Notice on forthcoming regulatory amendments and flexibility, updated December 2, 2021

This page was updated on December 2, 2021 to reflect amendments to the Regulations that came into force on June 1, 2021, as well as to replace the assessment section with a reference to FINTRAC's Update to Reporting Entities on expectations as of December 1, 2021. Additional changes were to include sub-measure 2.1 regarding aggregating Casino Disbursement Reports and clarify language.

On June 1, 2021, a number of regulatory amendments came into force which created or changed obligations for reporting entities (REs) that are subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Act) and associated Regulations. These amendments include, but are not limited to the following:

FINTRAC expects REs to comply with all the obligations under the PCMLTFA and associated Regulations, but understands that many may face challenges in meeting these new and changing obligations. Given the scope and magnitude of the changes, and the impact on both FINTRAC and REs, we will exercise flexibility when assessing and enforcing the Regulations with respect to the measures described below.

The measures described in this notice were developed in collaboration with the Department of Finance Canada and are being exercised on an exceptional and transitionary basis in order to respond to concerns from REs and to give them, as well as FINTRAC, the time needed to implement the necessary changes. FINTRAC will continue to assess and enforce the Act and associated Regulations with consideration for the flexible measures outlined in this notice as detailed in the Update to Reporting Entities on expectations as of December 1, 2021. The flexible measures outlined in this notice will only apply until the updated reporting forms are implemented by FINTRAC.

As part of FINTRAC's ongoing support to REs, additional notices and guidance will continue to be published on the FINTRAC website.

What are the flexible measures?

Since June 1, 2021, FINTRAC has and will continue to exercise flexibility in assessing and enforcing compliance with certain record keeping and reporting-related obligations related to the amended Regulations, as described by the measures below. FINTRAC expects REs to continue submitting reports in the same manner as they have been prior to the June 1, 2021 Regulatory amendments, until the updated reporting forms are implemented by FINTRAC.

**NOTE: These measures do not apply to any of the VC obligations. REs are expected to implement all VC related obligations, as applicable.

The flexible measures are as follows:

  1. Use of current reporting forms and systems for all report types (except LVCTR). This includes Large Cash Transaction Reports (LCTRs), Electronic Funds Transfer Reports (EFTRs) – both SWIFT and non-SWIFT, Casino Disbursement Reports (CDRs), Suspicious Transaction Reports (STRs) and Terrorist Property Reports (TPRs):
    • REs are expected to continue submitting reports as they have been prior to June 1st, 2021, using the current reporting forms and systems until the updated reporting forms are implemented by FINTRAC. This additional time is to allow REs to update their processes and systems in accordance with the Regulations. FINTRAC will continue to engage with REs on the development of the new reporting forms.
    • REs are not expected to combine and submit SWIFT and non-SWIFT EFT transactions in one reporting form until the updated EFT reporting forms are implemented.
  2. Aggregating multiple transactions based on the beneficiary for LCTRs and EFTRs (under the 24-hour rule):
    • The current LCTR and EFTR forms do not allow REs to aggregate transactions based on the same beneficiary, which is now a requirement under the Regulations.
    • FINTRAC expects REs to continue to comply with the reporting obligations that were in force prior to June 1, 2021, and in accordance with their policies and procedures, until the updated reporting forms are implemented by FINTRAC.

    2.1 Aggregating multiple transactions based on the disbursement being requested by the same person or entity, or requested on behalf of the same person or entity for CDRs (under the 24-hour rule):

    • The current CDR form does not allow REs to aggregate transactions based on the same person or entity that requested the disbursement, or that requested the disbursement on behalf of the same person or entity, which is required under the Regulations. FINTRAC expects REs to comply with the reporting obligations that were in force prior to June 1, 2021, in accordance with their policies and procedures, until the updated reporting forms are implemented by FINTRAC.
  3. Aggregating transactions of $10,000 or more with transactions of less than $10,000 for LCTRs, EFTRs and CDRs (under the 24-hour rule):
    • FINTRAC's current LCTR, EFTR and CDR forms do not allow REs to submit a report that combines aggregated transactions of less than $10,000 made within 24 consecutive hours that total $10,000 or more with one or more individual transactions of $10,000 or more in the same timeframe.
    • FINTRAC expects REs to continue submitting a report for each transaction of $10,000 or more (no 24-hour rule), and to submit a report of two or more transactions of less than $10,000 made within 24 consecutive hours that total $10,000 or more (applying the 24-hour rule).

    **NOTE: "Non-mandatory information" in measures #4 and #5 of this Notice applies to information that meets all of the following criteria:

    • Information related to fields that are not marked with an asterisk ( "*") in the Schedules,
    • Information that cannot be entered into the current reporting forms, and
    • Information that does not have a corresponding record keeping obligation in the Regulations.
  4. Taking reasonable measures to obtain report information for non-mandatory fields for all report types (except LVCTR):
    • FINTRAC will be flexible when assessing whether an RE took reasonable measures to obtain non-mandatory report information.
    • For further clarity, FINTRAC expects REs to take the steps outlined in their policies and procedures to obtain information related to fields that are not marked with an asterisk ( "*") in the Schedules. These steps may include asking clients for this information, or retrieving information that is already available, including information held in non-digital formats. For more information on reasonable measure see FINTRAC's guidance glossary.
    • FINTRAC encourages REs to continue providing this information in STRs when it is relevant to the determination of reasonable grounds to suspect money laundering and/or terrorist activity financing, as it relates to the facts, context, and indicators of the suspicion in Part G of the report.
    • FINTRAC also encourages REs to continue providing this information in Part B of the Terrorist Property Report (TPR).
  5. Reporting and record keeping of non-mandatory information for all report types (except LVCTR):
    • FINTRAC will be flexible when assessing whether non-mandatory information related to certain new fields in the Schedules was reported and kept in a record. Examples include, but are not limited to, the following new fields:
      1. Type of device used by person who makes request online
      2. Number that identifies device
      3. User name
      4. Internet Protocol address used by device
      5. Date and time of online session in which request is made
    • FINTRAC encourages REs to continue providing this information in STRs when it is relevant to the determination of reasonable grounds to suspect money laundering and/or terrorist activity financing, as it relates to the facts, context, and indicators of the suspicion in Part G of the report.
    • FINTRAC also encourages REs to continue providing this information in Part B of the TPR.

For further clarity, the flexibilities described in measures #4 and 5 do not apply to mandatory information marked with an asterisk ("*") in the Schedules.

As of June 1, 2021, how will REs be assessed while the measures are in place?

Please see the Update to Reporting Entities on expectations as of December 1, 2021 for more information on FINTRAC's assessment approach with respect to the measures described above.

When will the flexible measures end?

The above listed measures are applicable until the updated reporting forms are implemented by FINTRAC. The following report forms will be updated:

FINTRAC will inform REs on any changes to the forms' delivery schedule, which has been published on the website. We will also inform REs when the reporting forms are implemented by FINTRAC and the flexible measures no longer apply.

Date Modified: