Budget 2013 - Information Requirements Regarding Unnamed Persons

Notice to the reader

This measure has received Royal Assent.

The CRA must first obtain judicial authorization, on ex parte application (without the CRA being legally required to notify the third party of the application), before issuing a requirement to a third party to provide information or documents.

The budget proposes to eliminate the ex parte aspect of the authorization process. As a result, notice will be given to the third party when the CRA initially seeks a court order from a judge of the Federal Court. Instead of requesting a review of the authorization and delaying the process, the third party will be given an opportunity to make any representations at the hearing of the application for the authorization.

When can the CRA issue a requirement for information?

The CRA may issue a requirement to obtain information or documents for any purpose relating to the administration or enforcement of its statutes. However, judicial authorization from a judge is required before issuing a requirement on a third party to provide information related to an unnamed person or persons.

Under what circumstances does the CRA issue a requirement to a third party?

The CRA will issue a requirement to a third party to obtain information for the purpose of verifying compliance of an unnamed person or persons. For example, a requirement may be issued to a financial intermediary to identify unnamed persons that hold foreign assets or are involved in foreign financial transactions.

Can the authorization for an unnamed requirement be challenged?

Currently, the CRA will issue a requirement to a third party after authorization has been received. As the third party did not participate in the hearing of the application for the authorization, the third party may seek a review of the authorization, which can significantly delay the process before providing any information.

What is changing with respect to the process for obtaining authorization for a requirement for unnamed persons?

For applications made after Royal Assent, the budget proposes to eliminate the ex parte aspect of the authorization process. As a result, notice will be given to the third party when the CRA initially seeks a court order from a judge of the Federal Court.

Instead of requesting a review of the authorization and delaying the process, the third party will be given an opportunity to make any representations at the hearing of the application for the authorization. As the third party has an opportunity to be present during the hearing, the budget also proposes to eliminate the right to seek a subsequent review of the authorization.

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