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Archived - Reporting suspicious transactions to FINTRAC

Archived information

The guidance Reporting suspicious transactions to FINTRAC replaces this content, which has been archived on April 8, 2024.

Archived information is provided for reference, research or recordkeeping purposes. It is not subject to the Government of Canada Web Standards and has not been altered or updated since it was archived. Please contact FINTRAC to request a format other than those available.

Archived

This page has been archived on the Web.

As of June 1, 2021:

Overview

Suspicious transaction reporting requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations are applicable to all reporting entity sectors.

It is recommended that this guidance be read in conjunction with the other suspicious transaction reporting guidance, which includes:

**Note:All references to transactions should be read to include attempted transactions and completed transactions. All references to the commission of an ML/TF offence also include the attempted commission of an ML/TF offence.

Who is this guidance for

  • All reporting entities (REs)

In this guidance

  1. When must I submit a suspicious transaction report (STR) to FINTRAC?
  2. Service provider agreements
  3. How to submit STRs
  4. Review and validation of reports by FINTRAC
  5. Completing the STR form
  6. Field completion instructions

 

Related guidance

 

Exclusions

Accountants and accounting firms

If you are an accountant or an accounting firm, the suspicious transaction reporting requirement does not apply to the receipt of professional fees.

British Columbia notaries

If you are a British Columbia notary, the suspicious transaction reporting requirement does not apply to the receipt or payment of professional fees, disbursements, expenses or bail.

Dealers in precious metals and precious stones

If you are a dealer in precious metals and precious stones, the suspicious transaction reporting requirement does not apply if you engage in a purchase or sale carried out for, in connection with, or for the purpose of manufacturing jewellery, extracting precious metals or precious stones from a mine or cutting or polishing precious stones.

Financial entities

If you are a financial entity and you have foreign subsidiaries or foreign branches, the suspicious transaction reporting requirement does not apply to the operations of these subsidiaries or branches outside Canada.

Life insurance companies, brokers and agents

If you are a life insurance company and you have foreign subsidiaries or foreign branches, the suspicious transaction reporting requirement does not apply to the operations of these subsidiaries or branches outside Canada.

Real estate brokers or sales representatives

If you are a real estate broker or sales representative, the suspicious transaction reporting requirement does not apply to your activities related to property management.

Securities dealers

If you are a securities dealer and you have foreign subsidiaries or foreign branches, the suspicious transaction reporting requirement does not apply to the operations of these subsidiaries or branches outside Canada.

1. When must I submit a suspicious transaction report (STR) to FINTRAC?

Pursuant to subsection 9(2) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations, "the person or entity shall send the report to the Centre as soon as practicable after they have taken measures that enable them to establish that there are reasonable grounds to suspect that the transaction or attempted transaction is related to the commission of a money laundering offence or a terrorist activity financing offence."

These measures include:

After completing the measures that enabled you to determine that you have reasonable grounds to suspect (RGS) that a transaction is related to the commission of an ML/TF offence, you must submit an STR to FINTRAC as soon as practicableFootnote 1. These measures must be described in your your compliance policies and procedures.

As soon as practicable is interpreted to mean that you have completed the measures that have allowed you to determine that you reached the RGS threshold and as such the development and submission of that STR must be treated as a priority. FINTRAC expects that you are not giving unreasonable priority to other transaction monitoring tasks and may question delayed reports. The greater the delay, the greater the need for a suitable explanation. STRs can be complex, yet you must treat them as a priority and ensure they are timely; you must also complete the measures that enabled you to conclude that you have RGS the transaction is related to the commission of an ML/TF offence before you submit the report to FINTRAC.  

There is no monetary threshold associated with the reporting of a suspicious transaction and under the Canadian anti-money laundering and anti-terrorist financing (AML/ATF) regime, STRs may contain transactions that must be submitted to FINTRAC in other types of reports. For example, if a completed transaction reported in an STR involved the receipt of cash from a client of 10,000 Canadian Dollars (CAD) or more, you would also be required to report this transaction to FINTRAC in a large cash transaction report (LCTR).

2. Service provider agreements

A service provider can submit and correct STRs on your behalf. However, as the reporting entity, you are ultimately responsible for meeting your obligations under the PCMLTFA and associated Regulations, even if a service provider is reporting on your behalf. This legal responsibility cannot be delegated.

3. How to submit STRs

If you have a computer and an internet connection, you must submit STRs to FINTRAC electronically. You must submit by paper if you do not have the technological capacity to send an STR electronically.

Electronic reporting

There are two options for electronic reporting that provide for secure encrypted transmission that ensures your data's confidentiality and integrity. These two electronic reporting options are listed below.

For more information about FINTRAC's electronic reporting system enrolment, see our electronic reporting page.

FINTRAC web reporting is a secure application accessed through the internet that allows you to manually submit individual reports, as well as correct them if needed. It is geared towards reporting entities with lower reporting volumes. To report STRs electronically, you must be enrolled and logged in to the FINTRAC web reporting system. For more information on FINTRAC web reporting, see the following document:

Batch reporting is a secure process that allows for the submission and correction of multiple reports (up to 10,000) in 'Batch files' that are formatted according to FINTRAC's specifications. To use the Batch reporting system, FINTRAC will provide you with Batch transmission software but you will also need to enroll in FINTRAC web reporting and apply for a public key infrastructure (PKI) certificate. For more information on Batch reporting, see the following links and documents.

Paper reporting

FINTRAC's STR paper reporting form can be printed from the reporting forms webpage or you can request a form to be faxed or mailed to you by calling FINTRAC at 1-866-346-8722.

To ensure that the information provided is legible and to facilitate data entry, it would be preferable if the free-text areas of the STR (Parts G and H) were completed using word-processing equipment. For reports completed by hand, please use black ink and CAPITAL LETTERS.

There are two ways you can send a completed paper STR form to FINTRAC:

There is no official acknowledgement of receipt when you send a completed paper STR form to FINTRAC. However, FINTRAC will contact you and request that you resubmit electronically if you have the capability to do so.

4. Review and validation of reports by FINTRAC

FINTRAC reviews each report that is submitted to ensure that mandatory information is provided as per the PCMLTFA and associated Regulations. There are three types of validation rules that FINTRAC uses to validate reports and these rules are described below.

FINTRAC validation rules identify possible reporting problems or information gaps but do not cover all scenarios. While FINTRAC conducts a review of report submissions to assess the quality of reports, you should have your own proactive quality assurance practices independent of FINTRAC's review and validation of reports.

The report validation processes for FINTRAC web reporting and Batch are different. Each report validation process is described in more detail below.

FINTRAC web reporting report validation

Reports submitted through FINTRAC web reporting are immediately validated by the application. FINTRAC web reporting will indicate where information is missing, incorrect, or improperly formatted. You must correct all errors for mandatory fields before you can submit a report.

Batch report validation

Once a Batch file has been submitted, FINTRAC validates the Batch file against the validation rules. If there is an error with the structure or format of the file then you will receive a "Rejected" message and the Batch file and reports within it will not be processed any further. You must correct and resubmit the entire Batch file. Once you resubmit a Batch file, it is revalidated against all validation rules.

If there is a potential issue in a reporting field then you may also receive a "Warning" message. If you receive a "Warning" message, the report has been accepted by FINTRAC but you should review the information submitted for accuracy and completeness.

Once your Batch file has been accepted and validated, FINTRAC will send you a Batch "Acknowledgement" message that will include the validation rule number(s) for any report(s) that require further action and any warning messages.

See FINTRAC's Standard Batch Reporting Instructions and Specifications for more information.

5. Completing the STR form

FINTRAC's expectations for completing an STR

It is your responsibility to ensure that the information provided in an STR is complete and accurate. Your compliance policies and procedures must include details on the process for how you identify, assess and submit STRs to FINTRAC. It is possible that your organization has an automated or triggering system that detects unusual or suspicious transactions that would require assessment by a person to determine if you must submit an STR. A person with the appropriate knowledge and training is expected to be able to determine whether a transaction is related to the commission of an ML/TF offence. It is also important to note that the value of the transaction is not always the most important aspect of an STR. Training employees to perform this function is considered to be part of your compliance program obligations.

Please note, an employee of a reporting entity can report a suspicious transaction to FINTRAC when:

This stipulation is in place to cover the rare instances where an employee suspects that the threshold to report has been reached and their employer did not or will not send an STR. No person or entity will be prosecuted for sending an STR in good faith or for providing FINTRAC with information about suspicions of money laundering or terrorist financingFootnote 2. To submit an STR in this scenario, you may use the paper report form. For more information, please see field completion instructions to submit STRs by paper.

It is important to FINTRAC's analysis process and disclosure recipients that the STRs you submit are comprehensive and of high quality. In Part G or H of the STR, it is important to avoid jargon or non-public references, such as terms and acronyms that are specific to your organization. Please consider an outside reader and use simple, clear and concise language.

A variety of information is often collected as part of an assessment to determine if you are required to submit an STR and this information is valuable to include in your report to FINTRAC. A well-completed STR should consider the following questions.

  1. Who are the parties to the transaction?
    • List the conductor, beneficiary and holders of all accounts involved in the transaction.
    • Take reasonable measures to verify the identity of the conductor of the transaction.Footnote 3 This means that you are expected to ask the client for this information unless you think doing so will tip them off to your suspicion.Footnote 4
    • Provide identifying information on the parties involved in the transaction. This could include the information you recorded to identify the conductor, as well as any information you have on the other parties to the transaction or its recipients.
    • List owners, directors, officers and those with signing authority, when possible. If the transaction involves an entity, you could include information on the ownership, control and structure of the business in the STR.
    • Provide clear information about each person or entity's role in each of the financial transactions described. It is important to know who is sending and receiving the funds and this may be relevant in Part G of the STR.
    • Explain the relationships among the persons or entities (if known). This is very helpful to FINTRAC when trying to establish networks of persons or entities suspected of being involved in the commission or attempted commission of an ML/TF offence.
  2. When was the transaction completed/attempted? If it was not completed, why not?
    • Provide the facts, context and ML/TF indicators regarding the transaction.
  3. What are the financial instruments or mechanisms used to conduct the transaction?
  4. Where did this transaction take place?
  5. Why are the transaction(s) or attempted transaction(s) are related to the commission or attempted commission of an ML/TF offence?
    • State the ML/TF indicators used to support your suspicion.
    • State the suspected criminal offence related to ML/TF, if known.
  6. How did the transaction take place?

Once you have reached RGS, you must keep reporting as long as the suspicion remains. You are expected to periodically re-assess the client to verify that the level of suspicion has not changed. This process may be part of your documented risk assessment or ongoing monitoring. If you continue to report STRs on the same person or entity, you can reference a previous STR in Part G by:

If you are reporting STRs because the assessment has changed due to new facts, context and/or ML/TF indicators, you are expected to provide them. For example, through the course of your assessment, you may have identified new ML/TF indicators or new parties transacting with your client. You may choose to include that information under a separate heading in Part G so that it is properly labeled as new information.

You must keep a copy of all STRs submitted to FINTRAC for a period of at least five years after the day the report is sent.Footnote 5 For more information on your record keeping obligations related to STRs, see your sector specific record keeping guidance.

You are not allowed to inform anyone, including the client, of the contents of an STR, or that you have made or will make such a report, if the intent is to prejudice a criminal investigation. This applies whether such an investigation has begun or not.Footnote 6 It is important to not tip off your client about the fact that you are making a suspicious transaction report. Therefore, you should not be requesting information that you would not normally request during a transaction.

STR submission limitations

Each STR must include at least one transaction and may include up to 99 transactions as long as all the transactions:

For example, someone brings a money order for $6,000 CAD and successfully sends an electronic funds transfer for $6,000 CAD (first completed transaction). Later that day, the same person returns to the same location and brings $5,000 CAD cash and receives a money order (second completed transaction). In this case, if there are reasonable grounds to suspect that the two completed transactions, conducted at the same location, are related to the commission or attempted commission of an ML/TF offence, you should provide the transaction details for the two transactions in the same STR. While the transactions may be referenced in Part G as part of the facts, context and/or ML/TF indicators, the transaction details themselves must be entered in Parts B1 through F.

In a situation where related suspicious transactions took place at different locations, an STR must be submitted for each location and only detail the transactions that occurred at that specific location. In addition, all transactions should have the same status as either completed or attempted to be included in a single report.

If you have more than 99 transactions to report at one time, you must submit the additional transaction(s) in a separate STR. You cannot insert a spreadsheet or include the additional transactions in Part G of the STR. If the information is available, you can reference related STRs in Part G by entering the FINTRAC STR number and date of submission.

Common STR deficiencies to avoid

The following are examples of deficiencies that FINTRAC has identified through its assessments and other compliance activities. FINTRAC is sharing these examples to illustrate common errors that you can avoid.

6. Field completion instructions

**Note: Unless otherwise stated, this section details specific instructions that apply to both electronic and paper reporting.

Parts of a suspicious transaction report

STRs contain eight specific parts:

Standardized field instructions

This section includes standardized instructions for the level of effort that is required for certain fields as well as standard instructions for completing fields for identification, addresses, telephone numbers and occupation.

  1. Each field within an STR is categorized as either mandatory, mandatory if applicable, or reasonable measures.
    1. Mandatory:
      • Mandatory fields require you to obtain the information to complete the STR and will be marked with an asterisk (*).
      • However, in the case of an attempted transaction, you are to take reasonable measures to obtain the information for any mandatory field.
    2. Mandatory, if applicable:
      • Mandatory if applicable fields must be completed if they are applicable to you or the transaction being reported. If applicable, you must provide the information if you obtained it at the time of the transaction, or if it is contained within your institution.
      • These fields will be indicated with both an asterisk (*) and "(if applicable)" next to them.
    3. Reasonable measures:
      • For all other fields that do not have an asterisk, you must take reasonable measures to obtain the information.
      • Reasonable measures can include asking for the information as long as you don't think it will tip off the person that you are submitting an STR.
      • Reasonable measures also means that you must provide the information if you obtained it, or if it is contained within your institution.

