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Money laundering and terrorist financing

Money laundering and terrorist financing are becoming significant problems worldwide. The International Monetary Fund estimates that $500 billion (US) is laundered worldwide every year.

To combat the effects of money laundering and terrorist financing, the federal government enacted the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). This law dramatically changes how individuals and institutions across Canada assist the government and police in the fight against money laundering.

At Servus Credit Union, we believe it is important that you are informed of our mandatory obligations under the law. This page has been designed to provide you with some of the basic facts about the law and the subsequent obligations placed upon us.

Money laundering

Money laundering is commonly defined as:

"any act or attempt to disguise the source of money or assets derived from criminal activity."

Simply put, money laundering is the term used to describe methods used by criminals to convert the proceeds of crime into what appears to be legitimate income. If successful, the criminal is then able to spend the "clean" money without raising the suspicions of police or tax authorities.

The profits laundered by these criminals can be used for any purpose. The police have found that, in Canada, laundered money is used to:

  • Amass wealth and power
  • Continue or expand criminal or terrorist operations
  • Corrupt or influence legitimate sectors of the economy

The process of money laundering affects the Canadian economy by:

  • Reducing tax revenues
  • Creating unfair competition for legitimate businesses
  • Damaging the financial system
  • Disrupting legitimate economic development

At Servus Credit Union we are working to ensure we comply with the federal money laundering law and will do our part to keep Canada's financial sector strong.

Terrorist financing

Terrorist financing refers to the routing of funds to terrorist organizations through both informal networks and the formal financial system.

Terrorist groups frequently obtain revenue through legal means. Supporters of terrorist causes may, for example, raise funds from their local communities by hosting events or membership drives.

One way to deter terrorist activities is to detect and curtail the flow of money needed to finance the act.

Our obligations

Under PCMLTFA financial institutions, like Servus Credit Union, are required to report to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) financial information and intelligence on suspected money laundering and terrorist financing activities.

Another requirement of the ACT is the identification of clients. At Servus Credit Union that means our member-owners. When processing your transaction or opening an account, you will be asked to provide identification such as:

  • A birth certificate
  • A driver's license
  • An Alberta Health Care card

We are required by law to ask for identification - regardless of how long you've been a member, or if the person serving you is your next door neighbour.

By providing us with this information you are helping Servus meet its legal obligation and supporting the fight against money laundering and terrorist financing.

Depending on the type of transaction you are conducting we may also be required to ask some additional questions, like whether or not you are acting on behalf of a third party.

Your privacy will be protected at Servus Credit Union. No personal information will be shared without your permission or where required by law.

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