The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) updated its guidance on complying with the Minister of Finance’s Ministerial Directive on Financial Transactions Associated with the Islamic Republic of Iran, in force since July 25, 2020 and amended February 15, 2024. The guidance consolidates how covered reporting entities must treat any transaction originating from or bound for Iran as high risk and apply enhanced identification, due diligence, recordkeeping and reporting requirements regardless of amount. The directive applies to banks, credit unions, financial services cooperatives, caisses populaires, authorized foreign banks and money services businesses. Transactions are in scope where available information indicates an Iran connection, including Iranian origin or destination addresses, dealings involving representatives of the Government of Iran, use of Iranian rial, client-disclosed proceeds from assets sold in Iran, or online activity traced to an Internet Protocol address geolocated in Iran, with additional direction on cases involving intermediary jurisdictions. Requirements include verifying the identity of any client requesting or benefiting from an in-scope transaction (including where normal regulatory thresholds would not trigger identification), obtaining the purpose and source of funds or virtual currency, and collecting beneficial ownership or control information for entities, with enhanced identity verification for transactions that meet existing threshold triggers. Recordkeeping is required irrespective of usual thresholds, including electronic funds and virtual currency transfers below CAD 1,000, cash or virtual currency receipts below CAD 10,000, and relevant negotiable instrument redemption and issuance activity below CAD 3,000, with records retained for at least five years. All in-scope transactions must be reported to FINTRAC using specified reporting instructions, including use of the Ministerial Directive field value IR2020 and special handling for below-threshold reports and certain transaction types (for example, domestic transfers and negotiable instruments reported via Suspicious Transaction Reports with the suspicion narrative sections left blank). The guidance also sets out applicable reporting timeframes, and notes that FINTRAC may assess compliance with ministerial directives during examinations and that breaches can be subject to the administrative monetary penalties regime.
Financial Transactions and Reports Analysis Centre of Canada 2025-07-14
Financial Transactions and Reports Analysis Centre of Canada updates guidance on enhanced reporting and due diligence for transactions to or from Iran
FINTRAC updated its guidance on the Ministerial Directive for financial transactions linked to Iran, emphasizing high-risk treatment and enhanced due diligence. The directive applies to various financial entities, mandating comprehensive identification, recordkeeping, and reporting, regardless of transaction amount. FINTRAC outlines specific reporting instructions and notes potential compliance assessments and penalties for breaches.