At any given time, billions of dollars are being moved between accounts around the world. In most cases, these transactions involve trades in real estate, paying bills, transferring funds to family members, purchasing goods, or donating to a favourite charity.
However, there are instances when large sums of money are being moved for nefarious reasons, such as money laundering or to fund terrorism.
To help monitor, identify, and deter the financing of these and other illegal activities, the Canadian government launched the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) in 2000.
What is FINTRAC?
FINTRAC was established as part of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (S.C. 2000, c. 17). It operates independently at the federal level and is under the purview of Canada’s Minister of Finance. FINTRAC’s headquarters is located in Ottawa, Canada, with offices in Toronto, Montreal, and Vancouver.
The agency works to protect the integrity and security of Canadian financial activity by monitoring suspicious behaviour and collecting data on the parties involved, whether they’re individuals, businesses, or other entities.
As part of a government organization, FINTRAC must comply with all relevant regulations, including the Privacy Act, which specifies that personal information can only be used for the purpose it was collected. FINTRAC must protect all personal data from unauthorized disclosure. Individuals on file can access their information to make any necessary corrections.
FINTRAC must also comply with the Access to Information Act. Under this Act’s regulations, government information must be available to the public on demand. In the 2020 – 2021 reporting period, FINTRAC released information pertaining to 2,046 cases of actionable intelligence related to money laundering and terrorist funding organizations.
How does FINTRAC collaborate with law enforcement?
It’s important to note that FINTRAC is not a law enforcement agency and does not have the power to detain, question, or arrest individuals suspected of financial crimes. Instead, it assists law enforcement and security agencies by sharing intelligence and leads when federal financial crimes are suspected. FINTRAC data is crucial to supporting criminal investigations and securing prosecution in court.
FINTRAC analyzes and reviews more than 25 million transaction reports every year. These reports contain detailed information on large cash financial transactions, international electronic funds transfers, and cross-border movement of currency and other monetary forms. If FINTRAC agents feel that information in the report suggests reasonable grounds to launch an investigation, they are authorized to disclose it to the police, Border Services Agency, Canada Revenue Agency, or other relevant law enforcement officials, depending on the type of offence. For example, if the information raises concerns that the transaction is a threat to the security of Canada, FINTRAC will inform the Canadian Security Intelligence Service (CSIS).
Sometimes, law enforcement will require more information than what was in the initial disclosure. FINTRAC will disclose any remaining content with a court order in these cases.
Does FINTRAC work on an international level?
The growth in world travel, global trade, and immigration, combined with the rise of electronic financial transaction technology, have helped organized crime and terrorist groups grow. FINTRAC was able to take on a leadership role in fighting illegal financial activities on an international level upon joining the Egmont Group of Financial Intelligence Units in 2002.
The Egmont Group is a global network of financial organizations that includes the Financial Crimes Enforcement Network in the United States, the National Crime Agency in the U.K, and the Asia-Pacific Group on Money Laundering. Member agencies are empowered to exchange financial intelligence with their international counterparts. These investigations help fight financial crimes on a global scale.
Who must send suspicious financial activity to FINTRAC?
Under the law, the following persons and entities must report to FINTRAC any attempted or completed suspicious financial transactions, terrorist properties, cash transactions or international electronic funds transfers of $10,000 or more, and other activity that could be related to money laundering or terrorist financing:
- Financial institutions (banks, credit unions, etc.)
- Life insurance companies, brokers, or agents
- Securities dealers, portfolio managers, and investment counsellors who are provincially authorized
- Foreign exchange dealers and other alternative cash remittance systems
- Accountants and accounting firms, when fulfilling certain services for their clients
- Real estate brokers and sales representatives, when fulfilling certain services for their clients
- Real estate developers
- Casinos (excluding specific temporary charity casinos) authorized to do business in Canada that offer slot machines, roulette, or card games
- Agents of the Crown, when they sell money orders
- British Columbia notaries public and notary corporations of British Columbia
In addition, any individual, whether a Canadian citizen or not, or entity importing or exporting Canadian currency or monetary instruments of $10,000 or more, must file a report with the Canada Border Services Agency.
Can I make a voluntary report to FINTRAC?
Individuals can provide information about suspicions of money laundering or terrorist financing to FINTRAC.
If you need legal advice before making your report to FINTRAC, please call Shnier Mackenzie Law & Policy Consulting, PC, at 416-781-0800 for a free consultation.