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What Is FINTRAC?

By
Adam Hayes
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Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader. Besides his extensive derivative trading expertise, Adam is an expert in economics and behavioral finance. Adam received his master's in economics from The New School for Social Research and his Ph.D. from the University of Wisconsin-Madison in sociology. He is a CFA charterholder as well as holding FINRA Series 7, 55 & 63 licenses. He currently researches and teaches economic sociology and the social studies of finance at the Hebrew University in Jerusalem.

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Updated October 15, 2022
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Charlene Rhinehart is a CPA , CFE, chair of an Illinois CPA Society committee, and has a degree in accounting and finance from DePaul University.

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What Is FINTRAC?

FINTRAC is an acronym for the Financial Transactions and Reports Analysis Centre of Canada, the financial intelligence unit that monitors monetary transactions to identify and prevent illegal activities such as money laundering and financing of terrorist organizations. The center reports to the Minister of Finance, who in turn is accountable to Parliament. FINTRAC is headquartered in Ottawa and has offices in Montreal, Toronto, and Vancouver.

Sarah Paquet is the director and chief executive officer of FINTRAC. For the 2020–21 budget year, the agency planned to spend C$62 million and employ 372 full-time equivalent staff.

Key Takeaways

  • FINTRAC monitors financial transactions to identify and prevent money laundering, terrorist funding, and other illegal activities.
  • The financial intelligence unit reviews more than 25 million transaction reports every year.
  • In the 2020–21 reporting period, FINTRAC disclosed 2,046 cases of actionable intelligence in support of investigations into money laundering and terrorist funding.

How FINTRAC Works

FINTRAC was founded in 2000. It monitors financial transaction reports for suspicious behavior and protects the integrity and security of Canada's financial transactions. As part of its operations, it collects personal data from individuals and organizations. The agency's tasks include:

  • Receiving financial transaction reports
  • Protecting the information under its control
  • Uncovering patterns of money laundering and terrorist financing
  • Complying with all relevant regulations, such as the Privacy Act
  • Providing information from its findings to the public

FINTRAC operates separately from other legal authorities but is authorized to share the information it discovers with them. For example, if FINTRAC identifies a financial criminal (or suspect), law enforcement agencies would need to be notified to detain or arrest the individual. FINTRAC is under the purview of Canada's Minister of Finance and was established as part of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

As part of a government organization, FINTRAC must report its findings according to the Access to Information Act, which requires government information to be available to the public.

Since 2002, FINTRAC has been a member of the Egmont Group of Financial Intelligence Units, a global network of financial analysis organizations that collaborate to combat money laundering and terrorist financing on an international level.

Other prominent Egmont Group members include the Financial Crimes Enforcement Network (FinCEN) in the United States and the National Crime Agency (NCA) in the U.K.

2,046

The number of disclosures of actionable financial intelligence FINTRAC made in the 2020-21 reporting period.

Special Considerations for FINTRAC

Since FINTRAC collects individuals' data, it is required to adhere to regulations under Canada's Privacy Act, which specifies that personal information can only be used for the purpose for which it was collected. Additionally, individuals have the right to access their information and make any necessary corrections. FINTRAC must protect this personal information from unauthorized disclosure.

Audits in 2013 and 2009 by the Office of the Privacy Commissioner of Canada (OPC) revealed that FINTRAC collected information not relevant to its initiatives. Following the 2009 audit, FINTRAC pledged to reduce the information it held to an absolute minimum. The subsequent 2013 audit revealed that this reduction did not occur. The OPC and other critics spoke out against this unnecessary hoarding of information, pressuring FINTRAC to adopt quicker solutions to reducing the data it gathers and maintains.

Article Sources
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  1. FINTRAC. "Departmental Results Report 2019-20."

  2. FINTRAC. "Departmental Results Report 2020-21."

  3. FINTRAC. "Info Source."

  4. Egmont Group. "CANADA - Financial Transactions and Reports Analysis Centre of Canada (FINTRAC - CANAFE)."

  5. Egmont Group. "About."

  6. Egmont Group. "List of Members."

  7. FINTRAC. "Access to Information and Privacy Protection at FINTRAC."

  8. Office of the Privacy Commissioner of Canada. "Privacy concerns with FINTRAC remain following two separate audits."