Foreign money services businesses

If you have a place of business in Canada, see Money services businesses.

If you are unsure, see The difference between money services businesses and foreign money services businesses.

Who is a foreign money services business?

You are considered a foreign money services business (FMSB) if all of the following criteria apply:

  1. You are engaged in the business of providing at least one money services business (MSB) service;
  2. You do not have a place of business in Canada;
  3. You direct your MSB services at persons or entities in Canada; and
  4. You provide these services to clients in Canada.

1. You are engaged in the business of providing at least one MSB service

Foreign exchange dealing

Conducting transactions where you exchange one type of currency for another (for example, exchanging USD for CAD).

Money transferring

Remitting or transmitting funds from one person or entity to another using an electronic funds transfer network or any other method such as Hawala, Hundi, Fei ch'ien, or Chitti.

Issuing or redeeming money orders, traveller's cheques or anything similar

Your business issues or redeems money orders, travellers' cheques or other similar negotiable instruments. This does not include cashing cheques made out to a particular individual or entity.

Issuing
To offer your own business's money orders or traveller's cheques.
Redeeming
To repurchase your own business's money orders or traveller's cheques by returning the purchase price to the buyer.
Selling or cashing
To exclusively sell or cash money orders or traveller's cheques issued by another business does not make you an MSB.
Dealing in virtual currency

Dealing in virtual currency includes both virtual currency exchange and virtual currency transfer services.

  1. Virtual currency exchange services include exchanging:
    • funds for virtual currency;
    • virtual currency for funds; or
    • virtual currency for another virtual currency.
  2. Virtual currency transfer services include:
    • transferring virtual currency at the request of a client; or
    • receiving a transfer of virtual currency for remittance to a beneficiary.

2. You do not have a place of business in Canada

To not have a place of business in Canada means:

Note:  If you provide MSB services and have a place of business in Canada, then you may be considered an MSB. Please see Money services businesses for additional information.

3. You direct services at persons or entities in Canada

A business is directing services at persons or entities in Canada if at least one of the following applies:

If none of the above apply to you, it is still possible that you are directing services at persons or entities in Canada. A combination of additional criteria may be considered in order to make this determination. For examples of additional criteria, please refer to Annex 1.

Examples of "directing services" at persons or entities in Canada:

4. You provide these services to clients in Canada

A client is deemed to be "in Canada" if they have a connection or residential ties with Canada.

You can determine if your client is "in Canada" based on the information you acquire through your interactions with them, such as when verifying their identity. The client is "in Canada" when:

Note: An individual may be deemed to be "in Canada" when they are temporarily living, attending school, working, or vacationing outside of Canada.

Please address questions about FMSBs to guidelines-lignesdirectrices@fintrac-canafe.gc.ca.

Your requirements

Register your FMSB

To register your FMSB with FINTRAC, the following information must be provided with your completed registration form.

Police record check

You must provide FINTRAC with a criminal record check for the following individuals:

If you operate your business yourself (e.g., you are a sole proprietor), you must provide this document about yourself. Police record checks must be issued by a competent authority in the country in which the individual resides.

Translation of the police record check

If the document is in a language other than English or French, it must be translated into English or French by a certified translator in Canada. You must obtain and provide the translation before you register.

This document is required to be translated by a certified Canadian translator. A certified translator is an individual that holds the title of professional certified translator granted by a Canadian provincial or territorial association or body that is competent under Canadian provincial or territorial law to issue such certification.

The following is a list of Canadian associations:

You must provide the Statement of certification.

FINTRAC requires proof that the translated document was issued from a competent and certified translator. This proof can be a certificate of authenticity signed by the certified translator, and containing the translator's stamp, or the translator's membership number from one of the above-mentioned professional translation associations.

Note: We recommend that you scan your three documents into one PDF file for your submission. If the documents are illegible or unclear, FINTRAC will not be able to process your form and will request that you resubmit the documents.

Document submission recommendation

Document submission recommendation

Representative for service in Canada

FMSBs must designate a representative for service in Canada and provide FINTRAC with the name and contact details of this person. This representative must reside in Canada and be authorized to accept, on behalf of your business, FINTRAC related notices and inquiries.

Note that it is the FMSB, and not the representative for service in Canada, who is responsible for meeting the obligations under the PCMLTFA and associated Regulations.

Note: Financial entities (such as banks) may ask you questions regarding your business and whether or not you are registered with FINTRAC. Under the PCMLTFA and associated Regulations, financial entities must ensure that FMSBs for which they open an account, or with which they have a correspondent banking relationship, are registered with FINTRAC.

For further information on registration, see Register your money services business.

*Note: On June 1, 2021, regulatory amendments, which will create or change obligations for all reporting entities (REs) subject to the PCMLTFA and associated Regulations, will come into force. FINTRAC expects that REs will comply with the amended Regulations, but will exercise flexibility in assessing and enforcing compliance with certain record keeping and reporting requirements. See the Notice on forthcoming regulatory amendments and flexibility for more information.

ANNEX 1: Examples of additional criteria

The following list provides examples of additional criteria that may be considered when determining whether you "direct services at persons or entities in Canada". This is not an exhaustive list.

Table 1— Summary of requirements for foreign money services businesses (FMSB)
Category of requirement under the PCMLTFA and associated Regulations Requirements
Compliance program

Foreign money services businesses must implement a compliance program. A strong compliance program will form the basis of meeting all of your regulatory requirements. For more information, see Compliance program requirements and the Risk assessment guidance.

Know your client

Foreign money services businesses must verify the identity of persons and entities for certain activities and transactions, and carry out other customer due diligence activities, as described below:

When to verify the identity of persons and entities
Foreign money services businesses must verify the identity of persons and entities for certain transactions and activities. For more information, see When to verify the identity of persons and entities – Money services businesses and foreign money services businesses.

Methods to verify the identity of persons and entities
Foreign money services businesses must verify the identity of persons and entities using the methods prescribed by the PCMLTFA and associated Regulations. For more information, see Methods to verify the identity of persons and entities.

Business relationship requirements
Foreign money services businesses enter into a business relationship with a client the second time they are required to verify the identity of that client or when they enter into a service agreement with a client that is an entity in Canada to provide an FMSB service. For more information, see Business relationship requirements.

Ongoing monitoring requirements
Foreign money services businesses have ongoing monitoring requirements when they enter into a business relationship with a client. For more information, see Ongoing monitoring requirements.

Beneficial ownership requirements
Foreign money services businesses must obtain and take reasonable measures to confirm the accuracy of beneficial ownership information for entities. For more information, see Beneficial ownership requirements.

Third party determination requirements
Foreign money services businesses have third party determination requirements when they are required to submit certain reports and keep certain records. For more information, see Third party determination requirements.

Politically exposed persons (PEP) and heads of international organizations (HIO) requirements
Foreign money services businesses are required to take reasonable measures to make PEP and HIO determinations for certain activities or transactions. If a foreign money services business determines that a person is a PEP or a HIO then they have additional related requirements. For more information, see Politically exposed persons and heads of international organizations guidance and Politically exposed persons and heads of international organizations guidance for non-account based reporting entity sectors.

Reporting

Foreign money services businesses must submit the following reports to FINTRAC:

Suspicious transaction reports
For more information, see:

Terrorist property reports  
For more information, see:

Large cash transaction reports 
For more information, see:

Large virtual currency transaction reports 
For more information, see:

Electronic funds transfer reports 
For more information, see:

24-hour rule

Foreign money services businesses have 24-hour rule requirements for large cash transaction reports, large virtual currency transaction reports, and incoming or outgoing electronic funds transfer reports. For more information, see Transaction reporting guidance: the 24-hour rule.

Record Keeping

Foreign money services businesses must keep certain records, including records related to transactions and client identification. For more information, see Record keeping requirements for money services businesses and foreign money services businesses.

Travel rule

Foreign money services businesses have travel rule requirements related to electronic funds transfers and virtual currency transfers. For more information, see Travel rule for electronic funds and virtual currency transfers.

Ministerial directives

Ministerial directive requirements apply to all reporting entity sectors. For more information, see Ministerial directives and transaction restrictions.

Penalties for non-compliance

FINTRAC has the legislative authority to issue administrative monetary penalties (AMPs) to reporting entities that are found to be non-compliant with the PCMLTFA and associated Regulations. For more information, see Penalties for non-compliance.

Glossary

The FINTRAC Guidance glossary includes terminology defined in the PCMLTFA and associated Regulations, as well as terms used throughout the guidance. For more information, see FINTRAC's Guidance Glossary.

Date Modified: