Suspicious Transactions, Large Receipts and Listed Property

Suspicion requires facts and context

A suspicious transaction report, or STR, is required for a completed or attempted financial transaction where reasonable grounds to suspect connect it with money laundering, terrorist activity financing or a sanctions evasion offence. There is no minimum dollar amount.

Reasonable grounds to suspect are more than a hunch and less than proof that a crime occurred. Assess the facts, context and relevant indicators, then explain how they support the suspicion. Avoid assumptions based solely on ethnicity, nationality or unfamiliarity with a customer's business.

Insurance indicators can include payments through unexplained third parties, transactions inconsistent with known resources, unusual concern about reporting thresholds or a rapid surrender with no plausible economic reason. Any one indicator needs context. Early surrender can have an innocent explanation, such as an unexpected financial need.

Filing the STR

• FINTRAC's reporting guidance requires submission as soon as practicable after completing measures that establish the reasonable grounds to suspect. Do not invent a fixed 24-hour or 72-hour deadline, or wait for police to prove the offence.

• Describe the transaction, parties, amounts, dates, observed behaviour and relevant explanation. Clearly distinguish known facts from your interpretation. A bare sentence saying “the client seems suspicious” does not provide a useful rationale.

• An employee should follow the employer's process, but employee STR obligations also exist. Where the employer is reporting as required, FINTRAC does not require a duplicate employee report. A service provider can assist with submission without removing the reporting entity's responsibility.

Take the applicable reasonable measures to verify identity before an STR, except where doing so would tip off the person or prejudice the investigation under the relevant rule. Do not ask unusual questions merely to announce that a report is being prepared.

Disclosure restrictions

The Act prohibits disclosure of an STR's existence or contents with intent to prejudice a criminal investigation, whether or not an investigation has begun. Protect the report and avoid alerting the client to it.

This is different from an absolute ban on every internal compliance discussion. Authorized staff may need to assess and submit the report. Restrict access, follow lawful procedures and avoid unnecessary disclosure.

Do not threaten a client with reporting to force a purchase or obtain a fee. Reporting serves the statutory purpose and is not a bargaining tool. Good-faith reporting has legal protection, but false or reckless statements are not sound compliance practice.

Large cash reports

A large cash transaction report, or LCTR, applies to receiving at least $10,000 in cash in a single transaction, subject to applicable rules and exceptions. Cash means the relevant coins and notes, including foreign currency; a cheque or bank transfer is not cash merely because it is liquid money.

The 24-hour aggregation rule also applies to qualifying receipts totalling at least $10,000 within a consecutive 24-hour window where the required connection exists: the same conductor, the same person on whose behalf transactions occur or the same beneficiary.

Suppose the same client pays $6,000 in cash at 10 a.m. and $4,000 at 3 p.m. The total is $10,000 within 24 hours, so the aggregation rule is relevant. “Each payment is under $10,000” does not avoid the duty.

Submit the LCTR within 15 calendar days after the day of receipt. Separate identification, third-party determination and record duties also apply. An agency's policy refusing cash payments can reduce exposure, but it is not a national statute banning all life cash premiums.

Virtual currency and other transfers

Receiving virtual currency equivalent to at least $10,000 can trigger a large virtual currency transaction report, including qualifying 24-hour aggregation. The reporting deadline is five working days after the day of receipt.

Convert foreign cash and virtual currency according to the prescribed valuation requirements. Do not combine unlike assets indiscriminately under one invented threshold. Use the guidance for the actual report and transaction.

Certain entities and activities have international electronic funds transfer reporting duties. Ordinary payment of an insurance premium by bank transfer does not automatically mean the life agent must submit an electronic funds transfer (EFT) report; additional financial-entity activities require their own assessment.

A mandatory large-receipt report does not prove suspicion. Where reasonable grounds to suspect also exist, an STR can be required alongside the threshold report. Conversely, a suspicious attempted transaction can require an STR even if no money was received.

Listed person or entity property

The current Listed Person or Entity Property Report addresses property subject to specified terrorist or sanctions disclosure duties. It is broader than older material referring only to a terrorist property report.

Where the relevant disclosure duty under the Criminal Code or specified sanctions legislation is triggered, submit the FINTRAC property report immediately and make the required disclosure to the appropriate RCMP or CSIS recipient under the applicable framework. The precise threshold and duty depend on the law or order involved.

A completed or attempted transaction is unnecessary for this property report: possession or control of qualifying property can be enough. Do not complete a prohibited transaction involving listed property. Escalate promptly and follow applicable restrictions rather than treating an STR as authorization to proceed.

Assess a separate STR when an attempted or completed transaction also meets reasonable grounds to suspect. A property report and an STR answer different legal questions and may both be needed.

Source checkpoint

FINTRAC provides current STR guidance, cash reporting rules and listed-property guidance. Keep thresholds, currencies, deadlines and disclosure restrictions distinct.