Financial Crime World

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FINTRAC Requires Reporting of Suspicious Transactions Originating from or Bound for Iran

Background

The Canadian government has issued a Ministerial Directive requiring reporting entities to report suspicious transactions that originate from or are bound for Iran. This directive aims to combat money laundering and terrorist financing activities.

Requirements

According to the directive, all transactions associated with Iran must be treated as high-risk and monitored for potential suspicious activity. Reporting entities must submit a Suspicious Transaction Report (STR) to FINTRAC if they have reasonable grounds to suspect that a transaction is related to the commission or attempted commission of a money laundering or terrorist financing offence.

STR Requirements

The report must include:

  • The prefix “IR2020” before the reporting entity’s report reference number
  • In the G section of the STR
  • An indication of a connection to Iran, such as:
    • Use of the Iranian rial currency
    • Iranian address

TPR Requirements

In addition to submitting an STR, reporting entities must also monitor transactions for potential terrorist property and submit a Terrorist Property Report (TPR) if they have knowledge or believe that the property is owned or controlled by or on behalf of a listed person or terrorist group.

Mitigating Risk

The directive requires reporting entities to implement measures to mitigate the risk of transactions involving Iran. This may include:

  • Conducting due diligence on clients
  • Conducting research on the origin or destination of transactions

Reporting Timeframes

Reported transactions must be reported within specific timeframes:

  • Electronic funds transfers: no later than 5 working days after the day the reporting entity knows that the transfer must be reported
  • Large cash transactions: within 15 days after the transaction

Compliance Program Requirements

Reporting entities are required to have a compliance program in place that includes:

  • Policies and procedures for responding to Ministerial Directives
  • Measures to mitigate the risk of transactions involving Iran

FINTRAC will assess compliance with the directive during examinations and may impose penalties on reporting entities that fail to comply.

Source

Ministerial Directive, FINTRAC, 2024-02-23