When to verify the identity of persons and entities—Departments and Agents of the Crown


March 2021

This guidance comes into effect on June 1, 2021.

This guidance on client identification describes when departments and agents of the Crown must verify the identity of persons and entities as required by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations. Details on how to verify the identity of persons and entities are available in FINTRAC's Methods to verify the identity of persons and entities.

This guidance will only describe the client identification requirements of departments and agents of the Crown that issue, sell or redeem money orders in the course of providing financial services to the public.Footnote 1

If you are a department or an agent of the Crown that accepts deposit liabilities, your requirements can be found on the financial entities sector page.Footnote 2

If you are a department or agent of the Crown that sells precious metals in the amount of $10,000 or more in a single transaction, your requirements can be found on the dealers in precious metals and precious stones sector page.Footnote 3

This document answers the following questions:

  1. When do I have to verify the identity of persons and entities?
  2. What is the difference between verifying identity and keeping client identification information up to date?
  3. What are the exceptions to client identification requirements?

**Note: Throughout this guidance, references to dollar amounts (such as $10,000) are in Canadian dollars.

1. When do I have to verify the identity of persons and entities?  

As a department or agent of the Crown, you must verify the identity of clients for the following:

  1. Large cash transactions
  2. Large virtual currency (VC) transactions
  3. Suspicious transactions
  4. Issuing, selling, or redeeming money orders of $3,000 or more

a. Large cash transactions

You must verify the identity of every person or entity from which you receive $10,000 or more in cash when the transaction takes place.Footnote 4 This includes a situation where you are deemed to have received cash because you have authorized another person or entity to receive it on your behalf. Footnote 5

**Note: This obligation is subject to the 24-hour rule.Footnote 6

b. Large virtual currency (VC) transactions

You must verify the identity of every person or entity from which you receive VC in an amount equivalent to $10,000 or more when the transaction takes place.Footnote 7 This includes a situation where you are deemed to have received virtual currency because you have authorized another person or entity to receive it on your behalf.Footnote 8

**Note: This obligation is subject to the 24-hour rule.Footnote 9

c. Suspicious transactions

You must take reasonable measures to verify the identity of every person or entity that conducts or attempts to conduct a suspicious transaction, regardless of the transaction amount, and including transactions that would normally be exempt from client identification requirements, before sending a Suspicious Transaction Report  (STR).Footnote 10

d. Issuing, selling, or redeeming money orders of $3,000 or more

You must verify the identity of every person or entity that requests that you issue, sell, or redeem one or more money orders of $3,000 or more.Footnote 11 In the case of a person, you must verify their identity at the time of the transaction.Footnote 12 In the case of an entity, you must verify their identity within 30 days after the day the information record was created.Footnote 13

2. What is the difference between verifying identity and keeping client identification information up to date? 

As part of your ongoing monitoring requirements for business relationships, you must keep client identification information up to date, at a frequency that will vary based on your risk assessment, and as outlined in your policies and procedures.Footnote 14 This does not require you to re-identify clients in accordance with the methods to verify identity. As explained in the ongoing monitoring guidance, the requirement is only for you to keep client identification information up to date. This is understood to be information that you have about your client such as their name and their address. In the case of a person, this would also include, but is not limited to, the nature of their principal business or their occupation; and in the case of an entity, the nature of its principal business.

3. What are the exceptions to client identification requirements?

You do not have to re-identify a person or an entity if you previously did so using the methods specified by the Regulations in place at the time, and kept the associated records, so long as you have no doubts about the information used.Footnote 15

Large cash transactions

You do not have to verify the identity of a person or entity that conducts a large cash transaction if you receive the cash from a client that is a financial entity (FE) or a public body, or from a person who is acting on behalf of a client that is an FE or a public body.Footnote 16

Large VC transactions

You do not have to verify the identity of a person or entity that conducts a large VC transaction if you receive the VC from a client that is an FE or a public body, or from a person acting on behalf of a client that is an FE or public body.Footnote 17

When you receive VC as compensation for the validation of a transaction that is recorded in a distributed ledger or you receive a nominal amount of VC for the sole purpose of validating another transaction or a transfer of information—you do not need to keep a large VC transaction record and do not need to verify identity.Footnote 18

Suspicious transactions

You do not have to take reasonable measures to verify the identity of the person or entity that conducts or attempts to conduct a suspicious transaction if:

Issuing or selling money orders of $3,000 or more

You do not have to verify the identity of a person or entity from which you receive $3,000 or more for the issuance or sale of one or more money orders, if you receive the amount from a client that is an FE, or a person who is acting on behalf of a client that is an FE.Footnote 21

Public bodies, very large corporations and trusts

You do not have to verify the identity of a person or entity in connection with issuing, selling, or redeeming money orders of $3,000 or more, if the client is:

Date Modified: