Financial entities

Your Obligations

The following summary of the legislative requirements under the PCMLTFA applies to you if you are a financial entity. This includes banks (that is, those listed in Schedule I or II of the Bank Act) or authorized foreign banks with respect to their operations in Canada, credit unions, caisses populaires, financial services cooperatives, credit union centrals (when they offer financial services to anyone other than a member entity of the credit union central), trust companies, loan companies and agents of the Crown that accept deposit liabilities.

• Reporting
  • Suspicious Transactions
  • Terrorist Property
  • Large Cash Transactions
  • Electronic Funds Transfers
• Record Keeping
• Ascertaining Identity
• Use of personal information
• Politically Exposed Foreign Person
• Third Party Determination
• Compliance Regime

Printable summary for financial entities (PDF version, 57 kb)

Additional Information for Financial Entities

• Penalties for Non-compliance
• FINTRAC Interpretation Notices
• Compliance Assessment Report

Reporting

• Suspicious transactions
  You must report where there are reasonable grounds to suspect that a transaction or an attempted transaction is related to the commission or attempted commission of a money laundering offence or a terrorist activity financing offence.
  
  See Guideline 2: Suspicious Transactions and Guideline 3: Submitting Suspicious Transaction Reports to FINTRAC
  
  
• Terrorist property
  You must report where you know that there is property in your possession or control that is owned or controlled by or on behalf of a terrorist or a terrorist group.
  
  See Guideline 5: Submitting Terrorist Property Reports to FINTRAC
  
  
• Large cash transactions
  You must report large cash transactions involving amounts of $10,000 or more received in cash.
  
  See Guideline 7: Submitting Large Cash Transaction Reports to FINTRAC
  
  
• Electronic Funds Transfers
  You must report international electronic funds transfers of $10,000 or more that you send or receive. These include the transmission of instructions for a transfer of funds made at the request of a client through any electronic, magnetic or optical device, telephone instrument or computer. In the case of SWIFT messages, only SWIFT MT 103 messages are included.
  
  See Guideline 8: Submitting Electronic Funds Transfer Reports to FINTRAC

Record Keeping

You must keep the following records:

• Large cash transaction records
• Signature cards
• Copies of official corporate records (binding provisions)
• Account holder information
• Account operating agreements
• Deposit slips
• Debit and credit memos
• Account statements
• Cleared cheques drawn on or deposited to an account
• Client credit files
• Foreign currency exchange transaction tickets
• A copy of the trust deed and settlor's identification (trust companies)
• Intended use of an account (except for credit card accounts)
• Credit card account records
• Copies of the suspicious transaction reports
• Records for the sale of traveller's cheques, money orders or other similar negotiable instruments of $3,000 or more
• Records for money orders redeemed for $3,000 or more
• Records for certain funds transfers that you send at the request of a client and include information with certain transfers
• Beneficial ownership records
• Correspondent banking relationship records

See Guideline 6G: Record Keeping and Client Identification for Financial Entities

Ascertaining Identity

You must take specific measures to identify the following individuals or entities:

• Any individual who signs a signature card or conducts a large cash transaction
• Any individual who conducts a foreign exchange transaction of $3,000 or more, unless a signed signature card exists
• Any corporation or other entity for which you open an account (including reasonable measures to obtain beneficial ownership information)
• Any settlor or co-trustee (trust companies)
• Any individual for whom you issue or redeem traveller's cheques, money orders or other similar negotiable instruments for $3,000 or more, unless a signed signature card exists
• Any individual who requests a funds transfer of $1,000 or more, unless a signed signature card exists
• Any individual for whom you have to send a suspicious transaction report (reasonable measures and exceptions apply)
• Any individual or entity for which you open a credit card account (including reasonable measures to obtain beneficial ownership information)
• Any individual member of a group plan account when contributions to the plan are not made by payroll deductions or by the plan's sponsor

See Guideline 6G: Record Keeping and Client Identification for Financial Entities

Use of personal information

The use of personal information in Canadian commercial activities is protected by the Personal Information Protection and Electronic Documents Act (PIPEDA), or by substantially similar provincial legislation. You have to inform individuals concerning the collection of personal information about them. However, you do not have to inform individuals when you include personal information about them in any of the reports that you are required to make to FINTRAC. You can get more information about your responsibilities in this area from the following:

• Industry Canada (Privacy For Business); or
• The Office of the Privacy Commissioner of Canada (http://www.priv.gc.ca).
  • The Office of the Privacy Commissioner of Canada has on its Web site information about how to comply with PIPEDA and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (http://www.priv.gc.ca/resource/io_pr_8_e.asp) that will help you in understanding your responsibilities under both federal laws.

Politically Exposed Foreign Person

You have to take reasonable measures to determine whether you are dealing with a politically exposed foreign person for new or existing accounts or certain electronic funds transfers of $100,000 or more. You also have to keep records and take additional measures.

See Guideline 6G: Record Keeping and Client Identification for Financial Entities

Third Party Determination

Where a large cash transaction record is required, or when a signature card or account operating agreement is created, you must take reasonable measures to determine whether the individual is acting on behalf of a third party.

In cases where a third party is involved, specific information about the third party and their relationship with the individual providing the cash or the account holder must be obtained.

See Guideline 6G: Record Keeping and Client Identification for Financial Entities

FINTRAC Interpretation Notice

FINTRAC issues FINTRAC interpretation notices (FINs) to provide technical interpretations and positions regarding certain provisions contained in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated Regulations.

• The 24-hour Rule

For more information on your obligations and on FINTRAC, you can also consult our Frequently Asked Questions.