2.4 FINTRAC & Anti-Money Laundering Compliance
Key Takeaways
In a covered purchase or sale, the reporting entity operates the compliance program. Employees perform assigned duties and have a suspicious transaction reporting obligation alongside the employer.
Identify the parties covered by the applicable record or transaction trigger. Corporate identity and beneficial ownership are separate checks, and a corporation’s directors and qualifying 25% owners or controllers are different information.
Qualifying receipts of at least $10,000 CAD in cash or equivalent virtual currency can be reportable singly or in a documented static 24-hour window. Apply the correct reporting deadline for the payment type.
File an STR as soon as practicable after taking measures that establish reasonable grounds to suspect money laundering, terrorist financing or sanctions evasion. A listed-property disclosure can require immediate reporting even without a transaction.
Keep the required records for the right period. Report copies, receipt records and client information records can start their five-year clocks on different days.
Who is responsible
Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its Regulations govern this work. The real estate broker and sales representative requirements apply when acting as an agent in a purchase or sale of real estate, including if the service earns no commission. FINTRAC’s sector guidance also describes the separate test for developers. Start with the activity and the role before applying the purchase or sale rules to a file.
In an employing brokerage, the employer operates the program and remains responsible when employees do verification, keep records or submit reports for it. Both the reporting entity and its employees have the suspicious transaction reporting obligation. FINTRAC does not expect duplicate reports when the employer actively files. An employee who believes the employer failed to report as required is expected to file. Use the brokerage’s designated escalation route, preserve the observations and confirm the required action.
Why a property transaction can attract financial crime
Placement introduces criminal proceeds into the financial system. Layering moves or disguises funds, for example through linked entities or unexplained changes in who pays. Integration gives the proceeds an appearance of legitimacy, such as receiving the proceeds of a later sale. Terrorist financing can involve legitimately obtained funds. An unexplained payer or cancellation request is an indicator to evaluate with the file context. Record observable facts, separate what the client told you from what you independently confirmed, and check whether the explanation resolves the discrepancy.
Maintain an effective compliance program
| Required element | Application |
|---|---|
| Compliance officer | Appoint a person to implement the program, give them authority and establish an escalation route. |
| Written policies and procedures | Keep them current and approved at the applicable senior level. Define verification, reporting, retention and the aggregation window. |
| Risk assessment and mitigation | Document risks in customers, geography, services and delivery channels. Apply prescribed special measures to high-risk business relationships. |
| Ongoing written training | Keep a written training plan and train relevant personnel and agents on the requirements they carry out. Practise a scenario such as an unknown third-party payer. |
| Effectiveness review | Keep a written review plan, test the program at least every two years and document the results and follow-up. Use an internal or external auditor, or conduct the review yourself if you have no auditor. |
A review can sample completed files and check whether the verification evidence, reporting times and risk decisions match policy and law. Updating an old policy alone does not test what staff did. FINTRAC can examine compliance and assess administrative monetary penalties for qualifying violations.
Verify the person or entity and establish who is behind it
Keep an information record for each client represented and each unrepresented party in the purchase or sale, subject to the prescribed exceptions. An information record or receipt-of-funds obligation generally calls for verifying an individual at the transaction and a corporation or other entity within 30 days after the transaction day. On receipt of funds from another representative’s client, the representative with that relationship is generally responsible for that client’s receipt-of-funds record and related verification. Check the separate cash, virtual currency and suspicious transaction rules when they also apply.
- Government photo ID method. Use authentic, valid, current photo ID issued by a qualifying government. Match its name and photo to the person. Remote verification requires authenticating the document and confirming it belongs to the person. A scan by itself does not do both.
- Credit file method. Use a Canadian credit file in existence at least three years that draws from more than one source. Confirm the person’s name, address and date of birth.
- Dual-process method. Use two different reliable sources to match two prescribed combinations: name and address, name and date of birth, or name and a qualifying financial account. Other prescribed reliance methods have their own conditions.
- Entity verification. Confirm existence and name with qualifying records. For an ordinary private corporation, obtain the names of directors, the names and addresses of individuals who directly or indirectly own or control at least 25% of the shares, and information establishing ownership, control and structure. Obtain the prescribed details for trusts or other entities and take reasonable measures to confirm accuracy. Certain trusts and other entities have different requirements.
Suppose one person owns 30% of the private corporate buyer and the other shares are widely distributed. A registry record may establish that the corporation exists. The 30% owner still belongs in the beneficial ownership information, and the brokerage must take reasonable measures to confirm the information. If nobody reaches the threshold, document how that was determined. If required information cannot be obtained or confirmed, take reasonable measures to verify the chief executive or equivalent and apply the prescribed high-risk special measures. Ask separately about a third party directing or funding a transaction when the rule requires a determination. Ownership of the corporation and authority over a particular payment answer different questions.
The first required verification of a client generally establishes a real estate business relationship. Monitor it, keep information current and apply enhanced measures where required. Politically exposed person and head of international organization rules apply at specified points in business relationships and to a qualifying cash or virtual currency receipt of at least $100,000 CAD or equivalent. For applicable foreign politically exposed persons and certain related people, or a domestic politically exposed person or head of an international organization with the requisite high-risk finding, transaction measures can include establishing the sources of the payment and wealth and ensuring senior management review within 30 days of the transaction day. A property's asking price alone does not trigger the large-receipt test.
Choose the report by its trigger
| Report | Trigger in a covered file | When to submit |
|---|---|---|
| Large Cash Transaction Report (LCTR) | Receive at least $10,000 CAD in physical cash, singly or through qualifying aggregation, subject to the prescribed exceptions. A bank draft can require a receipt record without being physical cash. | Within 15 calendar days after the day of receipt. |
| Large Virtual Currency Transaction Report (LVCTR) | Receive virtual currency worth at least $10,000 CAD, singly or through qualifying aggregation. Treat it as received when it cannot be reversed or cancelled, and use the exchange rate established in the normal course of business. Apply the applicable exceptions. | Within five working days after the day of receipt. |
| Suspicious Transaction Report (STR) | Reasonable grounds to suspect that a completed or attempted transaction relates to money laundering, terrorist activity financing or sanctions evasion. Any amount may qualify. | As soon as practicable after taking measures that enable those grounds to be established. Take reasonable steps to verify identity before reporting, subject to exceptions such as risking alerting the person. |
| Listed Person or Entity Property Report | A disclosure obligation applies to the property under the specified Criminal Code or sanctions provisions. A transaction is unnecessary. | Immediately to FINTRAC, in addition to any disclosure the underlying law requires. It replaced the Terrorist Property Report in March 2025. The reporting scope expanded again in October 2025. |
For cash and virtual currency, apply each type’s documented static window and aggregate where you know the transactions share a conductor, the person or entity on whose behalf they were conducted, or a beneficiary. With a daily 9 a.m. start, $6,000 cash from the same buyer Tuesday at 2 p.m. and $5,000 Wednesday at 8 a.m. total $11,000 in one window. At 10 a.m. on Wednesday the second receipt falls in the next window, even though the receipts are just 20 hours apart. Still assess the conduct for suspicion across windows. At the applicable large-transaction threshold, check the separate identity and recordkeeping duties. More than one report can apply to the same facts.
An attempted payment using multiple unrelated payers, an implausible explanation and an abrupt change after verification questions may jointly establish reasonable grounds to suspect. Record who did what, when and why the facts are suspicious. Continue to handle the file confidentially. Section 8 of the Act prohibits disclosing that an STR was, is being or will be made, or its contents, with intent to prejudice a criminal investigation, whether or not an investigation has started. The ordinary request for required identification does not itself disclose an STR.
Keep records on their own clocks
The real estate sector generally keeps information records for five years from the last business transaction. Keep required receipt-of-funds and large cash or virtual currency transaction records and copies of the large transaction reports for at least five years from creation. Keep a copy of an STR or listed-property report at least five years after submission. Have the required records available to FINTRAC within 30 days of a request. The federal duties operate alongside Alberta’s brokerage and privacy rules. A record used for both purposes must survive every applicable retention period.
FINTRAC real estate guidance · Federal regulations · 24-hour rule · Federal Act, section 8
A brokerage represents a private Alberta corporation that buys a house. The incorporation record confirms its legal name, and one individual directly owns 30% of its shares. No exemption applies. What does the brokerage still need to do?
Keep only the incorporation record because confirming the corporate name also confirms who controls the buyer.
Obtain the prescribed director, ownership, control and structure information, including the 30% owner’s name and address, and take reasonable measures to confirm the information.
Record the names of all shareholders but omit addresses and wait until after closing to decide whether the corporation exists.
Identify only the person who signs for the corporation because that person is always its beneficial owner.
A brokerage uses a static cash-reporting window from 9 a.m. to just before 9 a.m. the following day. The same buyer pays $6,000 in cash on Tuesday at 2 p.m. and $5,000 in cash on Wednesday at 8 a.m. There is no exemption. What is the resulting large transaction reporting duty?
Neither payment reaches the threshold, so no report is required.
File only an STR because two payments automatically establish reasonable grounds to suspect.
Aggregate the $11,000 and file an LCTR within 15 calendar days after the day of the reportable receipt.
Treat the payments as virtual currency and file within five working days.
A buyer’s attempted $7,000 payment uses two unexplained payers. After following the brokerage’s procedures, an employee documents reasonable grounds to suspect sanctions evasion and believes the employer did not file the required report. What should the employee do?
Wait until the funds are received and reach $10,000.
Wait for proof of a sanctions offence before reporting.
Tell the buyer that the brokerage is filing an STR and seek the buyer’s approval.
Submit an STR to FINTRAC as soon as practicable, following applicable verification and confidentiality requirements.
Sections you finish are checked off in the contents.