The EFT reporting obligations apply to a broad range of reporting entity sectors in Canada, including financial entities (FEs), money services businesses (MSBs), foreign MSBs (FMSBs), and casinos. Life insurance companies and brokers may also be considered financial entities when offering loans or prepaid payment products, or maintaining related accounts.

As of July 1, 2024, armoured car businesses must register as MSBs. Where a person acts on behalf of a reporting entity such as an employee or agent, the legal responsibility for compliance lies with the principal entity. Use of service providers for report submission is permitted, but accountability for compliance cannot be delegated.

Definition of an Electronic Funds Transfer

An EFT is defined as any electronic, magnetic, or optical transmission of instructions to transfer funds. This includes both SWIFT MT-103 messages and equivalent non-SWIFT messages. Excluded are direct deposits, cheque imaging, internal clearing between financial institutions, and transfers for internal treasury management within corporate groups.

An international EFT is one where the transfer crosses national borders, either physically or via transmission of instructions.

Key Reporting Obligations

Reporting entities must report the initiation or final receipt of an international EFT of $10,000 CAD or more in a single transaction. Initiation refers to the first transmission of transfer instructions, while final receipt refers to the receipt by the entity responsible for remitting funds to the beneficiary.

Intermediaries in EFTs are not required to report but must retain records and include Travel Rule information in the transmission.

The Travel Rule

The Travel Rule mandates that when an international EFT is initiated or received, the following information must travel with the transfer:

• Name, address, and account/reference number of the requester (originator)

• Name, address, and account/reference number of the beneficiary

This information must not be removed during transmission. If incomplete information is received, the reporting entity must take reasonable measures to obtain it and follow internal, risk-based policies to determine whether to allow, suspend, or reject the transfer.

Residential Status & MSBs

MSBs and FMSBs must determine the residential status of requesters and beneficiaries when both initiation and final receipt of an EFT occur through the same business. A client is considered “in Canada” if they have Canadian-issued identification, a Canadian address, or banking ties.

When reporting a transaction involving a Canadian-resident client, a foreign MSB is deemed to be operating in Canada and must comply with Canadian EFT reporting requirements.

24-Hour Rule for Aggregated Transactions

Where two or more international EFTs are initiated or received within a static 24-hour period, and the combined amount equals or exceeds $10,000 CAD, the reporting entity must submit an aggregated EFT report. This rule applies where the transfers involve:

• The same person or entity

• The same third party on whose behalf transfers are made

• The same beneficiary

Both SWIFT and non-SWIFT transfers must be considered together for aggregation purposes.

Foreign Currency & Threshold Calculations

For EFTs involving foreign currencies, entities must convert the value to Canadian dollars using the Bank of Canada exchange rate in effect at the time of the transaction. If no such rate exists, entities must apply their own established exchange rate as outlined in their compliance programme.

Submission of EFT Reports

Reports must be submitted to FINTRAC within five business days following initiation or final receipt. Submission methods include:

• The FINTRAC Web Reporting System (FWR) for low-volume filers

• The FINTRAC API for secure, high-volume automated submissions

• Paper forms, only where electronic submission is technically unfeasible

Structure of the EFT Report

The Electronic Funds Transfer Report comprises two main sections:

1. General Information Details about the reporting entity, direction of transfer (initiation or receipt), and aggregation under the 24-hour rule.

2. Transaction Information Including amount, currency, parties involved (requester, initiator, beneficiary, account holder, third parties), and source of funds.

The report must accurately reflect the role of the reporting entity (e.g. initiator or receiver), and the level of effort for each field (mandatory vs. reasonable measures) may vary depending on transfer direction.

Additional Regulatory Requirements

In addition to Travel Rule compliance and reporting, EFT-related obligations include:

• Suspicious transaction reporting

• Record keeping and verification of identity

• Third party determination

• Response to ministerial directives

• Compliance programme integration

These requirements support the overarching AML/CTF framework within which international EFTs must be monitored and reported.

Conclusion: WTR Compliance Integration

This guidance outlines a detailed framework for Canada’s reporting entities to comply with the Travel Rule and EFT reporting under the PCMLTFA. Institutions must ensure that originator and beneficiary data is included with every international EFT, aggregated when appropriate, and reported accurately to FINTRAC. These measures form a critical part of Canada’s financial intelligence and international obligations to combat money laundering and terrorism financing.