Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) imposes reporting requirements on Money Services Businesses (MSBs) to help combat money laundering and terrorist financing. These reporting requirements typically include:
- Large Cash Transaction Reports (LCTRs): MSBs are required to report any single cash transaction of $10,000 or more (or equivalent in foreign currency) conducted by or for any client in the course of their business activities.
- Electronic Funds Transfer Reports (EFTRs): MSBs must report any electronic funds transfer (EFT) of $10,000 or more (or equivalent in foreign currency) that they send or receive on behalf of a client.
- Suspicious Transaction Reports (STRs): MSBs are obligated to report any transaction they have reasonable grounds to suspect is related to money laundering or terrorist financing activities.
- Terrorist Property Reports (TPRs): MSBs must report any property they have reason to believe is owned, controlled, or possessed by or on behalf of a terrorist or terrorist group.
- Large Virtual Currency Transaction Reports (LVCTRs): As of June 1, 2020, MSBs dealing in virtual currencies are required to report any virtual currency transaction of $10,000 CAD or more (or equivalent in foreign currency) within a single 24-hour period.
- Identity Verification and Record Keeping: MSBs are required to verify the identity of clients and keep records of transactions, including the purpose and nature of the business relationship.
Compliance with these reporting requirements is essential for MSBs to fulfill their regulatory obligations and mitigate the risk of non-compliance penalties, which can include fines and other sanctions. It’s crucial for MSBs to have robust internal controls, policies, and procedures in place to ensure adherence to FINTRAC regulations. Additionally, ongoing training for staff on compliance matters is essential to maintain a culture of compliance within the organization.
