In its continued effort to combat money laundering and the financing of terrorist organizations, and to address the evolving nature of financial crimes, the Canadian government made recent changes to the Financial Transactions and Reports Analysis Centre (FINTRAC) reporting forms.
As Canada’s financial intelligence unit, FINTRAC is tasked with monitoring monetary transactions to identify and prevent financial crime. This is done primarily by reviewing reports of financial transactions for suspicious activity and patterns that may be indicative of illicit activity.
Reporting entities, such as banks, insurance companies, and others, have an obligation under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) to report to FINTRAC certain financial transactions.
Changes to FINTRAC Reporting Forms
Beginning in 2022 and continuing through 2024, FINTRAC has undertaken an initiative to update and modernize several reporting forms, including the Large Cash Transaction Report (LCTR), Suspicious Transaction Report (STR), Electronic Funds Transfer Report (EFTR), and Casino Disbursement Report (CDR).
To maintain compliance with AML laws and regulations, it’s critical that entities with reporting obligations keep up with applicable legislative changes and implementation dates.
Below is an overview of FINTRAC reporting obligations and the timeline for implementing changes to the reporting forms. For more information regarding FINTRAC, view our regularly updated summation of FINTRAC guidance and resources as they are released.
Large Cash Transaction Report (LCTR)
An LCTR must be submitted when a reporting entity receives $10,000 CAD or more in cash in a single transaction or when it receives two or more cash amounts totaling $10,000 CAD or more made within 24 consecutive hours by or on behalf of the same individual or entity.
An LCTR must be submitted to FINTRAC within 15 calendar days after the transaction.
The updated LCTR will reflect the legislative amendments that came into force on June 1, 2021. The form includes added functionality that is meant to streamline the reporting of large cash transactions.
The implementation date for the LCTR was July 2022, and the anticipated form release date is October 21, 2023.
Suspicious Transaction Report (STR)
A STR must be submitted when there are reasonable grounds to suspect that a transaction is related to the commission or attempted commission of a money laundering or terrorist activity financing offense. There is no monetary threshold associated with the reporting of a suspicious transaction under the Canadian anti-money laundering and anti-terrorist financing (AML/ATF) regime.
A STR must be submitted as soon as practicable after completing measures determining that there are reasonable grounds to suspect that a transaction is related to a money laundering/terrorist financing (ML/TF) offense.
The STR will now include legislative amendments that came into effect in June 2021 and are expected to provide a more efficient approach to filing.
The implementation date for the STR was June 2023, and the anticipated form release date is April 6, 2024.
Electronic Funds Transfer Report (EFTR)
An EFTR must be submitted for the instructions to transfer $10,000 CAD or more out of, or into, Canada in a single transaction; or in two or more transactions totaling $10,000 CAD or more made within 24 consecutive hours by or on behalf of the same individual or entity.
Incoming and outgoing international electronic funds transfers (EFTs) must be reported no later than five working days after the day of the transmission of the instructions.
The EFTR has been updated to better align with regulatory requirements.
The anticipated implementation date for the EFTR is September 2023, and the anticipated form release date is June 2024.
Casino Disbursement Report (CDR)
A CDR must be submitted by a casino when it makes a disbursement of $10,000 CAD or more in a single transaction, or upon making two or more disbursements totaling $10,000 CAD or more within 24 consecutive hours that are received by or on behalf of the same individual or entity.
A CDR must be filed within 15 calendar days after the disbursement.
The anticipated implementation date for the CDR is October 2023, and the anticipated form release date is June 2024.
FINTRAC Web Reporting System (FWR)
FINTRAC’s web reporting system (FWR) is a secure system that may be accessed over the internet. FWR allows reporting entities to manually submit and correct reports. LCTRs, STRs, and CDRs can all be submitted through FWR.
To access the system, reporting entities must enroll with FINTRAC. Enrollment entails providing some basic company information, such as the business name and main address where the company conducts business, as well as the name of the company’s FINTRAC web reporting administrator.
Reporting forms should be submitted in the same manner as they have been prior to the regulatory amendments until the updated reporting forms are implemented by FINTRAC. With limited exceptions, reporting entities should continue to submit their reporting forms through FINTRAC’s web reporting system.
Companies can access FINTRAC’s full schedule for the implementation of reporting forms here. FINTRAC has also released draft documents to help businesses prepare for the reporting form changes, available here.
Changes to regulatory reporting obligations can be a burden on compliance teams. Fortunately, Alessa provides a variety of AML compliance solutions that can help organizations like yours stay on top of changing laws and regulations and manage your reporting obligations more effectively and efficiently.
Alessa’s automated AML regulatory reporting technology can auto-populate, validate, and electronically submit regulatory reports in just minutes.
For more information on how the changes to FINTRAC reporting forms might impact your organization and to learn more about our automated regulatory reporting solution, contact an Alessa representative today.