What Is FINTRAC Compliance? Anti-Money Laundering Digital Requirements for Canadian Businesses

FINTRAC — the Financial Transactions and Reports Analysis Centre of Canada — is Canada's financial intelligence unit, responsible for collecting, analyzing, and disclosing financial intelligence to help detect and prevent money laundering and terrorist financing. FINTRAC compliance requires businesses in "reporting entity" sectors to implement specific client identification, transaction monitoring, record-keeping, and reporting procedures — all with significant IT implications.

Who must comply with FINTRAC?

FINTRAC reporting entities include:

• Real estate brokers and agents — for transactions involving property purchases (since June 2021, all transactions require client identification)
• Law firms and notaries — for real estate, corporate, and trust transactions handling client funds
• Accountants and accounting firms — for activities including managing client funds, securities, and real estate transactions
• Money services businesses — currency exchange, crypto asset dealers, electronic funds transfer businesses
• Financial institutions — banks, credit unions, insurance companies
• Dealers in precious metals and stones

FINTRAC record-keeping requirements and IT implications

FINTRAC requires reporting entities to maintain specific records for prescribed periods:

• Client identification records — 5 years from the date of last business relationship transaction
• Transaction records — 5 years from the date of the transaction
• Business relationship records — 5 years from the date the business relationship ends
• Large cash transaction reports (LCTRs) — transactions of $10,000+ in cash must be reported to FINTRAC within 15 days
• Suspicious transaction reports (STRs) — reported as soon as practicable after STR determination, no deadline exception

Records must be kept in a format that can be readily produced and must be available to FINTRAC upon request. Paper records converted to electronic format must maintain the same content and be retrievable.

FINTRAC compliance for real estate

Canadian real estate brokers and agents must:

• Verify identity of all clients before completing a transaction (not just at transaction close)
• Perform ongoing monitoring of business relationships
• Assess each transaction for money laundering/terrorist financing risk
• Maintain client identification records for 5 years after the last transaction
• File LCTRs for cash transactions of $10,000 or more

Software supporting FINTRAC compliance for real estate includes Lone Wolf Technologies, BrokerBay, and specialized AML platforms like Merces.

FINTRAC compliance for law firms

Law firms handling real estate, corporate, and trust transactions must implement:

• Client Due Diligence (CDD) procedures for covered activities
• Matter-specific record-keeping in the firm's practice management software (Clio, PCLaw, Soluno)
• Documentation of identity verification methods used for each client
• A compliance program including a designated compliance officer, written procedures, ongoing training, and regular effectiveness reviews

Related glossary terms

• PIPEDA — Federal privacy law
• OSFI Cybersecurity Guidelines
• BDR — Backup and Disaster Recovery
• SLA — Service Level Agreement
• vCISO — Virtual CISO

How Outsource IT Canada can help

• Managed IT Services — 24/7 monitoring and flat-rate IT support for Canadian businesses
• Cybersecurity Services — EDR, MDR, dark web monitoring, and incident response
• PIPEDA Compliance — privacy impact assessments and breach notification procedures
• Get a free assessment — call (416) 623-9677