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Record keeping requirements for factors : FINTRAC's compliance guidance

From: Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)

This guidance outlines certain record keeping requirements for factors.

You have additional record keeping requirements detailed in the following guidance:

Note: Throughout this guidance, references to dollar amounts (such as $10,000) are in Canadian dollars unless otherwise specified.

In this guidance

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1. What records must I keep and what must they contain

You must keep the following records:

Note:

When you are required to keep records about your clients, you should be as descriptive as possible.

Being descriptive when recording the nature of the principal business or occupation of a client will help determine whether a transaction or activity is consistent with what would be expected for that client.

For example:

A copy of every report sent to FINTRAC

You must keep a copy of every report that you submit to FINTRAC as a record. Each has a retention period.

When you submit a:

Retention: You must keep a copy of the report for at least 5 years after the day it was submitted.

When you submit a:

Retention: You must keep a copy of the report for at least 5 years from the date it was created.

Large cash transaction records

You must keep a large cash transaction record when you receive $10,000 or more in cash.

Note: This requirement is subject to the 24-hour rule.

A large cash transaction record must include:

Retention: At least 5 years from the date the large cash transaction record was created.

Large virtual currency transaction records

You must keep a large virtual currency transaction record when you receive virtual currency in an amount equivalent to $10,000 or more.

Note: This requirement is subject to the 24-hour rule.

A large virtual currency transaction record must include:

Retention: At least 5 years from the date the large virtual currency transaction record was created.

Information records and other factoring agreement records

You must keep the following records in respect of every factoring agreement that you enter into:

Retention:

Receipt of funds records

When you receive funds of $3,000 or more, you must keep a receipt of funds record that includes:

If the receipt of funds record is in respect of an entity that is a corporation, you must also keep a copy of the part of its official corporate records that contains provisions relating to the power to bind the corporation regarding the transaction. This could be found in for example:

Retention:

Legal references

2. What are my responsibilities when maintaining records

In order to comply with your record keeping requirements, you must keep records in such a manner that they can be provided to FINTRAC within 30 days of a request. The records may also be requested through a judicial order by law enforcement to support an investigation of money laundering or terrorist activity financing. A record (or a copy) may be kept in a machine-readable or electronic form, so long as a paper copy can easily be produced.

Employees who keep records for you are not required to keep them after their employment ends. The same is true for persons in a contractual relationship with you, when the contractual relationship ends, they no longer have to keep records for you. You have to obtain and keep the records that were kept for you by an employee or contractor before the end of the person’s employment or contract.

There may be situations where you are required to keep records for purposes other than complying with your obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. For example, a federal or provincial regulator may require you to keep records in addition to those described in this guidance. If this is the case, you must still meet the requirements described in this guidance. For example, the retention period for your records can be longer than what is described, but it cannot be shorter.

Legal references

3. What are the exceptions to the record keeping requirements

If you are required to keep a record with information that is readily available in other records, you do not have to record the information again.

For example, when you keep a copy of a large cash transaction report you may choose to use this as your large cash transaction record for the same transaction, so long as all the information that would otherwise be kept in the large cash transaction record is captured within the report. Any requirement related to keeping the large cash transaction record would still apply, such as verifying identity.

Large cash transaction record and large virtual currency transaction record

You are not required to keep a large cash transaction record or a large virtual currency transaction record, if the cash or virtual currency is received from a:

Information record and other records in respect of every factoring agreement entered into
You are not required to keep an information record or other records in respect of every factoring agreement that you enter into, if the person or entity is:

Receipt of funds record
You are not required to keep a receipt of funds record if the amount is received from:

Legal references

For assistance

If you have questions on your requirements, please contact FINTRAC by email at guidelines-lignesdirectrices@fintrac-canafe.gc.ca.

Date Modified: