Emergency Economic Measures Order and Regulation
On February 15, 2022, the Government of Canada made the Emergency Economic Measures Order (the Order) and the Emergency Economic Measures Regulations (the Regulations) under the Emergencies Act.
The Regulations prohibits public assemblies that may reasonably be expected to lead to a breach of the peace by serious disruption of trade, interference with critical infrastructure, or support of the threat or use of acts of serious violence against people or property. The aim of the Order and Regulations are to address the protest activities of those involved, either directly or indirectly, in the “Freedom Convoy” and related protests (the Activities). Specifically, the Regulations seek to address and restrict the flow of funds to groups and individuals supporting the Activities.
In addition to banks, trust companies, and money service businesses (MSBs), the following entities are also subject to the restrictions imposed under the Regulations:
- Entities that provide a platform to raise funds or virtual currency through donations; and
- Entities that perform a variety of payment processing functions described in the Regulations.
Entities subject to the Regulations are required to:
- Cease Dealings: The entities must cease dealing in any property, facilitating any transaction, making available any property (including funds) or providing any financial services to or for the persons involved in the Activities.
Determine if they have Property: The entities are required to determine “on a continuing basis” whether they are in possession or control of property that is owned, held or controlled by persons involved in the Activities.
- Disclose to RCMP/CSIS: The entities must disclose without delay to the RCMP or CSIS the existence of any property in their possession or control that they have reason to believe is owned, held or controlled by or on behalf of a person involved in the Activities.
- Register with FINTRAC: The entities must register with FINTRAC (the entity responsible for monitoring anti-money laundering legislation in Canada), but only if they are in possession or control of property that is owned, held or controlled by or on behalf of persons involved in the Activities.
- Report Suspicious Transactions: If the entity is required to register with FINTRAC, it must also report to FINTRAC every transaction where there are reasonable grounds to suspect that it relates to money launder or terrorist financing by a person involved in the Activities.
- Report $10,000 Transactions: If the entity is required to register with FINTRAC, it must also report to FINTRAC every transaction involving the sending or receiving of $10,000 or more from a person or entity in a single transaction or within 24 hours, made either by cash or by international electronic funds transfer.
That said, our expectation is that the anti-money laundering legislation in Canada (specifically, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) will be amended to specifically include platforms that raise funds through donations and payment processors. At present, these entities have not fallen within the scope of MSBs and have been exempt from the obligations of the PCMLTFA.
This article provides only general information about legal issues and developments, and is not intended to provide specific legal advice. Please see our disclaimer for more details.