A comprehensive glossary of essential FINTRAC terminology, definitions, and key concepts for AML compliance in Canada. This reference guide helps Money Service Businesses and financial institutions understand critical compliance requirements.
In FINTRAC reporting and AML compliance, understanding the flow of funds is crucial for identifying all parties involved in a transaction and assessing potential risks. The flow typically involves several key roles:
Identifying all parties in the flow of funds is essential for proper FINTRAC reporting, risk assessment, and detecting suspicious patterns. Each role may require different levels of due diligence and reporting depending on the transaction type and amount.
Anti-Money Laundering. Laws, regulations, and procedures intended to prevent criminals from disguising illegally obtained funds as legitimate income.
The person or entity that is to receive the benefit of a transaction, such as the recipient of funds in an electronic funds transfer or the final destination of a payment. The beneficiary is the ultimate intended recipient of the funds or value.
An individual who directly or indirectly owns or controls 25% or more of a corporation or entity, or who exercises direct or indirect control over the corporation or entity.
Casino Disbursement Report. Required when a casino makes disbursements of $10,000 or more to a client.
A comprehensive set of policies, procedures, and processes designed to ensure adherence to applicable money laundering and terrorist financing legislation and regulations.
The person or entity that orders or initiates a transaction, such as an electronic funds transfer or virtual currency transaction. The conductor is responsible for providing the instructions and authorization for the transaction to proceed.
A banking relationship where one bank provides services to another bank, typically in a different jurisdiction, to facilitate international money transfers and other banking services.
A type of virtual currency that uses cryptography to secure transactions and control the creation of new units, operating independently of a central bank.
Enhanced Due Diligence. Additional measures applied to higher-risk customers, transactions, or business relationships that go beyond standard customer due diligence.
Electronic Funds Transfer Report. Required for international electronic funds transfers of $10,000 or more, including both incoming and outgoing transfers.
Financial Action Task Force. An international organization that develops policies to combat money laundering and terrorist financing, and promotes their implementation globally.
Financial Transactions and Reports Analysis Centre of Canada. Canada's financial intelligence unit that collects, analyzes, and discloses financial intelligence to help detect and prevent money laundering and terrorist financing.
Head of an International Organization. A person who holds or has held the position of head of an international organization established by governments, or holds or has held a position that is equivalent to a head of state.
The person or entity that initiates an electronic funds transfer, providing the instructions for the transfer to begin. In the context of international wire transfers, the initiator is typically the person requesting the transfer.
The final stage of money laundering where the laundered funds are reintroduced into the legitimate economy in such a way that they appear to be normal business funds.
Know Your Customer. The process of identifying and verifying the identity of clients and understanding their financial activities to assess money laundering and terrorist financing risks.
The second stage of money laundering where criminals conduct complex layers of transactions to distance the illegal funds from their source and obscure the audit trail.
Large Cash Transaction Report. Required for cash transactions of $10,000 or more in a single transaction or multiple transactions totaling $10,000 or more within 24 consecutive hours.
Large Virtual Currency Transaction Report. Required for virtual currency transactions of $10,000 or more in a single transaction or multiple transactions totaling $10,000 or more within 24 consecutive hours.
Money Service Business. A business that provides money services such as foreign exchange dealing, funds transmission, or issuing or redeeming money orders, traveller's cheques or other similar negotiable instruments.
In electronic funds transfers, the person or entity that holds the account that is debited or that will be debited as a result of the electronic funds transfer instructions.
Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The primary Canadian legislation governing anti-money laundering and anti-terrorist financing requirements.
Politically Exposed Person. An individual who holds or has held a prominent public position, including heads of state, senior politicians, senior government officials, judicial officials, military officials, and senior executives of state-owned corporations.
The person or entity that sends or transmits funds to another person or entity, typically in the context of money remittance services or international money transfers.
A documented assessment of the money laundering and terrorist financing risks associated with the reporting entity's clients, business relationships, products, services, delivery channels, and geographic locations.
Economic and trade restrictions imposed by governments or international organizations to maintain or restore international peace and security, or to protect national security interests.
A bank that has no physical presence in the country where it is incorporated and licensed, and is unaffiliated with a regulated financial group.
A money laundering technique where large amounts of money are broken down into smaller, less suspicious transactions to avoid detection and reporting thresholds.
The origin of the particular funds or other assets that are the subject of the transaction. This refers to the activity that generated the funds being used, such as employment income, business revenue, investment returns, or other legitimate sources.
Suspicious Transaction Report. A report submitted to FINTRAC when there are reasonable grounds to suspect that a transaction is related to the commission of a money laundering or terrorist financing offense.
Anti-Terrorist Financing. Measures designed to detect, prevent, and disrupt the financing of terrorist activities.
Suspicious Transaction Report. A report submitted to FINTRAC when there are reasonable grounds to suspect that a transaction is related to the commission of a money laundering or terrorist financing offense.
Large Cash Transaction Report. Required for cash transactions of $10,000 or more in a single transaction or multiple transactions totaling $10,000 or more within 24 consecutive hours.
Large Virtual Currency Transaction Report. Required for virtual currency transactions of $10,000 or more in a single transaction or multiple transactions totaling $10,000 or more within 24 consecutive hours.
Electronic Funds Transfer Report. Required for international electronic funds transfers of $10,000 or more, including both incoming and outgoing transfers.
Casino Disbursement Report. Required when a casino makes disbursements of $10,000 or more to a client.
Money Service Business. A business that provides money services such as foreign exchange dealing, funds transmission, or issuing or redeeming money orders, traveller's cheques or other similar negotiable instruments.
Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The primary Canadian legislation governing anti-money laundering and anti-terrorist financing requirements.
Know Your Customer. The process of identifying and verifying the identity of clients and understanding their financial activities to assess money laundering and terrorist financing risks.
Customer Due Diligence. The process of obtaining information about customers to verify their identity and assess the risk they may pose for money laundering or terrorist financing.
Enhanced Due Diligence. Additional measures applied to higher-risk customers, transactions, or business relationships that go beyond standard customer due diligence.
Politically Exposed Person. An individual who holds or has held a prominent public position, including heads of state, senior politicians, senior government officials, judicial officials, military officials, and senior executives of state-owned corporations.
Head of an International Organization. A person who holds or has held the position of head of an international organization established by governments, or holds or has held a position that is equivalent to a head of state.
An individual who directly or indirectly owns or controls 25% or more of a corporation or entity, or who exercises direct or indirect control over the corporation or entity.
An individual or entity other than the client on whose behalf the client is acting, or the person or entity that instructs the client to conduct a transaction.
The person or entity that orders or initiates a transaction, such as an electronic funds transfer or virtual currency transaction. The conductor is responsible for providing the instructions and authorization for the transaction to proceed.
The person or entity that is to receive the benefit of a transaction, such as the recipient of funds in an electronic funds transfer or the final destination of a payment. The beneficiary is the ultimate intended recipient of the funds or value.
The origin of the particular funds or other assets that are the subject of the transaction. This refers to the activity that generated the funds being used, such as employment income, business revenue, investment returns, or other legitimate sources.
The person or entity that initiates an electronic funds transfer, providing the instructions for the transfer to begin. In the context of international wire transfers, the initiator is typically the person requesting the transfer.
In electronic funds transfers, the person or entity that holds the account that is debited or that will be debited as a result of the electronic funds transfer instructions.
The person or entity that sends or transmits funds to another person or entity, typically in the context of money remittance services or international money transfers.
A comprehensive set of policies, procedures, and processes designed to ensure adherence to applicable money laundering and terrorist financing legislation and regulations.
A documented assessment of the money laundering and terrorist financing risks associated with the reporting entity's clients, business relationships, products, services, delivery channels, and geographic locations.
Economic and trade restrictions imposed by governments or international organizations to maintain or restore international peace and security, or to protect national security interests.
A banking relationship where one bank provides services to another bank, typically in a different jurisdiction, to facilitate international money transfers and other banking services.
A bank that has no physical presence in the country where it is incorporated and licensed, and is unaffiliated with a regulated financial group.
A method or technique used to launder money or finance terrorist activities, as identified through case studies, investigations, or other analytical methods.
A money laundering technique where large amounts of money are broken down into smaller, less suspicious transactions to avoid detection and reporting thresholds.
The second stage of money laundering where criminals conduct complex layers of transactions to distance the illegal funds from their source and obscure the audit trail.
The final stage of money laundering where the laundered funds are reintroduced into the legitimate economy in such a way that they appear to be normal business funds.
A digital representation of value that can be used for payment or investment purposes, is not issued by a central bank or public authority, and can be transferred, stored, or traded electronically.
A type of virtual currency that uses cryptography to secure transactions and control the creation of new units, operating independently of a central bank.
Financial Action Task Force. An international organization that develops policies to combat money laundering and terrorist financing, and promotes their implementation globally.
An international organization of Financial Intelligence Units (FIUs) that provides a platform for the secure exchange of expertise and financial intelligence.
Understanding these terms is just the first step. Quantoflow can help you implement comprehensive FINTRAC compliance solutions tailored to your business needs.
