Video – FINTRAC: An introduction for reporting entities
This presentation is designed to provide an introduction to the Financial Transactions and Reports Analysis Centre of Canada.
Video
Video length: 36:40 minutes
Catalogue number: FD4-47/2025E-MP4
ISBN: 978-0-660-77104-5
Descriptive transcript of the video “Video – FINTRAC: An introduction for reporting entities”
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[Start of video] Welcome to the webinar “FINTRAC: An Introduction for reporting entities”. This presentation is designed to provide an introduction to the Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC. We will discuss your role as a reporting entity under Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime. |
Text on screen: FINTRAC: An introduction for reporting entities |
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This presentation covers several key topics: Definitions of key concepts, including money laundering, terrorist financing, and sanctions evasion. How FINTRAC ensures compliance and our supervisory approach. Your obligations as reporting entities under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, or the Act. Enforcement activities used to encourage compliance. And finally, key takeaways on your role in Canada’s Anti-Money Laundering and Anti-Terrorism Financing Regime. |
Text on screen: Agenda
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FINTRAC serves as Canada’s financial intelligence unit and regulator under the Act. Our mandate includes:
FINTRAC ensures the compliance of reporting entities (or businesses subject to the Act) and generate actionable financial intelligence for law enforcement and national security agencies. FINTRAC acts independently from the police services, law enforcement agencies and other entities to which it discloses financial intelligence, while ensuring the protection of personal information under its control. FINTRAC is headquartered in Ottawa, with regional offices located in Montreal, Toronto, and Vancouver. It reports to the Minister of Finance, who is in turn accountable to Parliament for the activities of the Centre. |
Text on screen: FINTRAC’s mandate To ensure the compliance of businesses subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated Regulations, and to generate actionable financial intelligence for police, law enforcement and national security agencies to assist in the investigation of money laundering and terrorist activity financing offences or threats to the security of Canada. |
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What is money laundering? Money laundering disguises the source of money or assets derived from criminal activity. It is the process of taking money gained through illegal activities and making it appear legitimate. Criminals use a variety of methods to do this, such as purchasing property, moving funds through multiple accounts, or using businesses to disguise the origin of their money. While often linked to drug trafficking, it also involves crimes like fraud, corruption, and human trafficking. The ultimate goal of money laundering is financial gain. There are three stages:
The money laundering process is continuous, with illicit funds constantly being introduced into the financial system. It can often be difficult to detect without having appropriate controls in place. |
Text on screen: Money laundering
Money laundering is the process used to disguise the source of money or assets derived from criminal activity. |
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Terrorist financing, on the other hand, is the use of funds, property, or other services to encourage, plan, assist, or engage in acts of terrorism. Unlike money laundering, the goal of terrorist financing is not financial gain. Instead, it is to fund or facilitate terrorist activities. There are two main differences that distinguish terrorist activity financing from money laundering.
First, the source of funds. While money laundering typically involves funds from illegal activities, terrorist financing can involve funds from legitimate sources, such as donations or personal savings.
Second, while the end goal for money laundering is to make illicit funds appear legitimate for personal gain, for terrorist financing, money is the means to an end, the goal is to use the funds to carry out terrorist activities. |
Text on screen: Terrorist activity financing Terrorist financing is the use of funds, property or other services to encourage, plan, assist, or engage in acts of terrorism, where the primary motivation is not financial gain. |
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Let’s talk about sanctions evasion, an important area of focus in Canada’s efforts to combat financial crime. Sanctions evasion occurs when someone violates restrictions set by Canadian laws, such as the United Nations Act, the Special Economic Measures Act, or the Justice for Victims of Corrupt Foreign Officials Act. For example, giving money or conducting business to help someone who is under sanctions would be considered a sanctions evasion offence. Like many countries, Canada imposes sanctions on specific countries, individuals, and organizations. These sanctions restrict or prohibit certain trade, financial transactions, or other economic activities between Canadians—or persons in Canada—and the targeted entities. Sanctions are a critical tool in Canada’s foreign policy. They help maintain and restore international peace and security, combat corruption, and promote respect for human rights. As reporting entities, it’s important to be vigilant for signs of sanctions evasion. By identifying and reporting suspicious activities, you help Canada enforce its sanctions laws and uphold its commitments to global security and justice. |
Text on screen: Sanctions evasion offence A sanctions evasion offence means an offence arising from the contravention of a restriction or prohibition established by an order or regulation made under the United Nations Act, the Special Economic Measures Act, or the Justice for Victims of Corrupt Foreign Officials Act. |
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Global Affairs Canada is responsible for the administration of Canada’s sanctions under the United Nations Act, the Special Economic Measures Act, and the Justice for Victims of Corrupt Foreign Officials Act.
The RCMP and the Canada Border Services Agency enforce these statutes and associated regulations.
FINTRAC supports and ensures compliance with reporting requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated regulations which includes reporting on sanctions evasion and, since March 2, 2025, sanctioned property. FINTRAC also develops strategic intelligence products and discloses financial intelligence in support of law enforcement and the implementation of Canada’s sanctions regime. |
Text on screen: Sanctions regime partners Global affairs Canada
RCMP and CBSA
FINTRAC
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We work with businesses to ensure they comply with the law. This includes issuing guidance to help you develop compliance programs, verify client identities, maintain records, and submit required reports. Our Supervision team provides guidance, conducts assessments, and promotes awareness to help businesses meet their obligations. We also maintain a public registry of money services businesses operating in Canada. FINTRAC receives and analyzes financial transaction reports to uncover patterns and identify potential criminal activity. FINTRAC can disclose financial intelligence when appropriate thresholds are met. These include law enforcement at all levels, Canada’s security and border agencies, tax authorities, and securities regulators. We also conduct research into financial intelligence and create strategic products that highlight trends, patterns, and vulnerabilities related to money laundering, terrorist financing, sanctions evasion and other threats to the security of Canada. The safeguarding of personal information is critical to FINTRAC and clear principles for the protection of privacy are set out in its governing legislation, including strict limitations on the information that can be received and disclosed, clear requirements for maintaining and disposing of records, and a biennial audit of FINTRAC's protection of information by the Office of the Privacy Commissioner. These principles are reinforced by the Centre's own operational policies and security measures. FINTRAC plays a vital role in protecting Canada’s financial system while balancing the need for privacy and security. Together, with your partnership as reporting entities, we can make a significant impact in the fight against financial crime. |
Text on screen: FINTRAC’s roles and responsibilities
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It is important to note that FINTRAC does not lead or start an investigation. That is the role of law enforcement. FINTRAC’s role as a financial intelligence unit and federal regulator does not include freezing accounts, track transactions in real time, direct reporting entities to submit specific reports. |
Text on screen: FINTRAC does not FINTRAC does not…
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We are pleased to share an overview of FINTRAC's Supervisory framework which reflects our ongoing efforts to modernize and strengthen our approach to combatting money laundering, terrorist financing, and sanctions evasion. The Supervisory framework is a comprehensive guide that aligns FINTRAC’s supervisory activities with its mandate. Our framework is dynamic and adaptable, designed to respond to the rapid changes of the digital age. It is built on three core components: Guiding principles, the Risk framework and strategic plan, and the Pillars of supervision. Our supervisory culture is shaped by four guiding principles:
The Supervisory framework is operationalized through three interconnected pillars:
While we remain committed to supporting compliance, we are taking a firm stance on non-compliance. Serious or repeated deficiencies will lead to consequences, with enforcement decisions guided by factors such as compliance history, corrective actions, and harm caused. The Risk framework and Supervisory framework are deeply interconnected. By embedding risk management into all supervisory activities, we ensure that our resources are focused where they are needed most. This integration allows us to identify and address risks early, allocate resources efficiently, maintain alignment with international standards and best practices, commitment to continuous improvement. FINTRAC recognizes that the financial ecosystem is constantly evolving. The Supervisory framework is dynamic and will continue to adapt to emerging risks, new technologies, and changes in the regulatory landscape. The Risk framework is a cornerstone of FINTRAC’s approach, providing a structured methodology to assess and mitigate risks. Together with the Supervisory framework, it ensures that our activities are proactive, efficient, and aligned with our strategic priorities. Key elements include:
FINTRAC’s Risk framework and Supervisory framework is designed to address today’s challenges while preparing for the future. We are committed to working with you to strengthen Canada’s defences against financial crime. |
Text on screen: FINTRAC’s supervisory framework Guiding principles
Supervision pillars
Risk framework
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The National risk assessment is a comprehensive review of the most pressing money laundering and terrorist financing threats and vulnerabilities in Canada. It supports private sector businesses and non-governmental organizations to apply focused and proportionate measures to mitigate risks. As part of reporting entities’ compliance program requirements under the Act and associated Regulations, reporting entities must conduct a risk assessment of their money laundering and terrorist financing risks. FINTRAC expects that all reporting entities incorporate the national risk assessment into their own risk practices by using it as a foundational input to identify and understand inherent money laundering and terrorist financing risks relevant to their sector and operations. You must also align your internal risk assessments with the findings to prioritize and tailor your due diligence, monitoring, and reporting measures accordingly. This includes focusing enhanced scrutiny on high-risk areas highlighted by the National risk assessment and ensuring that ongoing updates to their risk assessments reflect changes in the national risk landscape. This approach will support effective resource allocation and regulatory compliance under the Act. FINTRAC encourages all reporting entities to consult the risk assessment guidance and related tools, noting that FINTRAC does not prescribe how a risk assessment should be conducted. |
Text on screen: National risk assessment Purpose:
Outcomes:
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Criminals, including money launderers and terrorist financiers, can be attracted to Canada as a result of inherent vulnerabilities associated with Canada’s geography, demographics, stable open economy, accessible financial system and well-developed international trading system. The scale of your operations, and the cash-intensive nature of your clientele, allow for you to be used in obscuring the origin of funds and provide anonymity for your clientele. Money laundering, terrorist financing, and sanctions evasion present significant challenges across industries, as criminals continuously exploit vulnerabilities through complex transactions, cash-intensive businesses, and third-party relationships. As a reporting entity, your role is vital in mitigating these risks. By implementing strong compliance measures, conducting thorough risk assessments, and submitting accurate and timely suspicious transaction reports (STRs), you help protect Canada’s financial system and disrupt criminal networks. This shared responsibility is not just a legal obligation—it is a collective effort to safeguard the integrity of our economy and protect Canadians from the harms of financial crime. Being compliant provides important measures for detecting and deterring criminals and terrorists from operating within Canada. |
Text on screen: Your role in the fight against illicit financing Detection: Deterrence: |
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FINTRAC regulates and supervises specific business sectors, known as reporting entities. These sectors include financial institutions, securities dealers, real estate brokers, casinos, and more. The following slides outlines key compliance obligations that apply to reporting entities. |
Text on screen: Who must comply: regulated businesses Business sectors
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As a reporting entity, you have legal obligations under the Act and associated Regulations. These include:
There are other requirements under each of these primary obligations that are specific to each sector. The next few slides cover a summary of a few of the key compliance requirements. |
Text on screen: Overview of compliance obligations
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All reporting entities must have a compliance program comprised of the following elements: A Compliance officer who is responsible for implementing and overseeing the compliance program. They should be in a position of authority, have sufficient knowledge of the business, and understand its money laundering, terrorist financing and sanctions evasion risks. As a best practice, the compliance officer should not be involved in the receipt, transfer or payment of funds. Your business’ compliance policies and procedures help guide the decisions and actions of your business to meet its legal requirements. Your policies and procedures should be documented, tailored to your business, and kept up to date. You must assess and document the risks your business faces. This includes analyzing your clients, products, geographic locations, and delivery methods and how they may be vulnerable to money laundering, terrorist financing or sanctions evasion. Your business must also have a compliance training program and a plan in place for its employees. Your employees must be trained on compliance obligations, tailored to their roles. For example, front-line staff may need training on identifying suspicious transactions. Your training plan should identify those who are receiving the training, topics covered, the delivery method and training frequency. The training you deliver should also be documented. If you’re a sole proprietor with no employees, you’re not required to have a training program. Every two years, you must review the effectiveness of your compliance program to ensure it meets current regulatory requirements. This review can be conducted internally or by an external auditor, and findings should be documented along with any corrective measures taken to rectify deficiencies. |
Text on screen: 1. Compliance program
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Risk assessments are often overlooked, but they are a critical part of your compliance program. A thorough risk assessment helps you understand the money laundering and terrorist financing risks your business faces and implement controls to mitigate those risks. When developing or updating your risk assessment, you must consider and review Canada’s National Risk Assessment: it provides a comprehensive analysis of money laundering and terrorist financing risks in Canada by identifying key sectors and products vulnerable to these threats. By consulting the National Risk Assessment, businesses subject to the Act can gain a deeper understanding of these risks, focus their resources on vulnerable areas, implement effective strategies or controls to mitigate those risks, and ensure the integrity of their operations and reputation. |
Text on screen: What is risk? RISK Inherent Vulnerabilities: Properties of a sector, service, customer base, delivery channel, jurisdiction, etc. Consequences: Societal, economic, or governmental harm done |
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You must address the following 5 factors in your risk assessment: Your clients and business relationships, including their activity patterns and geographic locations. For example, who are your clients? Do you serve a specific category of clients? Do any of your clients have a connection to a country that has weak money laundering and terrorist financing controls? Your products, services and delivery channels. Do you offer brokering, lending and administrative services or do you just offer one type of service? Do you meet your clients in person or virtually? Do you use agents? The geographic locations where you conduct your activities. Do you have a single office in a small town, or do you have multiple offices in major cities across Canada? New developments or technologies. Are you using new technologies like facial recognition software for identification purposes or to auto-approve applications? If so, what is the risk level compared to meeting the client in person? Any other relevant factors affecting your business. This can be anything else that might affect your risk level such as employee turnover or other industry rules and regulations that you follow. You must assess each factor and provide a risk rating such as high, medium or low. Regardless of the level you determine, you need to have written rationale that supports the risk level for the 5 prescribed factors. |
Text on screen: Risk assessment Risk assessment factors
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Verifying the identity of clients is a cornerstone of compliance. It removes the anonymity behind financial transactions, helps you to know your clients; and to understand and assess any risks that may be associated to their transactions or activities. There are five methods you can use to verify the identity of a person:
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Text on screen: 2. Know your client: verifying the identity of a person There are five methods you can use to verify the identity of a person.
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When it comes to verifying the identify of an entity, there are three methods:
Each of these methods to verify the identity of persons or entities are explained in greater detail in our guidance on our website. Depending on what sector you belong to, there will be different triggering situations for when you need to verify the identity of a person or entity. |
Text on screen: Know your client: verifying the identity of an Entity There are three methods you can use to verify the identity of an entity
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In addition to verifying identity, you also have other requirements relating to knowing your client: Third party determination means taking reasonable measures to determine whether a third party is involved in a transaction. You must Identify individuals who own or control 25% or more of a corporation or trust. This is critical because criminals often conceal beneficial ownership to obscure illicit activity. Business relationships mean establishing when a business relationship begins and monitoring client activities over time. Business relationship criteria varies by sector and depends on the activities and transactions that a client conducts with you. Ongoing monitoring is a process you must implement to review all the information and activities of your business relationships, in order to:
Depending on your sector, you have certain requirements relating to the identification of domestic and foreign Politically Exposed Persons, Heads of International Organizations, and their family members and close associates. The access, influence and control that they have can make them vulnerable to corruption and be the potential targets of criminals who could exploit their status and use them--knowingly or unknowingly—to carry out money laundering or terrorist activity financing, or sanctions evasion offences. |
Text on screen: Know your client: additional requirements
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Financial transaction reports are critical to FINTRAC’s ability to develop actionable financial intelligence that supports law enforcement and national security investigations. All reporting entities must submit the following transaction reports when they meet certain criteria:
You must submit a Listed Person and Entity Property Report if you are in possession or control of property owned or controlled by a listed person or entity under the Criminal Code, the United Nations Act, or other sanctions legislation. Examples of property include:
These reports must also be disclosed to the RCMP and CSIS. Large cash transaction reports or LCTRs must be submitted:
This 24-hour rule applies if two or more cash transactions total $10,000 or more within 24 hours and involve the same person, entity, or beneficiary. Similar to Large Cash Transaction Reports, large virtual currency transaction reports or LVCTRs must be submitted to FINTRAC when you receive virtual currency in an amount equivalent to $10,000 CAD or more, in a single transaction, or accordance with the 24-hour rule Financial entities, casinos, and money services businesses, must also submit electronic fund transfer reports or EFTRs to FINTRAC when:
Casino disbursement reports or CDRs:
For detailed guidance on reporting requirements, visit FINTRAC’s website. |
Text on screen: 3. Reporting to FINTRAC
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Record-keeping is essential for compliance. It ensures you can submit timely and complete reports and provide information to FINTRAC during examinations or investigations. You must keep records of:
Records must be accessible and provided to FINTRAC within 30 days if requested. Sector-specific record-keeping requirements may apply. For example, real estate brokers may need to keep records of unrepresented party transactions. To learn more about sector-specific record keeping requirements, please review the record keeping guidance applicable to your sector on our website. |
Text on screen: 4. Record keeping requirements Every reporting entity must keep specific records according to the Act and associated Regulations Records may include:
Note: Please ensure you are aware of all the types of records that your reporting entity sector must keep. |
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If you are a money services business (MSB) or a foreign money services business (FMSB), you must register with FINTRAC before operating in Canada. Let’s break down the key steps:
Keep your registration updated:
Renew your registration:
Cancel your registration:
For more information, visit the MSB section of our website. |
Text on screen: 5. Registering with FINTRAC REGISTER: RESPOND: UPDATE: RENEW: CANCEL: |
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The Minister of Finance may issue directives that contain countermeasures or restrictions for businesses when they engage in transactions with certain foreign jurisdictions. These authorities allow the Minister of Finance to take steps to protect Canada’s financial system from foreign jurisdictions and foreign entities that are considered to present high risks for facilitating money laundering and terrorist financing. FINTRAC monitors and assesses compliance with these directives, and failure to comply with a directive could result in a penalty. FINTRAC has published guidance related to the Ministerial Directive on financial transactions associated with Russia (issued on February 24, 2024), the Islamic Republic of Iran (issued on July 25, 2020) and the Ministerial Directive on the Democratic People’s Republic of Korea issued on (December 9, 2017). For more information, please refer to the guidance on our website. |
Text on screen: 6. Ministerial directives
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The success of Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime depends on the concrete application of the regulatory measures we discussed above. In the normal course of our compliance activities, we identify instances of non-compliance with the Act and associated Regulations. We assess the severity of each non-compliance issue by understanding both the extent and the root cause of the non-compliance. Each non-compliance issue is assessed for its adverse impact on FINTRAC's mandate and on the achievement of the objectives of the Act. Following the completion of an assessment activity, and depending on the extent of the non-compliance identified, FINTRAC may decide:
FINTRAC may issue an administrative monetary penalty and serve a notice of violation when it has reasonable grounds to believe that a reporting entity has violated a requirement of the Act and associated Regulations. Administrative monetary penalties (AMPs) are fines issued by FINTRAC. They may be issued in cases of serious or repeated non-compliance. We consider the penalty to be effective when the amount is both proportional to the harm done and prompts a change in behaviour toward future compliance. These amounts keep into consideration the type and extent of the violations, the harm done, and the circumstances of each case. Non-compliance disclosures are disclosed to law enforcement in cases of extensive non-compliance when FINTRAC suspects on reasonable grounds that the information would be relevant to investigating or prosecuting non-compliance offences under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. |
Text on screen: Enforcement activities Administrative monetary penalty:
Non-compliance disclosure:
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The purpose of FINTRAC's administrative monetary penalties program is to encourage future compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated Regulations, and to promote a change in behaviour. The administrative monetary penalties program supports FINTRAC's mandate by providing a measured and proportionate response to particular instances of non-compliance. FINTRAC is committed to working with reporting entities to help them achieve compliance. The process involves:
AMPs are designed to be proportional, encourage compliance, and deter future violations. |
Text on screen: Supervision – Enforcement: administrative monetary penalty
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As reporting entities, you are the frontline defense against money laundering, terrorist financing, and sanctions evasion and help protect Canada’s financial system and national security. By identifying and reporting suspicious activities, you provide valuable information that helps law enforcement and national security agencies protect Canadians. It’s essential to stay informed about emerging risks and vulnerabilities in your sector. Criminals constantly adapt their methods to exploit businesses for money laundering, terrorist financing, and sanctions evasion. At FINTRAC, we support reporting entities in meeting their compliance obligations by providing:
Combating money laundering and terrorist financing requires a shared commitment from all stakeholders—across sectors, both domestic and international. By working together with reporting entities, law enforcement, and other organizations, we can better identify threats, uncover financial connections, and provide actionable intelligence to advance investigations. |
Text on screen: Your role in Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime
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Thank you for your attention and for your commitment to protecting Canada’s financial system. Your role as reporting entities is vital to the success of Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime. We encourage you to stay informed by visiting FINTRAC’s website regularly for updates and guidance. If you have any questions, please don’t hesitate to reach out to us at guidelines-lignesdirectrices@fintrac-canafe.gc.ca. [End of video] |
Text on screen: Thank you! Please visit our website for more guidance: Please send your questions to: |
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