The PCMLTFA is Canada’s principal anti-money laundering (AML) and counter-terrorist financing (CTF) law. Its purpose is to detect and deter money laundering and terrorist financing, facilitate investigations, and support compliance with Canada’s international obligations, including those arising from membership in the Financial Action Task Force (FATF). While the Act does not explicitly mention the wire transfer regulation, it operationalises its principles through mandatory electronic funds transfer reporting and traceability requirements.

Scope & Entities Covered

The Act applies to a wide range of financial and non-financial entities, including banks, credit unions, insurance firms, trust and loan companies, foreign exchange dealers, money service businesses (MSBs), virtual asset service providers (VASPs), casinos, and other designated professions. These entities must comply with Part 1 of the Act, which mandates record-keeping, client identification, suspicious transaction reporting, and other obligations foundational to the WTR.

Electronic Funds Transfers (Travel Rule Application)

Section 9.5 of the Act is the most explicit expression of the Wire Transfer Rule within Canadian legislation. It mandates that:

• Prescribed reporting entities must include with each electronic funds transfer the name, address, and account or reference number of the sender (originator).

• They must also take reasonable measures to ensure that incoming transfers include similar information about the originator and beneficiary.

• Both domestic and cross-border transfers are subject to this obligation, with compliance enforced by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).

These requirements are aligned with FATF R.16 and support international traceability of fund flows.

Recordkeeping & Client Due Diligence

Sections 6 and 6.1 require all regulated entities to maintain records of transactions and verify client identities. These records must be retained for at least five years, ensuring that authorities can retrospectively trace fund transfers and customer relationships when investigating financial crime. Institutions must also refuse to open accounts where identity cannot be verified, reinforcing WTR compliance safeguards.

Suspicious & Large Transaction Reporting

Under Sections 7 and 9, entities must report to FINTRAC any transaction where there are reasonable grounds to suspect money laundering, terrorist financing, or sanctions evasion. This obligation applies even if a wire transfer is only attempted. Additionally, all prescribed large-value electronic funds transfers must be reported, regardless of suspicion, providing an automated safety net for tracing cross-border fund flows.

Compliance Programmes & Risk Assessment

Section 9.6 mandates that regulated entities must implement a compliance programme, including written policies, internal training, and ongoing risk assessments. If a high risk of money laundering is detected particularly in relation to wire transfers, special measures must be taken, such as enhanced due diligence or stricter transaction monitoring. This risk-based approach ensures the proportional application of WTR-related controls.

Cross-Border & Correspondent Banking Controls

Section 9.4 obliges entities entering into correspondent banking relationships to conduct due diligence, ensure the counterparty is not a shell bank, and document their responsibilities in writing. They are forbidden from dealing with unregistered entities (Section 9.31), especially those facilitating cross-border transfers without adequate safeguards, thus closing regulatory gaps that could be exploited via international wire corridors.

Virtual Assets & the Travel Rule

The Act now applies to entities dealing in virtual currencies, requiring them to register with FINTRAC and to include required originator and beneficiary information with electronic virtual asset transfers, in line with FATF guidance on crypto Travel Rule enforcement. These entities are held to the same standards as traditional financial institutions when processing electronic fund transfers.

Enforcement & International Cooperation

FINTRAC, under Part 3 of the Act, is empowered to analyse reports, exchange intelligence with foreign counterparts, and ensure systemic compliance. The Act imposes administrative monetary penalties, allows for search and seizure, and sets out mechanisms for judicial review and appeals. It also mandates cross-border currency reporting (Part 2), aligning with broader WTR objectives by reducing anonymity in physical fund movement.

Conclusion: WTR Compliance Integration

Canada’s PCMLTFA represents a robust legislative embodiment of the wire transfer regulation, capturing its key tenets through mandatory information transmission, electronic fund monitoring, and risk-based compliance. It ensures both fiat and virtual asset transfers are traceable and reportable, making it a cornerstone of Canada’s strategy against financial crime and a leading example of FATF-aligned legislation in the G7.