Coming Soon: Changes to FINTRAC Regulations
As of March 2023, The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has made several significant changes to its regulations and guidelines. These changes aim to strengthen Canada’s anti-money laundering and terrorist financing Act (AML/the Act) efforts by improving financial institution reporting requirements and updating the criteria for identifying suspicious transactions.
In this blog post, we will look at some of the most important changes that financial institutions and their compliance teams should be aware of.
These significant changes aim to strengthen Canada’s anti-money laundering and counter-terrorist financing framework and enhance the effectiveness of FINTRAC’s operations.
In this blog post, we will look at some of the most important changes that financial institutions and their compliance teams should be aware of.
These significant changes aim to strengthen Canada’s anti-money laundering and counter-terrorist financing framework and enhance the effectiveness of FINTRAC’s operations.
- STR mock form
- Reporting suspicious transactions to FINTRAC guidance
- STR JSON schemas (reports and transactions)
FINTRAC plans to make significant changes to the Suspicious Transaction Report (STR) form. The form will reflect legislative changes that went into effect on June 1, 2021, as well as new functionality that will allow for a more streamlined experience when reporting suspicious transactions to FINTRAC.
Enhanced Reporting Requirements
The introduction of enhanced reporting requirements for financial institutions is a significant change to FINTRAC’s regulations. These requirements apply to all FINTRAC-regulated entities, including banks, credit unions, and payment service providers.
Under these new regulations, financial institutions must submit more detailed information on transactions involving high-risk customers, such as politically exposed persons (PEPs) including their family members. Institutions must also identify and report any transactions involving virtual currency, including those worth $10,000 CAD or more.
Furthermore, even if the transaction is not completed, the new reporting requirements make it necessary for banks to submit reports on attempted transactions involving suspicious activity. This safeguard ensures that FINTRAC is aware of any potential threats to the Canadian financial system. FINTRAC is making important changes to its reporting forms following regulatory amendments in 2019. The Electronic Funds Transfer Report (EFTR) form is currently being updated to meet these requirements.
Updated Criteria for Suspicious Transactions
Another significant change to FINTRAC’s regulations is the criteria for identifying suspicious transactions. Financial institutions must use a risk-based approach to identify and report suspicious transactions. To determine whether a transaction is suspicious, institutions must consider factors such as the customer’s risk profile, the nature of the transaction, and the source of funds.
Lastly, transactions involving the use of emerging digital payments, such as mobile and e-wallets, must be detected and reported.
Enhanced Compliance Requirements
In addition to the above changes, FINTRAC has also introduced new compliance requirements for financial institutions. These requirements aim to ensure that institutions have robust AML/the Act programs in place and are effectively managing the risks associated with their customers and transactions.
Financial institutions are now obligated to conduct periodic risk assessments to identify and manage AML/the Act risks. Banking institutions must also monitor consumers’ transactions on an ongoing basis to detect any suspicious activity.
Financial institutions must provide regular training to their employees on AML/the Act risks as well as how to identify and report suspicious activity.
Finally, the changes to FINTRAC’s regulations indicate a significant shift in Canada’s anti-money laundering/financial terrorism activities. Financial institutions and their compliance teams must react promptly to these developments by engaging with a third-party solution aggregator such as IDVerifact to meet their new reporting and compliance requirements. This year, FINTRAC’s focus is on revising and updating the Large Cash Transaction Report (LCTR) and Suspicious Transaction Report (STR) forms.
Enhanced Reporting Requirements
The introduction of enhanced reporting requirements for financial institutions is a significant change to FINTRAC’s regulations. These requirements apply to all FINTRAC-regulated entities, including banks, credit unions, and payment service providers.
Under these new regulations, financial institutions must submit more detailed information on transactions involving high-risk customers, such as politically exposed persons (PEPs) including their family members. Institutions must also identify and report any transactions involving virtual currency, including those worth $10,000 CAD or more.
Furthermore, even if the transaction is not completed, the new reporting requirements make it necessary for banks to submit reports on attempted transactions involving suspicious activity. This safeguard ensures that FINTRAC is aware of any potential threats to the Canadian financial system. FINTRAC is making important changes to its reporting forms following regulatory amendments in 2019. The Electronic Funds Transfer Report (EFTR) form is currently being updated to meet these requirements.
Updated Criteria for Suspicious Transactions
Another significant change to FINTRAC’s regulations is the criteria for identifying suspicious transactions. Financial institutions must use a risk-based approach to identify and report suspicious transactions. To determine whether a transaction is suspicious, institutions must consider factors such as the customer’s risk profile, the nature of the transaction, and the source of funds.
Lastly, transactions involving the use of emerging digital payments, such as mobile and e-wallets, must be detected and reported.
Enhanced Compliance Requirements
In addition to the above changes, FINTRAC has also introduced new compliance requirements for financial institutions. These requirements aim to ensure that institutions have robust AML/the Act programs in place and are effectively managing the risks associated with their customers and transactions.
Financial institutions are now obligated to conduct periodic risk assessments to identify and manage AML/the Act risks. Banking institutions must also monitor consumers’ transactions on an ongoing basis to detect any suspicious activity.
Financial institutions must provide regular training to their employees on AML/the Act risks as well as how to identify and report suspicious activity.
Finally, the changes to FINTRAC’s regulations indicate a significant shift in Canada’s anti-money laundering/financial terrorism activities. Financial institutions and their compliance teams must react promptly to these developments by engaging with a third-party solution aggregator such as IDVerifact to meet their new reporting and compliance requirements. This year, FINTRAC’s focus is on revising and updating the Large Cash Transaction Report (LCTR) and Suspicious Transaction Report (STR) forms.
Expanded reporting, updated suspicious transaction criteria, and new compliance requirements all need a more proactive approach to AML/the Act risk management. This is where IDVerifact can help your business stay compliant to the new changes to FINTRAC’s regulations. Our platform provides the ability to integrate quickly with enterprise risk management solutions for case management is essential for maintaining compliance without significant effort and cost increases. Providing you with access to sanctions, PEP, and watchlists globally and from multiple jurisdictions.
