Money Transmitters

In Canada, a Money Transmitter, which is typically classified as a Money Services Business (MSB), must comply with specific regulations to ensure the integrity of the financial system, protect consumers, and prevent financial crimes such as money laundering and terrorist financing. The primary regulatory framework for money transmitters is overseen by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). Here are the key regulations that a Money Transmitter in Canada must follow:

Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA)

The PCMLTFA is the cornerstone legislation governing anti-money laundering (AML) and counter-terrorist financing (CTF) in Canada. Money Transmitters are considered Money Services Businesses (MSBs) under this act.

Registration with FINTRAC

Money Transmitters are required to register with FINTRAC and comply with its reporting and record-keeping requirements. Registration involves providing information about the business, its ownership, and its AML/CTF compliance program.

Customer Due Diligence (CDD)

Money Transmitters must perform customer due diligence to verify the identity of their customers and assess the nature of their business relationships. This includes obtaining information about the beneficial ownership of clients.

Record Keeping

Money Transmitters are required to maintain records of transactions and certain customer information for a specified period. This is crucial for tracking and reporting financial activities when necessary.

Reporting Obligations

Money Transmitters are obligated to report certain transactions to FINTRAC. This includes large cash transactions, electronic funds transfers (EFTs) of $10,000 or more, and suspicious transactions. Timely and accurate reporting is vital in combating money laundering and terrorist financing.

Compliance Program

Money Transmitters must establish and implement a comprehensive AML/CTF compliance program. This program should include internal controls, ongoing monitoring, employee training, and risk assessments to ensure compliance with regulatory requirements.

Risk Assessment

Money Transmitters must conduct a risk assessment of their business operations to identify and mitigate potential money laundering and terrorist financing risks.

Provincial Regulations

In addition to federal regulations, Money Transmitters may be subject to specific provincial regulations and licensing requirements. Some provinces have additional rules related to the operation of financial services businesses.

Money Transmitters should stay informed about updates to AML/CTF regulations, guidelines, and best practices. Seeking legal advice and consulting with compliance experts can help ensure that Money Transmitters in Canada meet their regulatory obligations and operate within the legal framework.