Electronic Funds Transfer Reports (EFTR) – A number of changes were made to the EFTR requirements proposed in the Draft Regulations in the Final Regulations aiming to clarify the fact that such requirements are intended to apply only to non-domestic EFTs. If you are a financial entity, a money services business or a casino, you have to send a report to FINTRAC for the following transactions: 1. As long as the first person to get the instruction gives the final sending person the name and the address of the originator it’s the final sending person that reports the transaction. On this basis, REs will need to completely restructure their respective EFT reporting processes. (January 1997) 2. The other reporting requirement for EFTs covers EFTs that are the transmission of instructions for a transfer of funds through any electronic, magnetic or optical device, telephone instrument or computer. As a reporting entity, you have to be enrolled with FINTRAC's electronic reporting system to report electronically. Lawyer Jacqueline Shinfield, an expert in FINTRAC regulations, says financial institutions need to be prepared for some sweeping changes in the ways Electronic Funds Transfers (EFTs) are done in Canada. All batch header records are to be fixed in length as specified in the format descriptions. So that’s a huge change for organizations other than banks in the reporting.”, The definition of an EFT used to include only cross border transfers, now they’ve taken that out and given a definition of an international EFT which is basically an EFT that goes into Canada, Shinfield explained. There are also requirements relating to virtual currencies that apply to other types of reporting entities, including record-keeping, identification and reporting requirements for large virtual currency transactions (i.e., the receipt of $10,000 or more in a single transaction), subject to certain exceptions. These are instructions sent electronically for the transfer of $10,000 or more outside Canada at the request of a client in the following manner: in two or more transfers of less than $10,000 (that total $10,000 or more) in the following 24-hour rule situations: if you are an entity, your employee or senior officer knows the transfers were made within 24 consecutive hours of each other by or on behalf of the same individual or entity; or. There is also a new requirement that requires reporting entities to verify the identity of beneficiaries of EFTs of $1,000 or more, which is a net new requirement, she said. This reporting requirement is only applicable to you if you are a financial entity or a money services business and you send or receive EFTs made at the request of a client by transmission of a SWIFT MT 103 message, as a SWIFT member, through the SWIFT network. if you are an individual, you know the transfers were made within 24 consecutive hours of each other by or on behalf of the same individual or entity. She also fully explained the changes in a recent ACAMS podcast. There is also a new requirement that requires reporting entities to verify the identity of beneficiaries of EFTs of $1,000 or more, which is a net new requirement, she said. 3. One of those measures called for the reporting of international electronic funds transfers (EFTs) of $10,000 or more to the CRA, for use in the administration of the, FINTRAC is not involved in the use, disclosure or retention of the EFTRs sent to the CRA. Shinfield said the way that it is structured today, you have two regulated entities involved in the transaction and the money is going across the border. Shinfield spoke about the changes at a recent ACAMS conference in Toronto and wrote about the subject in a legal blog. Alessa is Growing! Simplifying Compliance and Fraud Prevention, FINTRAC Changes Reporting Requirements for EFTs. The number followed by a slash, '/' must be followed by an Address Line (Address Line can be used to provide for example, street name and number, or building name). The definition of an EFT has changed with the amended regulations and reads as such: An electronic funds transfer means the transmission by any electronic, magnetic or optical means of instructions for the transfer of funds, including a transmission of instructions that is initiated and finally received by the same person or entity. Important note specific to Electronic Funds Transfer (EFT) reporting: The number followed by a slash, '/' must be followed by the ISO country code, a slash '/' and the Place of Birth. EFT Reporting. These are instructions sent electronically for the transfer of $10,000 or more outside Canada at the request of a cli… The number followed by a slash, '/' must be followed by the ISO country code, a slash, '/', the issuer of the number, a slash, '/' and the Customer Identification Number. This report must contain, among other things, the following information on the client ordering the payment of the EFT (i.e., tag :50:) referred to in Schedules 2 and 3 of the PCMLTF Regulations: Although the Society for Worldwide Interbank Financial Telecommunication (SWIFT) allows its members to choose between three options to fill out tag :50:, i.e., options A, F and K, only options F and K do provide the information that is mandatory for these reports. FINTRAC web reporting (F2R) You are accessing a Government of Canada information system. A casino disbursement report must be submitted to FINTRAC by a casino when it makes a disbursement of $10,000 or more in the course of a single transaction, or upon making two or more disbursements totalling $10,000 or more within 24 consecutive hours on behalf of the same individual or entity. in two or more transfers of less than $10,000 (that total $10,000 or more) if your employee or senior officer knows they were made within 24 consecutive hours of each other by or on behalf of the same individual or entity (24-hour rule). According to FINTRAC, if you are a financial entity, a money services business (MSB) or a casino, you will have to report certain electronic funds transfers (EFTs). The reporting requirements for international EFTs involving multiple entities have also changed. There are some specific exclusions from the definition of an EFT that are particularly relevant given the changes made to the reporting requirements … In that regard, the proposed amendments add new recordkeeping and client identification requirements, similar to those that already exist for EFTs, when an MSB either: Transmits an amount of C$1,000 or more at the request of a person or entity, other than in the case of an EFT; or reporting requirements. For more information on how to submit EFTs to the CRA through the shared reporting process, go to Reporting to FINTRAC on the FINTRAC website. The EFT reporting requirements for the CRA and FINTRAC are identical. However, the requirements in respect of EFTs still apply to MSBs. The reporting requirements now apply in regards to both outgoing EFTs to the RE that initiates the EFT, and incoming EFTs to the RE that is the final recipient of the EFT. For additional information about this as well as timeframes, means of reporting, EFTs in foreign currency and other requirements associated with EFTs, consult Guideline 8: Submitting Electronic Funds Transfer Reports to FINTRAC. • MSBs and FSMBs, along with other financial entities, are now required to verify the identity of a beneficiary of EFTs of $1,000 or more (in addition to the identity of the initiator or remitter). Corporate information reporting requirements are in place at the federal and provincial levels; however, there are differences between jurisdictions in requirements related to the collection, disclosure, and access to this information. “And on the converse side when the money comes into the country it’s the first organization to touch it.”. In terms of EFTs, Shinfield said regulators have “changed the whole reporting scheme.” “So for banks it will have probably a more favorable effect than others but for others it’s going to have huge operational implications.”. All rights reserved. FINTRAC will provide you with an identifier number to include in your reports. When you send or receive instructions to transfer $10,000 CAD or more internationally, either in a single transaction or in multiple transactions, within a 24-hour period you must submit a report within 5 business days. In addition, transmittals of funds governed by the Electronic Funds Transfer Act (Reg E) or made through ATM or point-of-sale systems are not subject to this rule. • FINTRAC Interpretation Notices • Compliance Assessment Report Reporting • Suspicious transactions You must report where there are reasonable grounds to suspect that a transaction or an attempted transaction is related to the commission or attempted commission of a money laundering offence or a terrorist activity financing offence. The same reporting requirement applies to non-SWIFT electronic fund transfers. The requirements to report large cash transactions and EFTs are currently triggered where the transaction is for more than C$10,000 or where there have been smaller transactions over a 24-hour period that total C$10,000 or more that are conducted by, or on behalf of, the same person or entity. Please space-fill the remainder of the tag. You have to report the following transactions to FINTRAC: You send an outgoing SWIFT MT 103 message for $10,000 or more outside Canada at the request of a client in the following manner: You receive an incoming SWIFT MT 103 message for $10,000 or more sent from outside Canada at the request of a client in the following manner: These reports can only be made electronically using the batch file reporting mechanism (See Guideline 8B: Submitting SWIFT Electronic Funds Transfer Reports to FINTRAC). As a reporting entity, you have to be enrolled with FINTRAC's electronic reporting system to report electronically. On this basis, REs will need to completely restructure their respective EFT reporting processes. You send outgoing EFTs. If you receive the following SWIFT message: You should provide the aforementioned message to FINTRAC in the following format: Your reporting obligations regarding EFTs also include sending or receiving EFTs by any means, as explained in the following. Alessa is a CaseWare RCM Product. Initially, FINTRAC required only reports of international … Home Prepaid Payment Products and Accounts A structured transaction is a series of smaller transactions, which are broken up to avoid the $10,000 reporting requirements for the Bank Secrecy Act (BSA). You receive incoming EFTs. For entities that are required to report EFTs, any amount valued at CAD 10,000 or more that is sent out of Canada or received from outside of Canada on behalf of a customer is reportable to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) within 5 business days. “So all the reporting really falls to the financial institution as the last touch and the first to touch that’s gone. What this means:Previously, ML/TF regulations didn’t require intermediaries of a transaction to collect information. SWIFT means the Society for Worldwide Interbank Financial Telecommunication. Reporting entities are required to complete reports about certain transactions and property and submit them to FINTRAC. However, ongoing monitoring requirements in the drafted Guideline 6G mentions the requirement keep all client identification information up to date which will require reporting entities to monitor all their clients on an individual level to ensure identification information is up … The EFT Report and instructions and LCTR Form and instructions are available on the FINTRAC website at: www.fintrac.gc.ca Client and /or third party information, record keeping requirements mention above applied to EFT or LCTR transactions. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is Canada's financial intelligence unit. Acquisition by Tier1 Opens New Opportunities. If you are a financial entity, a money services business or a casino, you will have to report certain electronic funds transfers (EFTs) to FINTRAC. more FINTRAC These are instructions sent electronically for transfer of $10,000 or more from outside Canada at the request of a client in the following manner: In the 2013 Budget, the Government of Canada announced measures to strengthen the ability of the Canada Revenue Agency (CRA) to combat international aggressive tax avoidance and international tax evasion. What FINTRAC says about SWIFT EFTs Financial transaction reports are critical to FINTRAC’s ability to develop and disseminate financial intelligence. Shinfield said if a bank touches that money but then it’s going onward to an MSB or a foreign exchange dealer or some other party who reports EFT’s, it’s the first to touch that reports it and that’s provided they get the beneficiary name, and event issued address. Please note that as of January 1st, 2015, all EFT reporting will be done through a Shared Reporting Process that allows reporting of EFTs simultaneously to both FINTRAC and the CRA. For subfield 2 (Name & Address), you should only provide the following codes on the lines: The number followed by a slash, '/' must be followed by the name of the ordering customer (where it is recommended that the surname precedes given name(s)). The reporting requirements now apply in regards to both outgoing EFTs to the RE that initiates the EFT, and incoming EFTs to the RE that is the final recipient of the EFT. Given option F can also contain information that is not set out in Schedules 2 and 3, if your financial entity sends out or receives a MT 103 message in which option F was used, we recommend that you follow these guidelines when providing information to FINTRAC: When subfield 1 (Party Identifier) is used with the (Code)(Identifier) format, you should provide one of the following codes followed by the "/" character: However, DO NOT provide the values that follow the "/"" character. Electronic Funds Transfer Reporting Requirements 3.1 Electronic reporting enrolment. The number followed by a slash, '/' is followed by information completing the Identifier provided in subfield 1 (Party Identifier) used with the (Code)(Identifier) format. Efts no later than five working days after the day the transfer of funds within Canada. FINTRAC reporting. In the YYYYMMDD format Insights / Blog / FINTRAC changes reporting requirements EFTs. 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