Foreign money services businesses (FMSBs)

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.

The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) has been amended to include foreign money services businesses (FMSBs).

If you are an FMSB, as of June 1, 2020, you need to meet the following obligations:

  • Register your business with FINTRAC;
  • Report certain financial transactions to FINTRAC;
  • Keep certain records;
  • Identify clients; and
  • Have a compliance program in place.

To begin the FMSB registration process, please complete and submit the Pre-registration form.

Who is an FMSB?

You are considered an 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 individual 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 travellers 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 the money orders or traveller's cheques of another business that issued the money order or traveller's cheque, does not make you an MSB.
Dealing in virtual currency

Note: This MSB service is coming into force on June 1st, 2020.

— 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

Your obligations as an FMSB will come into force at two different dates:

  1. The obligations that will apply to you on June 1st, 2020 are explained in detail below.
  2. On June 1st, 2021, additional requirements that currently apply to MSBs will also apply to FMSBs. Other amendments to the Regulations will come into force and apply to FMSBs. FINTRAC is currently updating its guidance to explain these obligations to FMSBs and this information will be made available on our website.

Register your FMSB

FMSBs must register with FINTRAC as of June 1st, 2020.

Note: Starting on March 9, 2020, FMSBs will be able to voluntarily provide their registration information to FINTRAC ahead of June 1st, 2020.

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 defined as an individual that is recognized by a provincial or territorial association in Canada that is competent under provincial or territorial law to issue such a certification.

The following is a list of Canadian associations:

  • Association of Translators and Interpreters of Alberta (ATIA)
  • Society of Translators and Interpreters of British Columbia (STIBC)
  • Association of Translators, Terminologists and Interpreters of Manitoba (ATIM)
  • Corporation of Translators, Terminologists and Interpreters of New Brunswick (CTINB)
  • Association of Translators and Interpreters of Nova Scotia (ATINS)
  • Association of Translators and Interpreters of Ontario (ATIO)
  • Association of Translators and Interpreters of Saskatchewan (ATIS)
  • L'ordre des traducteurs, terminologues et interprètes agréés du Québec (OTTIAQ)

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.

Compliance program

A comprehensive and effective compliance program is the basis of meeting all of your obligations under the PCMLTFA and associated Regulations. During a FINTRAC examination, it is important to demonstrate that the required documentation is in place and that employees, agents, and all others authorized to act on your behalf are well trained and can effectively implement all the elements of your compliance program. A senior officer must approve the compliance program and the compliance officer must have the necessary authority to carry out the requirements of the program. You must:

See Compliance program requirements, the Risk-based approach guide and the Risk-based approach workbook for MSBs for more information on these obligations.

Know your client

FMSBs must verify the identity of their clients for certain activities and transactions following the methods prescribed the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFR). Starting on June 1st, 2020, you will need to verify the identity of your clients for the purpose of submitting suspicious transaction reports (STRs) to FINTRAC.

Reporting

FMSBs are required to complete reports about certain transactions and property and submit them to FINTRAC. Financial transaction reports are critical to FINTRAC's ability to analyze transactions which leads to the development of the financial intelligence that is disclosed to law enforcement and partner agencies. Because these reports are critical, the quality of your reporting will be reviewed in examinations.

As of June 1st, 2020, you will need to report the following transactions:

Suspicious transactions: After determining that there are reasonable grounds to suspect that a transaction or an attempted transaction is related to the commission or attempted commission of a money laundering or terrorist financing offence, you must submit a suspicious transaction report (STR) as soon as practicable. The following guidance explains how to identify and report STRs. See What is a suspicious transaction report?, Reporting suspicious transactions to FINTRAC and Money laundering and terrorist financing indicators - Money services businesses.

Terrorist property: When you know or believe that property in your possession or under your control is owned, controlled by or on behalf of a terrorist group or listed person or entity, you must disclose this information to the Royal Canadian Mounted Police (RCMP), the Canadian Security Intelligence Service (CSIS) and submit a Terrorist Property Report (TPR) to FINTRAC without delay. See Guideline 5: Submitting Terrorist Property Reports.

If you have a computer and an internet connection, you must submit STRs to FINTRAC electronically. TPRs can only be submitted by mail or by fax at 1-866-226-2346.

Record keeping

You are required to keep certain records. They must be kept in such a way that they can be provided to FINTRAC within 30 days if required to do so. As of June 1st, 2020, you will need to keep the following records:

Client verification records: When you verify the identity of a client using one of the prescribed methods, you must record certain information. For more information, see the Methods to verify the identity of an individual and confirm the existence of a corporation or an entity other than a corporation.

Retention: You must keep a record of the information recorded while verifying a client’s identity for at least five years from the date it was created.

Suspicious transaction report records: If you submit an STR to FINTRAC, you must keep a copy of it. This includes STRs for both completed and attempted transactions.

Retention: You must keep STR records for at least five years from the date the report was submitted.

Reasonable measures records: When reasonable measures were taken, but were unsuccessful, you must keep a record. A reasonable measure is unsuccessful when you do not obtain a response, such as a yes or no, and you are unable to make a conclusive determination.

When reasonable measures are unsuccessful, you must record the following information:

You must outline the reasonable measures that you take in your compliance program’s policies and procedures as outlined by the PCMLTFA and associated Regulations.

Retention: You must keep records of unsuccessful reasonable measures for at least five years following the date they were created.

If you do not meet all of these obligations, you may be assessed, or incur penalties or other consequences.

Glossary

FINTRAC has created a Guidance glossary that defines certain terms used throughout its guidance documents.

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.

Date Modified: