Our Activities

Financial intelligence is the essence of FINTRAC's business. Our activities, as a result, are best described in relation to the information we receive and what we do with it.

FINTRAC receives financial and other information which it is under an obligation to protect from unauthorized disclosure. It analyzes this information with a view to detecting money laundering, terrorist financing activities and threats to the security of Canada. On the basis of its analysis, the Centre generates financial intelligence that it will, when appropriate, disclose to law enforcement and intelligence agencies in order to assist in the investigation and/or prosecution of money laundering and terrorist financing offences, as well as threats to the security of Canada. Further, the Centre ensures compliance with the record keeping, client identification and reporting requirements of the Act and regulations, and is charged with enhancing public awareness and understanding of matters related to money laundering and terrorist financing.

 
Receipt of Financial and Other Information

The Proceeds of Crime (Money Laundering ) and Terrorist Financing Act authorizes FINTRAC to receive and collect a wide range of information from various institutions and individuals known as reporting entities. FINTRAC will also receive reports on the cross-border movement of currency and monetary instruments from the Canada Customs and Revenue Agency (CCRA). Regulations in force during the period covered by this report required mandatory reporting of suspicious transactions related to money laundering by all reporting entities.¹   

As well, FINTRAC has legislative authority to: receive information provided voluntarily by law enforcement, intelligence agencies, foreign financial intelligence units and the general public; make use of publicly available information, including commercial databases; and, may enter into agreements to access databases maintained by federal or provincial governments for purposes related to law enforcement.

 
Analysis of Information

The linkage of financial transactions and other information with suspected criminal activity is the critical focus of FINTRAC's analysis. The Centre is mandated to conduct an independent analysis of its information holdings to detect money laundering, terrorist financing activities and threats to the security of Canada. The information analyzed includes the financial information the Centre receives from reporting entities and CCRA, information provided by the police and other domestic and international government departments and agencies, as well as information available on public or commercially-available databases. In its analysis, FINTRAC combines the skills of trained analysts with the use of specially-designed technological tools.

The electronic receipt of financial transaction information from reporting entities provides FINTRAC with some key advantages in its analytical operations. First, information is readily available for analysts without any delay for manual inputting. Second, business rules and sophisticated analyical systems sort through the large quantities of data to identify links and patterns that assist FINTRAC's analysts in their work.

This technology helps FINTRAC's analysts to detect potential cases of money laundering or terrorist financing. Analysts subject potentially suspicious patterns of transactions to further analysis and tests prior to making a recommendation as to whether information should be disclosed in accordance with the legislation. Our analysts apply internationally recognized indicators of money laundering and terrorist activity financing to their analysis.

 
Disclosure of Financial Intelligence

FINTRAC must disclose designated information to the appropriate police force when it has reasonable grounds to suspect that the information would be relevant to the investigation or prosecution of a money laundering offence or a terrorist activity financing offence. Once this initial test has been met, designated information must also be provided to the Canada Customs and Revenue Agency, if FINTRAC determines that the information is relevant to an offence of evading or attempting to evade federal taxes or duties, and to Citizenship and Immigration Canada, when such information is relevant to certain Immigration Act offences.

The Centre is required to disclose to the Canadian Security Intelligence Service (CSIS) when it has reasonable grounds to suspect the information would be relevant to a threat to the security of Canada.

FINTRAC may also disclose designated information to foreign financial intelligence units with which Canada has agreements authorizing it to do so.

In its disclosures, FINTRAC provides information that identifies the person(s) involved in the transaction(s), where and when the transaction(s) took place, and certain other details about the transaction(s).

The disclosure of this information provides valuable intelligence about money laundering, terrorist financing activity and threats to the security of Canada. To obtain information additional to the designated information, including the analysis conducted by FINTRAC, the police must obtain a court order directing further disclosure by the Centre. CSIS also has the ability to seek a court order to obtain additional information from FINTRAC when it is relevant to a threat to the security of Canada.

 
Protection of Information

FINTRAC has the mandate to receive personal financial information on individuals and to ensure that such information is protected from unauthorized disclosure. In addition to the provisions of the Act that set out to whom and under what circumstances FINTRAC may disclose designated information, the legislation also provides penalties for unauthorized use and disclosure.

 
Ensuring Compliance

FINTRAC is responsible for ensuring that reporting entities comply with their reporting, record keeping and client identification obligations as set out in the Act and regulations.

FINTRAC favours a cooperative approach to compliance and encourages entities to comply with their obligations voluntarily. This means working with them in a constructive manner to ensure that they understand their obligations under the law and to provide assistance to support their compliance. In cases where this cooperative approach fails to result in improved compliance or where there is willful non-compliance, FINTRAC may refer such cases to law enforcement.

Cooperation with federal and provincial regulators is instrumental to the Centre's compliance strategy. The sharing of information with regulators is important because it will eliminate information gaps and minimize regulatory overlap.

 
Enhancing Public Awareness

FINTRAC's mandate includes enhancing public awareness and understanding of matters relating to money laundering and terrorist financing. The Centre's early activities in this regard included the development and implementation of a number of outreach strategies and promotional material, as well as the creation and maintenance of a public Web site (www.fintrac-canafe.gc.ca) and a toll-free number at 1-866-346-8722 where Canadians can get information and answers to their questions.

 
Other Activities

Other important activities are undertaken by the various sections of the Centre to facilitate day-to-day operations and the delivery of its mandate. These include Policy, Planning and Public Affairs, which is responsible for coordinating international activities, strategic planning, internal and external communications, and the development of operating policies and procedures. Liaison coordinates outreach activities, develops and maintains relationships with important stakeholder groups, receives voluntary information and delivers disclosures. Information Technology develops and operates information technology systems to support and advance the Centre's objectives. Corporate Management provides a number of internal support functions to the Centre in the areas of human resources management, finance, administration, security and corporate secretariat. Legal Services provide a host of legal services to FINTRAC, ranging from litigation support to advice on operational matters.

 

Who must report

• financial entities (such as banks, credit unions, caisses populaires, trust and loan companies and agents of the Crown that accept deposit liabilities);
• life insurance companies, brokers and agents;
• securities dealers;
• persons engaged in the business of foreign exchange dealing;
• money services businesses (MSBs);
• legal counsel² (when carrying out certain activities on behalf of their clients);
• accountants (when carrying out certain activities on behalf of their clients);
• real estate brokers or sales representatives (when carrying out certain activities on behalf of their clients);
• casinos; and
• individuals when transporting large amounts of currency or monetary instruments across borders.

 

What is reported

• Suspicious transactions related to money laundering (as of November 8, 2001);
• Suspicious transactions related to terrorist financing (anticipated in 2002);
• Suspected terrorist property reports (anticipated in 2002);
• International electronic funds transfers of $10,000 or more - SWIFT³ and non-SWIFT (anticipated in 2002);
• Large cash transactions of $10,000 or more (anticipated in 2002); and
• Cross-border currency movements of $10,000 or more (anticipated in 2002).

 

How it is reported - electronically

We are unique among the world's FIUs in that our regulations require reporting entities to submit their reports electronically wherever possible, using FINTRAC's secure Web site and encryption software developed for that purpose. As a result, over 90% of transaction reports come to us electronically, enabling most information to enter our database automatically, without delays for manual inputting. Electronic reporting means that the information provided to the Centre can be accessed, collated and analyzed quickly. Ultimately it means more timely analysis and faster disclosure of information about a possible money laundering or terrorist financing operation to law enforcement and/or security authorities, facilitating the likelihood of a successful investigation and/or prosecution.

What is disclosed

Designated information can include:

Name of person(s) or company(ies) involved in the transaction(s) Address of person(s) or company(ies) involved in the transaction(s) Date of birth Citizenship Passport, record of landing or permanent resident card number Name, address and type of business where the transaction(s) occurred Date and time of the transaction(s) Type and value of the transaction including the amount and type of currency or monetary instruments involved Transaction, transit and account number

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1.	As of the date of printing of this report, regulations dealing with the following reporting requirements, had come into force: Suspicious transactions related to terrorist financing (June 12, 2002) Terrorist property (June 12, 2002) International electronic funds transfers (via SWIFT) of $10,000 or more (June 12, 2002) back
2.	Lawyers across Canada have challenged the provisions of the PCMLTFA as they apply to legal counsel. Interim injunctions have been made suspending the application of those provisions to legal counsel, pending a court decision on the merits of the case. The original petition filed in B.C. will serve as a test case for all jurisdictions. back
3.	SWIFT is the Society for Worldwide Interbank Financial Telecommunication. It is a co-operative owned by the international banking community that operates a global data processing system for the transmission of financial messages. back

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