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Record keeping requirements for money services businesses and foreign money services businesses : FINTRAC’s compliance guidance

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

This guidance outlines certain record keeping requirements for money services businesses and foreign money services businesses.

You have additional record keeping requirements that are 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 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 five years from the date it was created.

Large cash transaction records

Money services businesses must keep a large cash transaction record when they receive $10,000 or more in cash.

Foreign money services businesses must keep a large cash transaction record when they receive $10,000 or more in cash from a person or an entity in Canada.

If you authorize a person or an entity to receive funds on your behalf, and that person or entity receives $10,000 or more in cash in accordance with the authorization, you are deemed to have received the amount when it is received by the person or entity, and you must keep a large cash transaction record.

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

A large cash transaction record must include:

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

Large virtual currency transaction records

Money services businesses must keep a large virtual currency transaction record when they receive virtual currency in an amount equivalent to $10,000 or more.

Foreign money services businesses must keep a large virtual currency transaction record when they receive virtual currency in an amount equivalent to $10,000 or more from a person or an entity in Canada.

If you authorize a person or an entity to receive virtual currency on your behalf and that person or entity receives virtual currency in an amount equivalent to $10,000 or more in accordance with the authorization, you are deemed to have received the virtual currency when it is received by the person or entity, and you must keep a large virtual currency transaction record.

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

A large virtual currency transaction record must include:

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

Records of transactions of $3,000 or more

Issuance of traveller’s cheques, money orders or other similar negotiable instruments

When you receive $3,000 or more in funds or an equivalent amount in virtual currency for the issuance of traveller’s cheques, money orders or other similar negotiable instruments from a person or entity, you must record:

Redemption of money orders

When you redeem one or more money orders for a total value of $3,000 or more in funds or in an equivalent amount of virtual currency at the request of a person or entity, you must record:

Retention: At least five years from the date the record for a transaction of $3,000 or more was created.

Records of remitting and transmitting $1,000 or more in funds by means other than an electronic funds transfer

Transmitting $1,000 or more in funds

When you transmit $1,000 or more in funds at the request of a person or an entity by means other than an electronic funds transfer (for example, by using informal value transfer systems such as Hawalas), you must record:

Remitting $1,000 or more in funds to a beneficiary

When you remit $1,000 or more in funds to a beneficiary at the request of a person or an entity by means other than an electronic funds transfer (for example, by using an informal value transfer systems such as Hawala), you must record:

Retention: At least five years from the date the record for the transmission or remittance of $1,000 or more was created.

Records of electronic funds transfers of $1,000 or more

Initiating an electronic funds transfer of $1,000 or more

When you initiate, at the request of a person or an entity, an electronic funds transfer of $1,000 or more, you must record:

Sending an international electronic funds transfer of $1,000 or more

When you send, as an intermediary, an international electronic funds transfer of $1,000 or more that was initiated by another reporting entity, you must record:

Final receipt of an international electronic funds transfer of $1,000 or more

When you are the final recipient of an international electronic funds transfer of $1,000 or more, you must record:

Note:

When you initiate, send as an intermediary, or finally receive an electronic funds transfer, you must include with the transfer the prescribed information in accordance with the travel rule. For more information, consult: Travel rule for electronic funds and virtual currency transfers.

Retention: At least five years from the date the electronic funds record of $1,000 or more was created.

Records of virtual currency transfers in amounts equivalent to $1,000 or more

Virtual currency transfer in an amount equivalent to $1,000

When you transfer virtual currency in an amount equivalent to $1,000 or more at the request of a person or entity, you must record:

Receipt of virtual currency in an amount equivalent to $1,000 or more for remittance to a beneficiary

When you receive virtual currency in an amount equivalent to $1,000 or more for remittance to a beneficiary, you must record:

Note:

When you transfer virtual currency, you must include with the transfer the prescribed information in accordance with the travel rule.

When you receive virtual currency, you must take reasonable measures to ensure that the transfer received includes the prescribed information.

For more information, consult: Travel rule for electronic funds and virtual currency transfers.

Retention: At least five years from the date the virtual currency transfer or virtual currency receipt record was created.

Foreign currency exchange transaction tickets      

You must keep a transaction ticket, which may take the form of an entry in a transaction register, for every foreign currency exchange transaction you conduct, regardless of the amount.

Each transaction ticket must include:

Retention: At least five years from the date the foreign exchange transaction record was created.

Virtual currency exchange transaction tickets

You must keep virtual currency exchange transaction tickets, which may take the form of an entry in a transaction register, for every virtual currency exchange transaction you conduct, regardless of the amount.

Each transaction ticket must include:

Retention: At least five years from the date the virtual currency exchange transaction record was created.

Crowdfunding platform services records

If you are a money services business or foreign money services business that provides crowdfunding platform services to persons or entities in Canada, you must:

Retention: At least five years from the date the crowdfunding platform services record was created.

Internal memorandum records

You must keep a record of every internal memorandum (i.e. any memo, note, message or similar communication) that you create or receive in the normal course of business regarding money services business/foreign money services business services you provide to clients.

Retention: At least five years from the date the internal memorandum record was created.

Service agreement records

Money services businesses that enter into an agreement with an entity to provide a money services business service covered under section 5(h) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Act), and foreign money services businesses that enter into an agreement with an entity in Canada to provide a foreign money services business service covered under section 5(h.1) of the Act must keep a record of:

If there were subsequent changes to the articles of incorporation or bylaws that relate to the power to bind the corporation regarding transactions, and these changes were applicable at the time the service agreement record was created, the board resolution stating the change should be included in the record.

Retention: At least five years from the day the last transaction was conducted.

Transport records

If you are a money services business or foreign money services business that transports cash, virtual currency (such as the storage of virtual currency) or negotiable instruments (such as money orders or traveller’s cheques) in Canada, you must keep the following records listed below.

Transport of $1,000 or more in cash or virtual currency at the request of a person or entity

When you transport $1,000 or more in cash or virtual currency (such as the storage of virtual currency), at the request of a person or entity, you must record:

Retention: At least five years from the date the transport of $1,000 or more in cash or virtual currency record was created.

Transport of $3,000 or more in negotiable instruments at the request of a person or entity

When you transport $3,000 or more in negotiable instruments, such as money orders or traveller’s cheques, at the request of a person or entity, you must record:

Retention: At least five years from the date the transport of $3,000 or more in negotiable instruments record was created.

Transport of undeclared amount of cash, virtual currency or negotiable instruments at the request of a person or entity

When you transport an undeclared amount of cash, virtual currency (such as the storage of virtual currency) or negotiable instruments (such as money orders or traveller’s cheques) that cannot be readily determined, you must record:

Retention: At least five years from the date the transport of an undeclared amount of cash, virtual currency or negotiable instruments record was created.

Transport of cash, virtual currency or negotiable instruments at the request of a bank, credit union or caisse populaire

When you transport cash, virtual currency (such as the storage of virtual currency) or negotiable instruments (such as money orders or traveller’s cheques), at the request of a bank, credit union or caisse populaire, you must record:

Retention: At least five years from the date the transport of cash, virtual currency or negotiable instruments at the request of a bank, credit union or caisse populaire record was created.

Cheque cashers records

Cash one or more cheques that total $3,000 or more

If you are a money services business or foreign money services business that cashes one of more cheques that total $3,000 or more at the request of a person or entity in Canada, you must record:

Retention: At least five years from the date the cheque cashers record was created.

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 your requirements 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 of 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 records and large virtual currency transaction records

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:

When you transfer or receive virtual currency as compensation for the validation of a transaction that is recorded in a distributed ledger or when you exchange, transfer or receive a nominal amount of virtual currency for the sole purpose of validating different transaction or a transfer of information, you do not need to keep a record of:

Service agreement records

You do not have to keep any service agreement records (including information records) when you enter into a service agreement with an entity only for the transport of cash, virtual currency (such as storage of virtual currency) or money orders, traveller’s cheques or similar negotiable instruments between:

This same exception exists when you enter into a service agreement with an entity only for the transport of coins of the currency of Canada for the purposes of delivery in accordance with the Royal Canadian Mint Act.

Transport records

You do not have to keep transport records when you transport cash, virtual currency (such as storage of virtual currency), money orders, traveller’s cheques or other similar negotiable instruments between:

The same exception exists for the transport of coins of the currency of Canada for the purposes of delivery in accordance with the Royal Canadian Mint Act.

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: