Guest Blog
Our guest blogger this week is Jonathan Krumins, Vice-President, AML Risk & Compliance, at vCAMLO Solutions Inc. vCAMLO provides anti money laundering (AML) and counter terrorist financing (CTF) support to Canadian credit unions. You can learn more about vCAMLO at www.vcamlo.ca.
Background
Over the past year, we have a noticed a change in how Electronic Fund Transfer Reports (EFTRs) are interpreted by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). For entities that are required to report EFTs, any amount valued at CAD 10,000 or more that is sent out of Canada or received from outside of Canada on behalf of a customer is reportable to FINTRAC within 5 business days. During recent exams, FINTRAC has been paying much closer attention to the details of each report, reviewing each field for missing or invalid information. Due to restrictions in how much information can be included in a report, an EFTR can be considered incomplete by FINTRAC, even if all information has been entered by the reporting entity.
Reports that are filed to FINTRAC electronically must meet FINTRAC’s batch reporting specifications, which includes character limits for each field in the report. For example, fields such as “Individual’s Occupation” or “Street Address” are limited to 30 characters. This presents two risks for reporting entities:
- Descriptions that are longer than the field character limits, and
- Limitations of third party software.
We have sought additional clarification about these scenarios, and how they may affect your FINTRAC reporting.
Information Longer than the Field Character Limit
Certain information, such as a foreign bank’s street address, can easily be longer than the 30 character limit. We recommend shortening the address as much as possible by using abbreviations, and by trying to ensure that only the bank’s civic address is included in the report.
For example:
If the complete address is: The Example Bank Building, 123 George Washington Street, P.O. Box 456 (69 characters with spaces), the address must be shortened to meet the field limits.
One option for shortening the address is: 123 George Washington St.
Limitations in Third Party Reporting Software
Some third party FINTRAC reporting software does not enforce a field cut off (and the end user may not be notified that some information was cut off). This can result in information that appears to be present in a report, but is actually cut off as it is sent to FINTRAC.
Using the same example, if only the first 30 characters are sent to FINTRAC, the address in the report would read: The Example Bank Building, 123.
Some third party reporting software provides a report “Preview” function, which can show you how the report will actually appear to FINTRAC. If this option is available, be sure to review the “Previewed” report to ensure that all necessary information is contained in the report, and that nothing is cut off.
If your third party reporting software has this limitation, we would recommend contacting the software provider to request that field limits be put in place to match FINTRAC’s reporting specifications.
Need a Hand?
vCAMLO: If you are a credit union or MSB, and have any questions related to EFTR, LCTR or STR reporting, or if you are interested in AML Support Services, please contact us for a complimentary 30 minute compliance discussion.
Outlier: If you need assistance reviewing your technology solution or FINTRAC reporting to be certain that you’re meeting the standard described in this blog, or just someone to chat with to make sure that you’re on the right track please contact us.
Full Text Response
Good afternoon Mr. Krumins,
Thank you for your follow-up inquiry.
As previously stated, the reporting entity is required to include the relevant information to identify the destination or sending institution. It is for the reporting entity to determine the relevant information as this is a question of fact.
For an international or foreign address, there is no specific formula since every country has its own conventions. If no numerical address exists, the reporting entity should take reasonable measures to include the relevant information to help identify the destination or sending institution. When the reporting entity is reporting non-SWIFT Electronic Funds Transfers, and the institution’s information exceeds the character capacity in the given address field, then the reporting entity should consider ways to abbreviate names or words, without deteriorating the quality of the information, as necessary.
Best Regards,