The requirements for suspicious transaction reporting to the Financial Transaction and Reports Analysis Centre of Canada (FINTRAC) are coming into effect on November 8, 2001 for all financial institutions and other government organizations and private corporations involved in currency acceptance and transfer. Financial Business Exchange Inc. (FBE Inc.) has recently introduced a FINTRAC Reporting Service (Fintrac.RS) that both simplifies and significantly reduces labor, costs and deployment time required by financial institutions and other large companies and SMEs to develop and deploy its own software in order to fulfill the requirements of this critical legislation.

Our new Internet-based Fintrac.RS Reporting Service can fully address users concerns, providing peace of mind to corporate personnel, management, executives, shareholders and clients.

Fintrac.RS provides a new level of accountability by automatically ensuring that every step in the suspicious transaction reporting cycle strictly adheres to all the respective government and corporate policies.

Whatever business processes or technology an organization might use in its financial operations, Fintrac.RS assists Canadian financial institutions in protecting their investments in human capital and the banking solutions. Since most of the countries in the world are adopting similar legislation, non-Canadian corporations and employees might also use Fintrac.RS Reporting Service to their advantage.

Fintrac.RS provides an open-standard support platform for the transactional delivery of suspicious transaction reporting and other administrative services. It moves all suspicious transaction reporting administration to the corporate intranet/Extranet environment, providing individual access through standard Internet browsers. Fintrac.RS streamlines and expedites internal suspicious transaction reporting and authorization processes and hence reduces the paper burden. A critical advantage of Fintrac.RS is that it is entirely consistent with the emerging Internet corporate and government information infrastructure and does not require expensive software installations on the user desktop, or even on the departmental network server.

Here are the top benefits of our breakthrough service.

• Substantial administration savings and better corporate financial controls drive up your profit margins. According to a study published in the CFO Magazine, every $1 saved in admin overhead represents a $10 boost in the market value of a company. In a typical North American corporation, cost of backroom administrative cycle like suspicious transaction reporting reaches $54 per transaction. Fintrac.RS can reduce an internal overhead cost to as little as $8. As financial operations rapidly move to Internet, does it make much sense to conduct suspicious transaction reporting approval by pushing paper through the system and hampering valuable staff with non-productive activities?

• Substantial development savings. For money strapped corporations, there is no need for large cash outflow to buy the suspicious transaction reporting administration system and no need to invest in costly ongoing improvements.

• Ease of use. For organizations with multiple locations, Fintrac.RS can be used from anywhere in the country or the World where there is access to the Internet, by utilizing Web browsers these organization already own. Fintrac.RS does not require much training or additional software installation on the user's computer.

• Trustworthy and safe. The reporting transactions are completed only after responsible managers authorize them. Corporate suspicious transaction reporting cycle guidelines and approval procedures might be available online to guarantee there are no misunderstandings of organization's policy. Prescribed by Regulations safe and secure keeping of the records is also possible on the system itself or on the legacy system employed by the financial institution.

• Fully automated. Fintrac.RS ensures increased efficiency of backroom administration processes. Paperless process of approval and reporting can lead to significant corporate administration savings. In addition to reporting suspicious transactions to FINTRAC, the system allows passing the data to Canada Customs and Revenue Agency on the import or export of currency or monetary instruments.

• Our Fintrac.RS system is the only trusted way to ensure that FINTRAC reporting requirements are fully met in the secure Internet environment. Written in XML, Perl, SQL, workflow and advanced AI shell technologies and residing on the readily available Windows 2000 platform, Fintrac.RS contains all the sophisticated interactive forms, multi-field intelligent inputs and in-context instructions required for ongoing government reporting via the Web.

• FBE Inc. can also customize Fintrac.RS system to ensure that it can be used on the individual corporate technology platform with the comparative level of responsiveness and user friendliness of the interface, so you can achieve even more savings and administrative control within your organization.

As other FINTRAC reporting requirements come into full effect before the end of 2002, the system will also provide such important new documents as suspicious transaction report, large cash transaction report, and outgoing/incoming electronic funds transfer reports.

Take advantage of our offer, start saving money on your suspicious transaction reporting and authorization processes by using Fintrac.RS and see the dramatic difference in your bottom line administrative costs.

Financial Business Exchange Inc. is the world leader in providing advanced Extranet solutions to the financial institutions.

Whether you have small or large volume of financial transactions regulated under the Act, FBE Inc. can assist your organization in improving its efficiency using Fintrac.RS and other FBE Inc. value-added Extranet financial solutions.

Are you a corporation that is looking for a value-added partner to support your financial business needs? A strategic alliance partnership with Financial Business eXchange, Inc. brings the experience of the leading Internet financial services provider for small and medium size enterprises (SMEs) along with a well recognized brand name that your consumers can trust.

Whether you require a partner for a short or long term program, Financial Business eXchange, Inc. can develop a partnership that will be mutually beneficial. If you would like more information on exploring a Strategic Alliances Partnership, please send us an email.

The Proceeds of Crime (Money Laundering) Act (PCMLA), which received Royal Assent on June 29, 2000, legislates specific measures aimed at assisting in the detection and deterrence of money laundering and facilitating the investigation and prosecution of money laundering offences. All Canadian deposit-taking institutions are subject to the Act and Regulations, as well as Guidelines on compliance with the legislation.

According to PCMLA, all Canadian Financial Institutions and agents of the Crown are obliged to immediately report to FINTRAC all suspicious transactions. The Act also requires persons and entities subject to the Act to keep the records prescribed in the Regulations; declare to Canada Customs and Revenue Agency the import or export of currency or monetary instruments of a value greater than the prescribed amount (CCRA in turn is required to report these declarations to FINTRAC); and report other financial transactions as prescribed in the Regulations. Failure to report a suspicious transaction could lead to substantial fines and legal actions.

Employees who reported to their superior are exempted from being charged under the Act. There is no minimum threshold amount for reporting a suspicious transaction.

The following persons and entities will have to report suspicious and certain other transactions to FINTRAC:

• financial entities (such as banks, credit unions, caisses populaires, trust and loan companies and agents of the Crown that accept deposit liabilities);

• life insurance companies, brokers and agents;

• securities dealers, including portfolio managers and investment counsellors;

• persons engaged in the business of foreign exchange dealing;

• money services businesses (including Canada Post for money orders);

• legal counsel (when carrying out certain activities on behalf of their clients);

• accountants (when carrying out certain activities on behalf of their clients);

• real estate brokers or sales representatives (when carrying out certain activities on behalf of their clients);

• certain casinos; and

• employees of such persons or entities.

In addition, anybody, including law enforcement agencies, can voluntarily report information about suspicions of money laundering.

• FINTRAC Guidelines indicate that while the Act and Regulations do not specifically require you to implement or use an automated system for detecting suspicious transactions, you may decide that such a system would be beneficial to your business. The reporting persons or entities that send on average at least one report per week over a 12-week period will have to apply for a public key infrastructure (PKI) certificate. For larger entities, the batch file reporting mechanism will not be available before January 2002.

• The reporting persons and entities have to report transactions when there are reasonable grounds to suspect that the transactions are related to the commission of a money laundering offence.

• Depending on the type of activities they are involved in, these same reporting persons and entities will have to report the following financial transactions:

  • large cash transactions involving amounts of $10,000 or more;

  • sending or receiving of international electronic funds transfers of $10,000 or more;

  • foreign exchange transactions at a rate that exceeds the posted rate, and the payment by an individual of transaction fees that exceed the posted fees; and

  • any casino transaction of $3,000 or more when an individual receives payment in casino cheques made out to third parties or without a specified payee.

• Reporting persons and entities are protected from criminal and civil legal proceedings for submitting suspicious transaction or other financial transaction reports in good faith to FINTRAC, as required.

• Subsection 75(2) of the Act states that "no employee of a person or an entity shall be convicted of an offence under subsection (1) in respect of a transaction that they reported to their superior." Thus, employees who report suspicious transactions to their superior cannot be held liable for failing to report the suspicious transactions to FINTRAC.

• Under the Regulations, persons and entities must send the suspicious transaction report, containing the information set out in Regulations, to FINTRAC within 30 days after detecting a fact related to a transaction that constitutes reasonable grounds to suspect that the transaction is related to the commission of a money laundering offence. An EFT transactions report must be sent to FINTRAC no later than two working days after the transfer.

• Persons and entities should maintain an effective record-keeping system to enable either internal or external auditors or FINTRAC to have access to the records in a timely fashion. For records that are kept electronically, an electronic signature of the individual who must sign the record must be retained.

• Part 5 and Subsection 75(1) of the Act set out the penalties for failing to meet the suspicious transaction reporting obligations. Failure to comply can lead to criminal charges against the entities and individuals subject to the Act. The following are some of the penalties:

  • failure to report suspicious transaction: conviction could lead to up to five years imprisonment and/or a fine of $2,000,000;

  • failure to report a large cash transaction: conviction could lead to a fine of $500,000 for a first offence and $1,000,000 for each subsequent offence;

  • failure to retain records: conviction could lead to up to five years imprisonment and/or a fine of $500,000;

  • failure to implement a compliance regime: conviction could lead to up to five years imprisonment and/or a fine of $500,000.