      **Note: In certain circumstances a required report field may not be applicable. Do not enter "N/A" or "n/a" or substitute any other abbreviations, special characters (e.g., "x", "-" or "*") or words (e.g., unknown) in these fields. They are to be left blank.

  2. Client identification

    If you used the dual process method to identify a person, you only need to provide the details of one of the identifiers. You can use your judgement to determine which identifier would be most advantageous to FINTRAC analysis. Please note that a Social Insurance Number (SIN) must not be reported to FINTRAC.

    The record keeping requirement for the dual process method includes the source of the information, so FINTRAC expects the issuing jurisdiction and country to align with the source of the information, but would only expect, as per the validation rules, that the reporting entity include the country of issue for the dual process method.

    In addition, you cannot use a provincial health card for identification purposes where it is prohibited by provincial legislation.

    For more information on how to identify persons and examples of acceptable photo identification documents, refer to FINTRAC's guidance on Methods to verify the identity of persons and entities.

  3. On behalf of indicator

    Applies to Part B2 of an STR.

    You are required to take reasonable measures to determine if there is another person or entity instructing your client to conduct an activity or a transaction. Reasonable measures include asking your client if they are acting on someone else's instructions or retrieving the information that may already be contained in your records.

    When determining whether an individual has conducted or attempted a suspicious transaction on anyone else's behalf, it is not about who owns or benefits from the money, or who is carrying out the transaction or activity, but rather about who gives the instructions to handle the money or conduct the transaction or particular activity.

    If you determine that a third party was instructing your client, then you must indicate if the transaction was conducted on behalf of an entity or on behalf of another person.

    If there is no third party, or you were not able to determine whether there is a third party, then indicate that this part is not applicable.

  4. Address fields

    Applies to the following fields of an STR:

    • A3* – A6* (mandatory)
    • D5 – D9
    • D20 – D24
    • E3 – E7
    • F4 – F8
    • F19 – F23

    The complete physical address includes the street number, street name, the city, province, and country. If there is no province or state applicable to the address, leave this field blank.

    Please note that the following are not valid addresses and should not be provided:

    • a post office box without a complete physical address (e.g., PO Box 333);
    • a general delivery address; or
    • only a suite number (e.g., Suite 256) without additional address information.

    It is possible that some of the examples above may be included in Part G of the STR because they are relevant but they are not considered a valid address in terms of the client identification.

    In cases where the person or entity resides in an area where there is no street address, provide a detailed description which clearly describes the physical location. For example, in these unique cases you could enter "the third house to the right after the community center" as the street address where an person lives.

    A legal land description can be acceptable so long as the legal land description is specific enough to pinpoint the physical location of where the client lives. If the legal land description refers to an area or a parcel of land on which multiple properties are located, the legal land description would not be sufficient.

    For persons who are transient (e.g., travelling in a recreational vehicle, temporarily working in a camp, etc.) and have no fixed address, you are required to provide the following:

    • for Canadian residents, their permanent address is required, even if that is not where they are currently residing;
    • for non-Canadian residents travelling in Canada for a short period of time, their foreign residential address is required; and
    • for non-Canadian residents living in Canada for a longer period of time (e.g., a student), then the person's temporary Canadian address should be provided.
  5. Telephone number fields

    Applies to the following fields of an STR:

    • A10* – A10A
    • D11
    • D18 – D18A
    • D25 – D25A
    • E8 – E8A
    • F9
    • F10 – F10A
    • F24 – F24A

    If the telephone number is from Canada or the United States, enter the area code and local number (e.g., 999-999-9999).

    If the telephone number is from outside Canada or the United States, enter the country code, city code and local number using a dash (-) to separate each one. For example,'99-999-9999-9999' would indicate a two-digit country code, a three-digit city code and an eight digit local number.

  6. Occupation fields

    Applies to the following fields of an STR:

    • D17
    • F17

    When entering a person's occupation information, you must be as descriptive as possible. For example:

    • If the person is a manager, the occupation provided should reflect the area of management, such as "hotel reservations manager" or "retail clothing store manager."
    • If the person is a consultant, the occupation provided should reflect the type of consulting, such as "IT consultant" or "forestry consultant".
    • If the person is a professional, the occupation provided should reflect the type of profession, such as "petroleum engineer" or "family physician".
    • If the person is a labourer, the occupation provided should reflect the type of labour performed, such as "road construction worker" or "landscape labourer".
    • If the person is not working, the occupation provided should still be as descriptive as possible, such as "student", "unemployed" or "retired".

Details and history

Published: June 2021

For assistance

If you have questions about this guidance, please contact FINTRAC by email at guidelines-lignesdirectrices@fintrac-canafe.gc.ca.

Date Modified: