Your Money Services Business in Canada:
What you need to know
This information is for money services businesses in Canada. It explains their legal obligations under Canada's Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
You are a money services business (MSB) if your business in Canada offers any of the following services to the public:
- Foreign exchange dealing - conducting transactions where one type of money or currency (like US dollars, Canadian dollars, Euros and so on) is exchanged for another.
- Money transfer service - transferring funds from one individual or entity to another using an electronic funds transfer network or any other transfer method such as hawala, hundi, fei ch'ien, and chiti.
- Cashing or selling money orders, traveller's cheques or anything similar - this does not include cashing cheques made out to a particular individual or entity.
If you do not offer any of these services to the public, then the obligations and responsibilities outlined below do not apply to you.
Your obligations and responsibilities
As a money services business (MSB) in Canada, you have legal obligations under Canada's Proceeds of Crime (Money Laundering) and Terrorist Financing Act. At the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), we make sure that businesses are in compliance with this law.
Below, you will find a short summary of your obligations and responsibilities. It is important that you understand these obligations and meet them to be in full compliance with this law.
You have to register your MSB with us before conducting any transactions. The registration of your business should be done online. Once you have registered, you have to:
- keep your registration information up to date;
- respond to our requests to clarify your information;
- renew your registration before it expires; and
- let us know if you stop offering MSB services to the public.
You have to report certain transactions to us. We provide secure online forms to report these transactions. They include:
- large cash transactions of $10,000 or more in a single transaction;
- two or more transactions of less than $10,000 that total $10,000 or more in a 24-hour period (known as the 24-hour rule);
- electronic funds transfers ($10,000 or more);
- suspicious and attempted suspicious transactions; and
- transactions involving terrorist property (unlike the others, these must be reported on paper, not online).
You have to identify each of your clients when you:
- receive $10,000 or more in cash
- sell or cash traveller's cheques, money orders, or anything similar of $3,000 or more
- exchange currency of $3,000 or more
- send money transfers of $1,000 or more
- suspect that any transaction or attempted transaction, of any amount, is related to money laundering or terrorist financing.
You also have to determine if your client is a:
- politically exposed foreign person (PEFP)
If you send or receive an international money transfer of $100,000 or more, you are required to check if your client is a PEFP. A PEFP is an individual who holds or has held certain senior government positions in foreign countries. If your client is a PEFP, you have to keep certain records.
- third party
When you conduct a large cash transaction, you have to determine if your client is doing the transaction for someone else. If so, you have to keep certain records about that person, who is known as the third party.
You enter into a business relationship when you conduct two or more transactions in which you have to:
- Ascertain the identity of the individual; or
- Confirm the existence of a corporation or entity.
You have to keep records related to your clients and certain transactions. Some of the records you have to keep are:
- Large cash transaction records
- Foreign currency exchange transaction tickets
- Client credit files
- Records for money orders cashed in the amount of $3,000 or more
- Records for money transfers in or outside Canada of $1,000 or more
- Copies of suspicious transaction reports
- Records on beneficial ownership, control and structure
- Records of the purpose and intended nature your business relationships
- Records on the measures you take to monitor your business relationships and the information you obtain as a result of your monitoring
A full list of records is available on our website.
You have to develop a written set of practices to make sure you are complying with the law. These practices have to include:
- appointing a compliance officer;
- writing and applying compliance policies and procedures;
- assessing and writing down the risks of your business being used for money laundering or terrorist financing;
- ongoing training for employees in compliance measures, using a written training program; and
- reviewing and documenting the success of all of these practices.
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is an agency of the Government of Canada. It ensures compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
Our services are available in English and French.
If you wish to register your MSB, please complete the Pre-registration form.
For all other questions related to MSB, you may contact us in the following ways:
Telephone: 1-866-346-8722 (toll free in North America)
Financial Transactions and Reports Analysis Centre of Canada
24th Floor, 234 Laurier Avenue West
Ottawa, ON K1P 1H7
- Date Modified: