This guidance, effective from 1 June 2021, outlines the application of the 24-hour rule, which requires Canadian reporting entities to treat multiple transactions of the same type, carried out within a 24-hour window, as a single transaction for reporting purposes. Initially applicable to large virtual currency and cash transactions, the rule will also apply to electronic funds transfers (EFTs) and casino disbursements once updated forms are released. All references to monetary amounts are in Canadian dollars or their equivalent in foreign or virtual currencies.

All reporting entities regulated under the Proceeds of Crime (Money Laundering) & Terrorist Financing Act (PCMLTFA) must comply with this rule. This includes financial institutions, money services businesses (MSBs), foreign MSBs, and casinos. Life insurance brokers and agents may be included where they engage in specific financial services.

Core Concept of the 24-Hour Rule

The 24-hour rule requires aggregation of transactions of the same type when their combined total equals or exceeds $10,000 within a single 24-hour period and they are associated with the same person or entity under a consistent aggregation type. Aggregation types include conductor, beneficiary, or third party. Transactions must be reported in a single report if they meet this threshold.

A static 24-hour window must be defined by each entity, such as from 9 am Monday to 8:59 am Tuesday. Entities may use different time windows across business lines. Each transaction must be assessed independently within its designated 24-hour window, and the same transaction cannot span multiple windows. Compliance programmes must clearly define the start and end times of these windows and ensure systems are in place to monitor and capture transactions accordingly.

Application by Transaction Type

For large cash transactions, the 24-hour rule applies when two or more cash deposits totalling $10,000 or more are received from the same person, on behalf of the same third party, or for the same beneficiary. For virtual currency transactions, the rule applies similarly to receipts of virtual assets that meet the same aggregation criteria.

In the case of electronic funds transfers, both financial and money services businesses must apply the 24-hour rule when they either initiate or finally receive two or more international transfers that cumulatively exceed $10,000. The rule is triggered if the transactions are requested by or on behalf of the same person or are directed to the same beneficiary. The guidance includes both SWIFT and non-SWIFT transfers, which must be aggregated and reported accordingly.

Casinos are required to apply the rule when two or more disbursements are made or received that total $10,000 or more within 24 hours, again based on the identity of the requester or beneficiary.

How & When to Report

Reporting must occur within five business days of the transaction initiation or final receipt. The static 24-hour window applied must be recorded in the report. Reports can be submitted electronically through the FINTRAC Web Reporting System or the FINTRAC API. In cases of limited technical capability, paper reporting is permitted.

If a transaction of $10,000 or more occurs within a 24-hour window, it must be reported individually unless it forms part of a group of transactions being reported together. Transactions that are identical across reports can be reported once, while partially overlapping transactions across different aggregation types require multiple reports.

When to Avoid Aggregation

Transactions should not be aggregated where different roles are involved. For example, if one transaction is carried out by an individual and another on their behalf by a different person, aggregation is not triggered unless the beneficiary is the same. Each transaction must be evaluated according to who conducted it, who it was conducted on behalf of, and for whom the funds were intended.

Exceptions to Reporting

Certain entities are exempt from the 24-hour rule in specific circumstances. Reporting is not required when transactions are made on behalf of a public body, a very large corporation or trust with assets over $75 million that is listed on a recognised stock exchange in a FATF-member country, or a federally or provincially regulated pension fund. However, this exception does not apply if any individual transaction within the set is equal to or exceeds $10,000. In such cases, separate reports must be submitted for each qualifying transaction.

This exemption applies across all relevant transaction types, including virtual currency transfers and EFTs. The status of the entity involved must be verified prior to applying the exception.

Conclusion: WTR Compliance Integration

The 24-hour rule is a vital part of Canada’s anti-money laundering and counter-terrorist financing framework. It ensures that fragmented or structured financial activity does not escape scrutiny through timing or procedural loopholes. Reporting entities are expected to implement robust procedures to identify, aggregate, and report qualifying transactions. By enforcing consistency and transparency, this rule enhances FINTRAC’s ability to monitor suspicious activity and safeguard the integrity of Canada’s financial system.