Guide for Electronic Registration of Money Services Businesses

This replaces the previous version of the Guide for Electronic Money Services Business Registration issued in May 2008. The changes made to this version are indicated by a side bar to the right of the modified text in the PDF version.

April 2010

Table of Contents

1. Introduction
2. How Does Registration Work?
   • 2.1 Who has to register?
   • 2.2 Who is not eligible to register?
3. The Registration Process
   • 3.1 Getting ready to register
   • 3.2 Completing and submitting the registration form
   • 3.3 After your registration form is submitted
4. Confirmation of Registration
5. Notification of Change or Newly Obtained Information
6. Clarification Request
7. Renewal of Registration
8. Cessation of Activities
9. Denial or Revocation of Registration
10. Review and Appeal Processes
11. Penalties
12. Comments?
13. How to Contact FINTRAC

Guide for Electronic Money Services Business Registration (PDF version, 146 kb) 

 

1 Introduction

This guide is for you if you are a money services business operating in Canada.
It explains the registration requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and the Proceeds of Crime (Money Laundering) and Terrorist Financing Registration Regulations. If you are a money services business, you also have other obligations under the PCMLTFA.

2 How Does Registration Work?

Since June 23, 2008, every money services business has to be registered with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). This means that it is illegal for such a money services business to operate without being registered.

If you are a money services business, you have to provide identifying information as well as other specific business information in a registration form. FINTRAC may ask for clarification of information before accepting the registration. Once FINTRAC has accepted it, the registration is valid for a two‑year period and has to be renewed before it expires. There are no fees associated with the registration or the renewal of registration.

FINTRAC may deny a registration or revoke one it has accepted if it determines that a money services business is not eligible for registration. A registered money services business has to advise FINTRAC of changes or new information about its registration information. Also, if a registered money services business ceases its activities, it has to advise FINTRAC.

2.1 Who has to register?

You have to register with FINTRAC if you are a money services business. A money services business is an individual, or a corporation, partnership or other type of entity, engaged in the business of any of the following:

• foreign exchange dealing;
• remitting or transmitting funds by any means or through any person, entity or electronic funds transfer network; or
• issuing or redeeming money orders, traveller's cheques or other similar negotiable instruments except for cheques payable to a named person or entity.

If you are engaged in the activities listed above but only as an agent for another business, you do not have to register. In this situation, that other business has to register and provide information about all of its agents. Throughout this guide, whenever the word agent is used, it includes agent or mandatary.

A money services business includes an alternative money remittance system such as Hawala, Hundi or Chitti. If you need further guidance on the meaning of "engaged in a money services business", see FINTRAC's Interpretation Notice No. 1, called Criteria for "Engaged in a Money Services Business", available from the Publications page of FINTRAC's Web site (http://www.fintrac-canafe.gc.ca).

2.2 Who is not eligible to register?

Certain individuals or entities are not eligible to register with FINTRAC and therefore, cannot operate a money services business.

The following individuals and entities are not eligible for registration:

• A listed person under section 1 of the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism. A listed person is an individual or entity that is believed to:

  • have carried out, attempted to carry out, participated in or facilitated a terrorist activity; or
  • be controlled directly or indirectly by, be acting on behalf of, at the direction of, or in association with any individual or entity conducting any of the above activities.

  You can consult a list that includes listed persons on the Office of the Superintendent of Financial Institutions (OSFI) Web site at http://www.osfi-bsif.gc.ca in the "Terrorist Listings and Sanctions" section.

• A listed entity under subsection 83.01(1) of the Criminal Code. A listed entity is a person, group, trust, partnership or fund or an unincorporated association or organization listed that is believed to :

  • have knowingly carried out, attempted to carry out, participated in or facilitated a terrorist activity; or
  • have knowingly acted on behalf, at the direction of, or in association with such an entity.

  You can consult a list of the entities that are currently listed on Public Safety Canada's Web site at http://www.ps-sp.gc.ca by searching "current listed entities" or on the OSFI Web site at http://www.osfi-bsif.gc.ca in the "Terrorist Listings and Sanctions" section.

• An individual or entity convicted of any of the following:

  • a money laundering or a terrorist activity financing offence;
  • an offence convicted on indictment under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act;
  • an offence under sections 83.18 to 83.231 of the Criminal Code related to the participation in, or the facilitation of, activities of a terrorist group, the commission of an offence for such a group, the instructing, directing or facilitating of that offence;
  • an offence under sections 354 or 467.11 to 467.13 of the Criminal Code related to the possession of property obtained from crime, the participation in activities of a criminal organization, or the commission of, or instruction to commit, an offence for such an organization;
  • a conspiracy, an attempt to commit, being an accessory after the fact in relation to, or any counselling in relation to any of the offences above.
  
  

• An individual or entity convicted of an offence on indictment or convicted more than once for fraudulent transactions relating to contracts and trade under Part X of the Criminal Code or any offences under the Controlled Drugs and Substances Act (other than offences under subsection 4(1) of that Act for possession of a substance).

Entities not eligible for registration

A corporation, a partnership or any other type of entity cannot register if the entity itself is not eligible for registration (as explained above). In addition, an entity cannot register if its senior officers or its owners are not eligible for registration, as follows:

• A corporation is not eligible for registration if its chief executive officer, its president, any of its directors or any individual or entity that directly or indirectly owns or controls 20% or more of its shares is not eligible for registration as described above.

• A partnership or any other type of entity that is not a corporation is not eligible for registration if its chief executive officer, its president, any of its directors or any individual or entity that directly or indirectly owns or controls 20% or more of that entity is not eligible for registration as described above. In the case of an entity that is not a corporation, the chief executive officer would include the individual who is the managing partner or the general manager.

3 The Registration Process

Since June 23, 2008, if you are a money services business as described in subsection 2.1, you have to be registered. If you start a new money services business after that date, you have to be registered with FINTRAC before you start your business.

Once you are registered, you have to keep your registration information up‑to‑date. You must send any newly obtained registration information or any changes to your registration information to FINTRAC within 30 days. See section 5 of this guide for more information about this. In addition, you must renew your registration every two years. To find out more about renewals, see section 7.

You must register electronically if you have the technical capability to do so. The minimum technical capabilities are as follows:

• A personal computer with the following characteristics:
  • 32 MB memory (64 MB or higher is preferable)
  • 640 x 480 VGA video display (800 x 600 or higher is preferable)
  • an operating system running a Web browser; and
• An Internet connection.

The rest of this guide explains how to register electronically. If you do not have the technical capability to register electronically, then you must do so by paper. Get the Guide for Paper Registration of Money Services Businesses and the registration form. See section 13 for information about how to contact FINTRAC or go to the Publications page of FINTRAC's Web site (http://www.fintrac-canafe.gc.ca).

3.1 Getting ready to register

You should get the information you need before you start the registration process. You have to provide information about you, your activities and your business. If you are an entity, you also have to provide specific information about certain controlling interests of your entity. In addition, if you have agents or branches, you also have to give information about them. See Appendix 3 for details of information required in a registration form.

3.2 Completing and submitting the registration form

To register electronically

To register electronically, follow the instructions in Appendix 1A to access the money services business (MSB) registration system called "MSB Registration". Then follow the instructions in Appendix 2 to complete contact maintenance, address maintenance and agent maintenance (if you have agents).

Follow the field‑by‑field instructions in Appendix 3 to complete the registration form. Drop-down menus appear wherever a code or specific selection is required. Once all the appropriate information is entered, you will be asked to complete a statement of eligibility tailored to your business' type of ownership. Read all questions carefully before answering them. Once your form is completed, you will be able to validate and submit it to FINTRAC.

3.3 After your registration form is submitted

FINTRAC will process your form within 14 days and do one of the following:

• issue a notice confirming your registration and providing your registration number;
• request clarification of information in your form; or
• deny registration.

In each case, FINTRAC will notify you accordingly.

4 Confirmation of Registration

If FINTRAC accepts your registration form, it will issue you a confirmation notice by mail. The notice indicates the expiry date of your registration along with your registration number. Your registration is valid for two years, and you have to renew it before it expires.

Once your registration is accepted, FINTRAC will post some of your registration information on its public Web site. This includes information about your agents or branches (if applicable), your registration number and expiry date of your registration. The information to be posted is indicated in each part of the registration form.

5 Notification of Change or Newly Obtained Information

Once you are registered, you must send any newly obtained registration information or changes to your registration information within 30 days. For example, if your address changes or you get a new agent for your money services business activities, you must notify FINTRAC within 30 days of the change.

To do this, you have to submit the changes electronically using the registration form. Access the registration form and select "Modify" to start a modification. Once you have made all required changes, review and submit the modified form.

See Appendix 3 for more information about changing fields in the registration form. There are certain exceptions, and these are explained in Appendix 3.

6 Clarification Request

FINTRAC can ask you for clarifications concerning the information you submitted about your business or your branches, or about your agents. Such clarifications can be requested when FINTRAC is processing your registration form or after your application for registration or renewal has been accepted. You can see an example on how to reply to a clarification request in Appendix 5.

When your registration form is being processed

After you submitted your registration form, FINTRAC can ask you for clarifications concerning the information you submitted before accepting it. For example, FINTRAC could request a clarification if information is missing, incomplete or seems inconsistent.

If FINTRAC needs to clarify information, you will receive a clarification request detailing what needs to be clarified. You have to reply to it by accessing the registration form and selecting "Clarify" to submit the registration form with the information requested to FINTRAC within 30 days. If you provide the clarification as requested, within the 30 days, FINTRAC will continue to process your form. If you do not submit a registration form with the clarification within the appropriate timeframe, FINTRAC can deny or revoke your registration and will send you a notice to that effect. See section 9 for more information about this.

After your registration form is processed

FINTRAC can also send you a clarification request after your registration form is processed. You have to reply within 30 days. If you do not, FINTRAC can revoke your registration and will send you a notice to that effect. See section 9 for more information about this.

7 Renewal of Registration

As explained in section 4, your registration is valid for two years and you have to renew it before it expires.

You can find the expiry date of your registration in the confirmation of registration notice from FINTRAC. You can also find it on the Home page after you log on to the MSB registration system. Furthermore, when the expiry date is approaching and it is time to renew your registration, FINTRAC will send you a renewal reminder.

You will have to access the registration form to start the renewal. Complete fields B9, B10, B12, and if applicable, field B13, as well as Part D. Review all other fields of the registration form and update or modify as required. For more information about the fields in the registration form, see Appendix 3.

8 Cessation of Activities

Whether you are an individual, a corporation or other type of entity, if you cease your money services business operations (as described in subsection 2.1), you must notify FINTRAC within 30 days after the day on which you cease them.

For example, David is an individual who operates a money services business. He ceases all of his money services business' activities as a sole proprietor and incorporates his new business under David 123 Inc. David has to notify FINTRAC that he ceased his activities as a registered sole proprietor within 30 days after the day on which he ceased them. David also has to register his new corporation, David 123 Inc., with FINTRAC (as explained in section 3).

For more information about the cessation form, see Appendix 4.

9 Denial or Revocation of Registration

FINTRAC can deny or revoke registration if you do not reply to a clarification request, as explained in section 6, or if you are ineligible for registration, as explained in subsection 2.2.

FINTRAC will inform you in writing of the reasons for the denial or the revocation of your registration. See section 10 for more information about review and appeal processes.

10 Review and Appeal Processes

If your registration is denied or revoked, you can ask for a review of the decision by writing to the Director of FINTRAC. Send your letter to:

Director of Financial Transaction Reports and Analysis Centre of Canada
Attention: Review and Appeals Unit
234 Laurier Avenue West, 24^th Floor
Ottawa, ON
K1P 1H7

You may also send your request for review by email at:
rev-app@fintrac-canafe.gc.ca.

Review by the Director

You have 30 days from the day you receive the denial or revocation notice to request the review by the Director of FINTRAC. You should include with your request any additional relevant information you wish to be considered. For example, on March 11, 2010, Money 123 Inc. received a decision from FINTRAC to revoke its registration. Money 123 Inc. had until April 10, 2010 to apply for a review of its revocation to the Director of FINTRAC.

You will be notified in writing of the results of the review. If you are not satisfied with the results of the review, you can appeal the decision to the Federal Court, as explained below.

If you do not receive notification of the results of the Director's review within 90 days of your request, you have the right to appeal to the Federal Court.

Appeal to Federal Court

As explained above, if you have been notified of the results of the review by the Director but are not satisfied with the review decision, you can appeal to the Federal Court. You have to do so within 30 days after the day the review decision is issued to you, or within a longer period that the Court may allow.

If you have not received notification of the results of the review by the Director within 90 days after the day you requested it, you have the right to appeal to the Federal Court. You have to do so within 30 days after the 90‑day period to review the decision for denial or revocation of registration expires.

For example, on March 27, 2010, Money 123 Inc. applied in writing to the Director for a review of the decision to revoke its registration. FINTRAC received the application for review on April 1, 2010. The Director of FINTRAC had to provide a decision about the review and inform Money 123 Inc. by June 30, 2010. If the Director had not made a decision by that date, Money 123 Inc. would have up to July 30, 2010 to appeal the decision about its revocation to the Federal Court.

The court will take every reasonable precaution during an appeal to avoid any unauthorized disclosure of information by itself or any person or entity. The Court may conduct hearings in private when appropriate.

11 Penalties

Failure to comply with your legislative requirements can lead to criminal charges against you. If you do not register your money services business as required, if you knowingly make a false or misleading statement or if you knowingly provide false or misleading information to FINTRAC related to your registration and the maintaining of it, you could be convicted to a maximum of five years imprisonment, to a maximum fine of $500,000, or both.

Failure to comply with your legislative requirements can lead to an administrative monetary penalty against you for each of the following:

• Failure to register your money services business with FINTRAC when required to do so.
• Failure to submit information as required in a registration form and, if applicable, information about your agents or branches.
• Failure to submit as required any newly obtained registration information or any changes to your registration information.
• Failure to reply as required to a clarification request from FINTRAC within 30 days after the request is made.
• Failure to submit information as required in a registration form to renew your registration before it expires.
• Failure to notify FINTRAC as required that you ceased your activities for which you are registered within 30 days after the day on which you cease them.

12 Comments?

This guide will be reviewed on a periodic basis. If you have any comments or suggestions to help improve it, please send your comments to the mailing address provided below, or by email to guidelines-lignesdirectrices@fintrac-canafe.gc.ca.

13 How to Contact FINTRAC

For further information about registration with FINTRAC and other obligations for money services business, please go to FINTRAC's Web site (http://www.fintrac-canafe.gc.ca) or contact FINTRAC:

Mail

Financial Transactions and Reports Analysis Centre of Canada
234 Laurier Avenue West, 24^th floor
Ottawa, Ontario
Canada K1P 1H7

Telephone

Toll-free: 1-866-346-8722

Email

msb-esm@fintrac-canafe.gc.ca