FINTRAC (Financial Transactions and Reports Analysis Centre of Canada)

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is Canada's financial intelligence unit and its anti-money-laundering and anti-terrorist-financing supervisor. It receives reports from businesses covered by Canadian AML law, analyzes them, and discloses intelligence to police and other authorities. It also supervises those businesses for compliance, and it maintains the registry of money services businesses (MSBs). Registration with FINTRAC is mandatory before an MSB may operate in Canada, but it is not a license: FINTRAC grants no permission to transmit money and does not assess an MSB's business model, solvency or consumer practices.

FINTRAC is an independent federal agency reporting to the Minister of Finance and is based in Ottawa. For its full profile, see the FINTRAC regulator profile.

FINTRAC was created in 2000 under the Proceeds of Crime (Money Laundering) Act, which became the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) after terrorist financing was added in 2001. Mandatory MSB registration began in 2008. Major regulatory amendments that came into force in 2020 and 2021 extended the regime to dealers in virtual currency, introduced the category of foreign money services business for firms abroad serving Canadians, and added new reporting obligations.

Reporting entities, including banks, credit unions, MSBs, securities dealers, casinos, real estate businesses and dealers in precious metals, must file several types of report:

• Suspicious transaction reports, with no minimum amount, where there are reasonable grounds to suspect a transaction is related to money laundering or terrorist financing.
• Large cash transaction reports for receipts of CAD 10,000 or more in cash, including multiple amounts within 24 hours.
• Electronic funds transfer reports for international transfers of CAD 10,000 or more sent or received.
• Large virtual currency transaction reports for receipts of virtual currency equivalent to CAD 10,000 or more.
• Terrorist property reports where the entity holds property of a listed terrorist group.

The suspicious transaction report is Canada's counterpart to the US suspicious activity report filed with FinCEN. FINTRAC also expects reporting entities to apply the travel rule for wire and virtual currency transfers.

Businesses that remit or transmit funds, deal in foreign exchange, issue or redeem money orders and similar instruments, deal in virtual currency, operate armored car services or engage in crowdfunding platform services must register as MSBs. Registration requires information about the business, its owners and its agents, and certain criminal convictions bar a person from registering. Registration must be renewed every two years, and FINTRAC can deny or revoke it. MSBs must implement a compliance program with a compliance officer, written policies, a risk assessment, training and a two-year effectiveness review, mirroring the elements of an AML program elsewhere.

Some provinces add their own requirements. Quebec requires MSBs to obtain a license from its Autorité des marchés financiers, and the federal Retail Payment Activities Act requires many payment service providers to register with the Bank of Canada, which supervises safeguarding of funds and operational risk. A firm moving money in Canada may therefore need to deal with FINTRAC, the Bank of Canada and a provincial regulator.

FINTRAC conducts examinations of reporting entities, either on site or remotely, and can issue administrative monetary penalties for violations, publishing the names of penalized businesses. Serious non-compliance can be referred for criminal prosecution. Penalties have been imposed on banks, MSBs and virtual currency dealers, and the PCMLTFA has been amended to raise the maximum penalties. For context on how FINTRAC compares with counterparts, see AUSTRAC, which plays a similar combined intelligence and supervisory role in Australia. FINTRAC's remit is narrower than that of an authorizing regulator such as the Dubai Financial Services Authority (DFSA), which decides whether a firm may carry on financial services at all.

FINTRAC is a member of the Egmont Group of financial intelligence units and exchanges information with foreign counterparts under agreements. Canada is a member of the FATF, and its mutual evaluations have examined FINTRAC's effectiveness, including concerns about the quality and use of intelligence and gaps in coverage of some sectors that later amendments sought to close. Its listing of high-risk jurisdictions in ministerial directives draws on FATF lists and on sanctions regimes administered by other federal departments.

• FINTRAC