FINTRAC Interpretation Notice no. 6

January 14, 2011

Financial Transaction Reporting to FINTRAC by Reporting Entities that are Part of a Multiple-Entity Organizational Structure

Sections 5, 7, 7.1 and 9 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA)

Reporting entities have obligations under Part I of the PCMLTFA, including reporting, client identification, record keeping and implementing a compliance regime. Each distinct entity operating in Canada that has these obligations under the PCMLTFA is responsible for ensuring that all of their obligations are met.

The purpose of this notice is to clarify reporting obligations when there is more than one reporting entity in a multiple-entity organization.

Multiple-entity organization means an entity with one or more subsidiaries or any organizational structure with two or more distinct legal entities. This can be a holding company or a conglomerate financial institution, as in the following examples:

Reporting transactions

Reporting entities are required to report to FINTRAC electronically if they have the technical capability to do so. For more information about technical capability and reporting obligations, see FINTRAC's guidelines about each report type.

Reporting entities have to enrol with FINTRAC for electronic reporting. For a multiple-entity organization, this means that each distinct entity that is a reporting entity is required to be enrolled with FINTRAC separately. However, if each distinct entity that is a reporting entity is already enrolled separately with FINTRAC, no further or additional enrolment is required.

Centralized electronic reporting for multiple-entity organizations

If a multiple-entity organization chooses to centralize electronic reporting for part or all of the organization, each distinct reporting entity within the organization must still be separately enrolled with FINTRAC, as explained above.

The entity within the organization that is chosen to send reports to FINTRAC for any other reporting entity in the organization will also have to be registered as a service provider. Each reporting entity involved in the centralized reporting will need to designate that entity as their service provider and delegate the appropriate reports. In such situations, the legal obligation to report remains with each distinct reporting entity that conducts the reportable transactions.

Learn more about entering into service provider arrangements. It should be noted that there are no legislative or operational requirements for reporting entities to use a service provider, and that the use of a service provider is at the reporting entity's discretion.

Transactions involving more than one reporting entity

When two or more entities within a multiple-entity organization each undertake a reportable transaction that is part of larger transaction, because of their respective specialties, a distinct report is required for each reportable transaction. One aggregate report on behalf of the entire organization is not acceptable; an aggregate report would result in the reporting entity being in non-compliance with the PCMLTFA, which could lead to civil or criminal penalties.

However, if the entities involved are financial entities, money services businesses or casinos and the reportable transaction is an electronic funds transfer (EFT), more than one EFT report may not be required. Please see Guideline 8: Submitting Electronic Funds Transfer Reports to FINTRAC for more information about this.

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