder with Client identity records and a ribbon with a star beside the letters PCMLTFA. |
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These include:
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Animation: The manual opens to a centerfold page with a meter icon that ranges from “low risk” to “high risk” on the left page, and the icons for money laundering and terrorist activity financing on the right page. The needle on the meter moves from “low risk” to “high risk”. Animation: A stamp appears across the 2 icons for money laundering and terrorist activity financing on the right page Text on screen (stamped text): Enhanced measures |
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Considering this risk, you must also be satisfied that the foreign affiliate’s compliance with those policies is subject to the supervision of a competent and legal authority of that jurisdiction, like FINTRAC. |
Animation: The manual closes revealing its title once again. A magnifying glass enters the frame and its lens scans across the cover of the manual. Text on screen:
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When using the reliance method, you must obtain, as soon as feasible, the confirmed information from the foreign affiliate you are relying on, and be satisfied that they verified the identity of the entity using the confirmation of existence method. |
Animation: The frame is replaced by the building in the center, the sector wheel rotating clockwise reappears on the right side of the building, and a spinning globe reappears on the left side of the building. Lines carrying information move from the sector wheel and globe to the silhouette. Text on screen (same information appearing twice and moving from the globe and the sector wheel to the silhouette):
Animation: A green checkmark appears in front of the building and the words “Confirmation of existence method” appear at the top right of the screen. |
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You must be satisfied that the information is valid and current. Also, you must have a written agreement in place with the other regulated business or foreign affiliate that, upon request and as soon as feasible, requires them to provide you with all of the information they referred to in order to verify the identity of the entity. |
Animation: The globe, sector wheel and lines carrying information are replaced by unfolding scrolls on either side of the silhouette. Text on screen: valid current Animation: The definitions disappear as a document bearing the word Agreement appears next to the building. A folder marked Client identity records appears to the right of the building. A file marked Annual report pops out of the folder. There are two sections on the report. The top section says Corporate information and below that Name, Address, and Directors. The lower section says Method used and below that Reliance method. |
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The third method you can use to verify the identity of an entity is the simplified identification method. To use this method, you must be a regulated business referred to in paragraphs 5(a) to (g) of the PCMLTFA. You must complete a risk assessment to determine that there is a low risk of a money laundering or terrorist activity financing offence associated with the entity. And you must be satisfied that the entity exists and that every person who deals with you on behalf of the entity is authorized by it to do so. Note, only certain regulated businesses can have their identity verified using this method. Please refer to the main regulations, Paragraphs 111(1)(a) and 114(1)(a) for more information. |
Animation: The documents disappear and the building remains with new title: Text on screen: Simplified identification method All the words on the front of the building are still glowing. A large clipboard marked Identity verification requirements moves into frame, overlapping the building. Text on screen: A checkmark appears at the top of the clipboard beside the text: Regulated business referred to in paragraphs 5(a) to (g) of the PCMLTFA Text on screen: A dotted line emits from this checkmark, extending to a book marked: PCMLTFA
Text on screen: A second checkmark appears on the clipboard beside the text: Risk assessment A dotted line emits towards a bubble containing icons for money laundering and terrorist activity financing. Stamped across these are the green words low risk. Text on screen: A third checkmark on the clipboard says: Confirmation of existence A dotted line extends from it to an icon of a group of people stamped with the word authorized. Only the book remains, flips a bunch of pages, where a tab appears, marked Regulations, and on the page: Paragraphs |
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If at any point, you assess that the risk of a money laundering or terrorist activity financing offence is no longer low, you must verify the identity of the entity using the confirmation of existence method, as soon as feasible. |
Animation: The clipboard leaves frame but the bubble containing the money laundering and terrorist activity icons remains and floats around the building. The words stamped across the icons change from green to red and from low risk to high risk. Text on screen: The bubble with the icons floats away as a green checkmark appears across the building and a title overhead says: Confirmation of existence method |
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This video series is designed to help businesses understand their identity verification obligations under Canada’s federal anti-money laundering/anti-terrorist financing law. |
Animation: The frame transforms into the FINTRAC logo with 10 icons representing the following sectors:
Text on screen: Proceeds of Crime (Money Laundering) and Terrorist Financing Act |
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Please refer to the PCMLTFA and associated Regulations for the full description of your obligations. |
Text on screen: PCMLTFA |
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Together, we can all help to safeguard Canadians and the integrity of Canada’s financial system. |
Animation: Then the logo morphs into a map of Canada where lines light up as they crisscross and connect various dots on the map. |
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[Music fading out] |
Text on screen: For more information about your compliance obligations, including other ways to verify the identity of a client, visit: fintrac-canafe.canada.ca |
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[End of video] |
Canada wordmark |
Related links
- Methods to verify the identity of persons and entities
- Video 1 – Verifying the identity of a client: Government-issued photo ID method
- Video 2 – Verifying the identity of a client: Credit file method
- Video 3 – Verifying the identity of a client: Dual-process method
- Video 4 – Verifying the identity of a client: Affiliate method
- Video 5 – Verifying the identity of a client: Reliance method
- Date Modified: