Canada’s Proceeds of Crime (Money Laundering) & Terrorist Financing Regulations (PCMLTFR), under the Proceeds of Crime (Money Laundering) & Terrorist Financing Act, form a robust framework that operationalises the Financial Action Task Force (FATF) Travel Rule (WTR) through detailed regulatory requirements. These provisions apply to a broad range of reporting entities and address both fiat and virtual asset transfers.

Application of the Travel Rule

Section 124 of the Regulations defines and governs electronic funds transfers (EFTs), specifying that the Travel Rule applies to international EFTs of CAD $1,000 or more. The rule applies regardless of whether the originator and beneficiary are the same person or entity. Only SWIFT MT-103 messages and their equivalents are included in scope. Sections 7 and 124 mandate that financial entities report the initiation and final receipt of such transfers to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), and maintain detailed records as outlined in Schedules 2 and 3. Similarly, Section 124.1 extends these obligations to virtual currency transfers.

Information Requirements for Transfers

Each reportable transfer must include the names and addresses of both the originator and beneficiary, their account numbers or equivalent identifiers, the amount and type of funds or virtual currency involved, the method of remittance, relevant exchange rates, and all transaction identifiers. When the information is not available despite reasonable efforts, the reporting obligation still stands and the institution must flag the gap.

Responsibilities of Ordering, Intermediary & Beneficiary Institutions

Financial institutions initiating an EFT must collect and transmit the full set of originator and beneficiary information. When acting as intermediaries, they must preserve and pass on this data. Recipient institutions are responsible for maintaining accurate receipt records and for verifying consistency with transaction expectations. This three-tiered responsibility structure closely mirrors FATF Recommendation 16 and ensures traceability through the payment chain.

Due Diligence & Recordkeeping

Sections 12, 14, 20, and others across Parts 1 to 4 set out stringent recordkeeping standards. These require institutions to maintain EFT documentation for at least five years, including data on transaction amounts, account identifiers, remittance details, and exchange rates. Information records must also be maintained for both cash and virtual currency transfers above CAD $10,000.

Regulatory Scope & Sectoral Application

The regulations apply to a wide array of entities: banks, credit unions, life insurance companies, securities dealers, money services businesses (MSBs), casinos, legal professionals, real estate brokers, and dealers in precious metals and stones. Each is bound by the same core obligations with respect to identifying parties, recordkeeping, and timely reporting of prescribed transactions. MSBs and foreign MSBs are specifically addressed in Sections 29.1 to 32, and must comply with all EFT and virtual asset transfer reporting rules.

Supervisory & Enforcement Mechanisms

FINTRAC serves as the central enforcement body. It has authority to audit institutions, issue compliance directives, and refer cases for criminal or civil enforcement. Non-compliance with WTR-aligned obligations, such as incomplete information or failure to report, can lead to significant penalties.

Conclusion: WTR Compliance Integration

Canada’s PCMLTFR thoroughly implements the FATF Travel Rule through its coverage of both fiat and virtual asset transfers, detailed transaction data requirements, and clear institutional responsibilities. These regulations promote transparency, traceability, and international cooperation, positioning Canada as a jurisdiction with high technical compliance on WTR matters. The framework’s application to a wide range of entities and its integration of both traditional and emerging payment systems underscore its effectiveness and adaptability.