FINTRAC assessment manual

FINTRAC assessment manual (PDF version, 1.2 Mb)

FINTRAC assesses the compliance of regulated businesses with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations. In this Assessment manual, FINTRAC presents the approach and methods it uses to conduct compliance examinations. The manual does not establish new requirements or expectations, serve as regulatory guidance, or instruct businesses on how to carry out their operations. It is meant to help businesses understand how FINTRAC assesses whether they have implemented and maintained a compliance program that adequately meets the legal requirements set out in the PCMLTFA and associated Regulations, and to help them prepare for an examination. 

The manual describes FINTRAC’s examination framework, which takes into account the type, nature, size and complexity of the business to be assessed. FINTRAC conducts risk-based examinations, meaning that it focuses on the areas of a business that pose a risk of being used for money laundering or terrorist activity financing, and the areas that may be at greater risk of not meeting legal requirements.

The manual also describes the methods FINTRAC uses to assess the information it gathers from interviews, documents, records and financial transaction reports against the requirements set out in the PCMLTFA and associated Regulations. In making this assessment, FINTRAC also considers the guidance it issues, which sets out how it interprets the legal requirements.

At a high level, the requirements we examine are:

Canadian businesses covered under the PCMLTFA


Accountants

British Columbia notaries

Casinos

Dealers in precious metals and stones

Financial entities

Life insurance

Money services businesses

Real estate

Securities dealers

Compliance program

We assess whether you have appointed a compliance officer; whether you have developed and applied policies and procedures, a risk assessment, and a training program, and whether you review their effectiveness every two years.

Client identification and know your client

We verify that you ascertain the identity of persons and confirm the existence of entities when required and within the prescribed timelines, and that your records show that the “know your client” requirements are met.

Reporting

We verify that you meet the requirement to submit financial transaction records to FINTRAC that are complete and accurate within the prescribed timelines. We also compare your transaction records with the reports you submitted and with money laundering and terrorist activity financing indicators to confirm whether you have adequately reported specific transactions when required.

Record keeping

We verify that you keep the records that are required by the PCMLTFA and associated Regulations, including account opening records, records of large cash transactions, records of Suspicious Transaction Reports, foreign currency exchange records, client information records, records of reasonable measures and the records related to client identification and "know your client" requirements.

Correspondent banking

We verify that you take all the prescribed measures, such as obtaining the required approvals, keeping records of required information, conducting risk assessments, and taking special measures when required.

Foreign branches, subsidiaries and affiliates

We review the policies and procedures that you developed for your foreign branches and foreign subsidiaries to make sure that they are adequate, and reflect Canadian obligations set out in the PCMLTFA and associated Regulations. We also confirm that you have adequate policies and procedures in place to share information with your affiliates for the purpose of detecting or deterring a money laundering offence or a terrorist activity financing offence, and of assessing the risk of such an offence.

Money services business registration

We verify that you keep your registration information up to date, respond to clarification requests, renew your registration or cancel your registration (if applicable).

Ministerial directives

We verify that you have taken action as indicated in the ministerial directives.

For greater detail on how FINTRAC assesses compliance with the above-mentioned requirements, please consult the Assessment manual.

When our assessment is complete, we discuss our preliminary findings with you before sending our findings letter. In our assessments, we focus more on the overall soundness of a business' compliance program and less on the technical aspects of compliance. We are committed to helping businesses meet the legal requirements set out in the PCMLTFA and associated Regulations, because our collective efforts serve to protect Canadians and the integrity of Canada's financial system.

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