What is Money Laundering?

Money laundering is the process whereby 'dirty money', produced through criminal activity, is transformed into 'clean money' whose criminal origin is difficult to trace. Criminals do this by disguising the sources, changing the form, or moving the funds to a place where they are less likely to attract attention.

The money earned from criminal activity (proceeds of crime) can originate from all kinds of designated offences. These include, but are not limited to illegal drug trafficking, bribery, fraud, forgery, murder, robbery, counterfeit money, stock manipulation, tax evasion, and copyright infringement.

If you are a reporting entity and money laundering is suspected through the processing of a financial transaction, FINTRAC needs to know.

Terrorist financing may involve funds raised from legitimate sources, such as personal donations and profits from businesses and charitable organizations, as well as from criminal sources, such as the drug trade, the smuggling of weapons and other goods, fraud, kidnapping and extortion. 

  Threats to the security of Canada are defined in the Canadian Security Intelligence Service Act as: 

1. espionage or sabotage that is against Canada or is detrimental to the interests of Canada or activities directed toward or in support of such espionage or sabotage;

2. foreign influenced activities within or relating to Canada that are detrimental to the interests of Canada and are clandestine or deceptive, or involve a threat to any person;

3. activities within or relating to Canada directed toward or in support of the threat or use of acts of serious violence against persons or property for the purpose of achieving a political, religious or ideological objective within Canada or a foreign state; and,

4. activities directed toward undermining by covert unlawful acts, or directed toward or intended ultimately to lead to the destruction or overthrow by violence of the constitutionally established system of government in Canada, 

5. but does not include lawful advocacy, protest or dissent, unless carried on in conjunction with any of the activities referred to in paragraphs (a) to (d).

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is an agency of the Government of Canada responsible for facilitating the detection, prevention and deterrence of money laundering, terrorist activity financing and other threats to the security of Canada.

FINTRAC receives reports from financial institutions and intermediaries, analyzes and assesses the reported information, and disclose suspicions of money laundering or of terrorist financing activities to police authorities and others as permitted by the Act. FINTRAC will also disclose to CSIS information that is relevant to threat to the security of Canada.

The analysis of information that FINTRAC receives from reporting entities facilitates the investigation and prosecution of money laundering offences and terrorist financing offences. FINTRAC's analysis is a vital tool to law enforcement, and strikes a balance between privacy and enforcement needs.

What is Fintrac responsible for?

FINTRAC monitors monetary transactions to identify and prevent illegal activities such as money laundering and funding to terrorist organizations. FINTRAC stands for Financial Transactions and Reports Analysis Centre of Canada.

Does Fintrac report to CRA?

To ensure the new requirement imposes no added burden or red tape, reporting entities will submit EFTs electronically to both FINTRAC and the CRA simultaneously.  Reporting entities will continue to enroll only with FINTRAC. If you have any questions related to EFT reporting requirements, call the CRA at 1-800-959-5525.

What is AML ATF?

Banks have adopted an Anti-Money Laundering and Anti-Terrorist Financing Policy ("Policy") to help facilitate compliance with all applicable regulatory requirements relating to anti-money laundering("AML") and anti-terrorist financing ("ATF") in each country they operate.

Does FINTRAC freeze funds? 

FINTRAC DOES NOT freeze or seize funds. 

Does FINTRAC issue clearance certificates to prove that funds are not related to criminal or terrorist activity? 

FINTRAC does not issue clearance certificates for any reason. The Canadian government does not issue clearance certificates for the purpose of clearing funds under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. There is no government agency in Canada that issues such certificates for the purpose of clearing financial transactions for anti-money laundering and anti-terrorist financing.

Can FINTRAC provide confirmation that a reporting entity follows Canada's anti-money laundering and anti-terrorist financing legislation?

No. FINTRAC does not provide certification, endorsement, accreditation or any other type of confirmation regarding a reporting entity's obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.