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• What is VASP? As an abbreviation for Virtual Asset Service Provider, this term refers to a virtual asset operator that conducts business mediating the exchange of virtual assets. Virtual Assets Service Provider typically include virtual asset exchanges, virtual asset custody service provider, and virtual asset wallet service provider.
• What is Travel Rule? The travel rule is a method that transmitting and verifying the information of the sender and receiver when exchanging virtual assets to comply with laws and regulations for anti-money laundering purposes.
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The FinCEN Travel Rule

• February 25, 2021
• AML Compliance , Banks , Blog , Casino and Gaming , FinTechs , MSBs

Disclaimer: The contents of this article are intended to provide a general understanding of the subject matter. However, this article is not intended to provide legal or other professional advice, and should not be relied on as such.

The FinCEN “Travel Rule” has many requirements and nuances that can challenge and confuse new and seasoned AML compliance professionals alike. From the basics of what types of transactions fall under the Rule, to mandatory versus optional data requirements, to its many exemptions – as well as the nuances addressed by subsequent FinCEN guidance not contained in the Rule itself – compliance professionals need to understand the details of this longstanding Bank Secrecy Act (BSA) regulation.

This article begins with a review of the fundamentals of the FinCEN Travel Rule , and why compliance is so important to anti-money laundering efforts. Learn about the nuances of complying with the Travel Rule, including a discussion of pending changes to the Travel Rule in an October 2020 Notice of Proposed Rulemaking; Fedwire versus Travel Rule requirements; aggregated funds transfers; Originator name issues; and transfers by non-customers.

What is the FinCEN Travel Rule?

In January 1995, the Board of Governors of the Federal Reserve and FinCEN jointly issued a Rule for banks and other nonbank financial institutions, relating to information required to be included in funds transfers. The Rule is comprised of two parts – the Recordkeeping Rule, and what’s come to be known as the Travel Rule. The Travel Rule was promoted by FinCEN, in keeping with their mandate to enforce the Bank Secrecy Act .

The Recordkeeping Rule and the Travel Rule are complementary. The Recordkeeping Rule requires financial institutions to collect and retain the information that in turn, per the Travel Rule, must be included with a funds transfer and passed along – or “travel” –  to each successive bank in the funds transfer chain. The Recordkeeping Rule does however serve other purposes besides ensuring that information is available to include with funds transfers.

The terms “transfer” and “transmittal” are used throughout this regulation. The distinction between these two terms is simple: a bank performs transfers, and a non-bank financial institution performs transmittals. The term “transfer” will primarily be used from this point on to refer to both types of transactions.

The Underlying Objective

Fund transfers have been the tool of choice for money laundering, fraud, and much more, for decades. As FinCEN’s mission is to implement, administer, and enforce compliance with the Bank Secrecy Act, it has the authority to require financial institutions to keep records that, according to FinCEN, have a high degree of usefulness in criminal, tax, or regulatory investigations or proceedings, or even in intelligence or counterintelligence matters when terrorism is involved.

Ultimately, the Recordkeeping and Travel Rule is primarily designed to help law enforcement to detect, investigate and prosecute money laundering and financial crimes, by preserving the information trail about who’s sending and receiving money through funds transfer systems.  In other words, it helps them follow the money.

Transactions Subject to the Recordkeeping and Travel Rule

The Recordkeeping and Travel Rule states that it applies to funds transfers. The definition of a funds transfer is very important, as highlighted later in the discussion of the most recent Notice of Proposed Rulemaking.

The Rule defines a funds transfer as a series of transactions, beginning with the Originator’s payment order, made for the purpose of making a payment of money to the Beneficiary of that payment order.

Below is a basic illustration of a funds transfer. An Originator creates a Payment Order to pay money to a specific Beneficiary. The Originator delivers the Payment Order to his bank, which then passes on the Payment Order details to the bank holding the Beneficiary’s account. The funds transfer is complete when the Beneficiary’s Bank accepts the Payment Order on behalf of the Beneficiary.

In today’s world, funds transfers are electronic, and a wire transfer is the most common form of electronic funds transfer.  At its essence, a wire transfer is simply a message from one bank to another, passed through an electronic system, such as Fedwire, SWIFT , or CHIPS.

Electronic Funds Transfers That are Excluded

Besides wire transfers, there are many types of electronic funds transfers, or EFTs in use today. Although all are in essence funds transfers, these types of transactions are specifically excluded from the definition of a funds transfer or transmittal in the Recordkeeping and Travel Rule. Instead, these types of electronic funds transfers are defined in, and governed by, the Electronic Funds Transfer Act, otherwise known as Regulation E. [i] Currently, these are:

• ACH (automated clearing house) transactions
• ATM (automated teller machine) transactions
• Point of Sale (POS) transactions
• Direct deposits or withdrawals
• Telephone banking transfers

Terminology Review

The terminology used in the Recordkeeping and Travel Rule is in many cases unique. The more commonly-used terms when referring to wire transfers and other electronic funds transfers come from the Uniform Commercial Code’s Article 4A, which governs funds transfers. [ii]

Throughout this article, UCC 4A terminology will be used as it is more commonly understood:

* The spelling shown here is per the regulation; it is not the correct spelling of this word according to widely-accepted sources.

The term Sender per UCC 4A refers to the person who is delivering the Payment Order to the Receiving Bank. This person would typically be the Originator, but could potentially be a third party, as discussed further below.

Funds Transfer Data Requirements

The Rule divides the data requirements on a funds transfer into two groups: (1) data that is mandatory, and (2) data that, if the originator provides it , must be included.

First, the data that must be included on the funds transfer by the Originator’s Bank is:

• The Originator’s name
• The Originator’s address
• The Originator’s account number (if there is one)
• The identity of the Beneficiary’s Bank
• The payment amount
• The payment execution date

Typically, a bank will automatically populate the Originator’s name and address information on a wire transfer directly from the customer record. This is because it is very important that the Originator’s name reflects the actual party initiating the Payment Order. (This topic is explored further in the Deep Dives section below.)

The second group of data elements is optional – meaning, if the Originator provides any of this information, it must be included on the funds transfer record.  This information includes:

• The Recipient’s (or Beneficiary’s) name
• The Beneficiary’s address
• The Beneficiary’s account number or other identifiers
• Any other message or payment instructions – what typically are entered in the freeform text fields on a wire transfer, such as the Originator to Beneficiary Information or OBI field on a Fedwire.

Even though this information is not mandatory per FinCEN’s Travel Rule requirements, nothing precludes a bank from mandating customers to supply it. From an operational perspective, at least the Beneficiary’s account number should be required information to minimize the risk that the transfer will be rejected and returned by the Receiving Bank as unpostable.

As well as being highly valuable to law enforcement, Beneficiary information is critical to a bank’s fraud detection , suspicious activity monitoring and sanctions compliance efforts. Without this information, detecting an unusual or suspicious wire transfer recipient, establishing a pattern of transaction activity to a particular recipient, or identifying a customer transaction with an OFAC-sanctioned party is impossible.

Exemptions from the Travel Rule

In addition to the types of EFTs that are not subject to the Rule (as they fall under the jurisdiction of Regulation E) there are several categories, or classes, of funds transfers that are exempt from FinCEN’s Travel Rule’s requirements. Specifically:

• A funds transfer that is less than $3,000.
• A funds transfer where the sender and the recipient are the same person . For example, if an individual is wiring money from her account at Bank A to her account at Bank B, Bank A does not have to obtain and retain the Travel Rule mandatory information for this transfer.
• A funds transfer made between two account holders at the same institution. Commonly known as a book transfer, this transaction is not processed through the Federal Reserve, but is simply a journal entry on the financial institution’s books.
• A bank, or a U.S. subsidiary thereof
• A commodities/futures broker, or a U.S. subsidiary thereof
• The U.S. government; a state or local government
• A securities broker/dealer, or a U.S. subsidiary thereof
• A mutual fund
• A federal, state or local government agency or instrumentality

Nothing prevents a financial institution from ignoring these exemptions; the institution is free to follow the Recordkeeping and Travel Rule requirements with every funds transfer. Such a practice benefits all the financial institutions involved in the transaction, as well as law enforcement.

Recordkeeping and Travel Rule Enforcement

FinCEN enforcement actions over the years have never solely targeted violations of the Recordkeeping and Travel Rule. This is likely because as a matter of operational efficiency, financial institutions typically populate the basic mandatory information on all outgoing funds transfers and maintain records of such.

However, it is important not to overlook the other key element of the Recordkeeping and Travel Rule: records retrievability.

A financial institution may be approached by federal, state, or local law enforcement, its regulator, another regulatory agency, or by subpoena, to provide specific funds transfer records.

If the institution is the Originator’s Bank, the mandatory funds transfer information to be collected and retained (Originator name & address, etc.) must be retrievable upon request, based on the Originator’s name . If the Originator is the institution’s established customer, transaction retrieval by the Originator’s account number may also be requested. A Beneficiary’s Bank must be able to retrieve funds transfer records by the Beneficiary’s name, and if an established customer, also by account number.

The FinCEN Travel Rule requires all funds transfer records to be retained for a minimum of five years from the date of the transaction.

Once funds transfer records are requested, the Rule states they must be supplied within a reasonable period – which may likely be negotiated between the financial institution and the requestor.

The 120-Hour Rule

However, financial institutions should be aware of a lesser-known clause within Section 314 of the USA PATRIOT Act that could impact records retrieval. Commonly known as the 120 Hour Rule , it states that any information, on any account that is opened, maintained, or managed in the U.S.  requested by a federal banking agency, must be provided by the financial institution within 120 hours (5 days) after receiving the request. Funds transfer records would likely fall within the scope of this Rule.

Anecdotally, regulators have not imposed the 120 Hour Rule often. Financial institutions should nevertheless be prepared to respond to regulatory or law enforcement requests as quickly and efficiently as possible. IRS and civil case subpoenas requesting funds transfer records also typically have a short response window.

Recordkeeping and Travel Rule Guidance: A Deep Dive

The following sections explore deeper topics relating to Recordkeeping and Travel Rule guidance, including:

• The October 2020 Joint Notice of Proposed Rulemaking impacting the Rule
• Fedwire versus the Travel Rule
• Originator name issues
• Aggregated funds transfers
• Funds transfers for non-customers

Joint Notice of Proposed Rulemaking

On October 23, 2020, the Board of Governors of the Federal Reserve and FinCEN issued a Joint Notice of Proposed Rulemaking (NPRM) to amend the Recordkeeping and Travel Rule regulations. Written comments on the Proposed Rule were due by the end of November 2020. The next step is a publication of the Final Rule, but FinCEN has not set a date for this.

According to the website Regulations.gov , 2,882 comments were submitted for the NPRM. Commenters ranged from major banking groups such as the American Bankers Association to private individuals. The comments were overwhelmingly negative.

The NPRM proposes two major changes, discussed below.

Reducing the Minimum Dollar Threshold for Recordkeeping and Travel Rule Compliance on Cross-Border Funds Transfers

Part 1 of the NPRM proposes reducing the $3,000 threshold for Recordkeeping and Travel Rule compliance to $250 for cross-border transactions. The threshold for domestic transactions would remain at $3,000.

While this change may not have a major impact on financial institutions that ignore the dollar threshold exemption, it would significantly impact those institutions that follow it. There are some interesting nuances in this proposed change regarding what is meant by “cross border.”

Initially, a “cross-border” transaction is defined as one that, “begins or ends outside of the United States.” The United States includes the 50 states, the District of Columbia, the Indian lands (as that term is defined in the Indian Gaming Regulatory Act), and the Territories and Insular Possessions of the United States. [iii]

A funds transfer would be considered to “begin or end outside the United States” if the financial institution knows, or has reason to know, that the Originator, the Originator’s financial institution, the Recipient/Beneficiary, or the Recipient/Beneficiary’s financial institution is located in, is ordinarily resident in, or is organized under the laws of a jurisdiction other than the United States. Furthermore,  a financial institution would have “reason to know” that a transaction begins or ends outside the United States only to the extent such information could be determined based on the information it receives in the payment order or otherwise collects from the Originator.

The driving factor behind this regulatory change is the benefit to law enforcement and national security. FinCEN’s analysis of SAR filings , as well as comments collected by the Department of Justice from agents and prosecutors at the Federal Bureau of Investigation, the U.S. Drug Enforcement Administration, the Internal Revenue Service, the U.S. Secret Service, and U.S. Immigration and Customs Enforcement, all supported lowering (or eliminating altogether) the reporting threshold, in order to disrupt illegal activity and increase its cost to the perpetrators.

According to FinCEN and these other law enforcement agencies, cross-border funds transfers, and especially lower dollar transfers in the $200 to $600 dollar range, are being used extensively in terrorist financing and narcotics trafficking to avoid reporting and detection.

For those institutions that abide by the minimum reporting threshold, the new lower cross-border threshold presents operational and programmatic challenges. The distinction between a cross-border and a domestic transaction is not always clear. For example, if a financial institution has no direct foreign correspondent banking relationships, its cross-border funds transfers must flow through a U.S. intermediary institution, and therefore the Federal Reserve. Automated systems may interpret such transactions as domestic because the first receiving institution will always be U.S.-based.

Recordkeeping and Travel Rule Applies to Virtual Currency

The second element of the NPRM would make funds transfers involving convertible virtual currency (CVC) and other digital assets, to be subject to the Recordkeeping and Travel Rule. CVC, more commonly known as cryptocurrency or cyber-currency, is a medium of exchange with an equivalent value in currency or acts as a substitute for currency, but at present does not fall under the regulatory definition of “money” (also known as legal tender).

The Proposed Rule now defines CVC as money. This is significant because transfers of CVC now legally fall within the meaning of “a transfer of money” to which the Recordkeeping and Travel Rule applies.

The “why” behind this aspect of the Proposed Rule is the exponential growth in CVC use for money laundering, terrorist financing, organized crime, weapons proliferation, and sanctions evasion. CVC’s anonymity makes it particularly attractive for financial crime. Bad actors can convert illegal proceeds into virtual currency and then transmit it to any destination anonymously within seconds, where it is redeemed for cash again or converted to another form. This makes CVC a perfect mechanism for the layering phase of money laundering.

For more information, check out our blog on the crypto travel rule .

NPRM Background and the “FATF Travel Rule”

Events leading up to the NPRM provide an interesting background, especially as they are intertwined with global anti-money laundering efforts – specifically those of the Financial Actions Task Force (FATF) and what has come to be known as the “FATF Travel Rule.”

As virtual currency’s popularity began to grow exponentially, regulators in the United States and globally were caught off-guard. It was not well understood, and there were no real protocols in place to govern it. In March 2013 , FinCEN released initial guidance clarifying that virtual currency exchangers and administrators must register as money service businesses, pursuant to federal law. [iv]

In October 2018 , FATF published guidance that clearly defined just what are virtual assets and virtual asset service providers (VASPs). [v] FATF followed this up in February 2019 with a far-reaching Interpretive Note to Recommendation 15 (New Technologies), in a Public Statement titled “Mitigating Risks from Virtual Assets.” [vi]

This publication included two key proposals that generated backlash from the cryptocurrency sector:

For one, it proposed that VASPs should, at a minimum, be required to be licensed or registered in the jurisdiction(s) where they are created. As well, VASPs should be subject to effective systems for monitoring compliance with a country’s AML/CFT requirements, and be supervised by a competent authority – not a self-regulatory body.

Second, it introduced what’s come to be known as the FATF Travel Rule for funds transferred over $1,000 – specifically referencing virtual asset transfers. These requirements match up point-for-point with the United States Recordkeeping and Travel Rule in terms of required funds transfer data to be obtained, retained and passed on.

In May 2019 , FinCEN published lengthy and complex guidance [vii] effectively stating that CVC-based transfers processed by nonbank financial institutions that meet the definition of a money service business are subject to the Bank Secrecy Act (BSA), and thereby the Recordkeeping and Travel Rule. Furthermore, it clarified that a transfer of virtual currency involves a sender making a “transmittal order.”

One month later in June 2019 , the FATF formally adopted the proposals from their 2018 guidance by incorporating them into the FATF 40 Recommendations – specifically, Recommendation 16, Wire Transfers.

In October 2020, the Federal Reserve Board and FinCEN issued their Joint NPRM, which would codify their May 2019 guidance as well.

Fedwire vs. the FinCEN Travel Rule

With respect to the implementation and enforcement of the Recordkeeping and Travel Rule, there is an interesting disconnect between the two key divisions of the U.S. Treasury Department. FinCEN is tasked with administering and enforcing the BSA, of which the Recordkeeping and Travel Rule is a part. The Federal Reserve Banks, also part of the US Treasury Department, own and operate Fedwire , the country’s primary funds transfer service. Yet the Fedwire system does no validation whatsoever that funds transfers processed through it include the basic, mandatory information required by the Travel Rule. The only data elements required to process a Fedwire transfer are the sending and receiving banks’ Fed routing numbers, the transaction amount, and its effective date. [viii]

One might conclude that law enforcement could have much more information on funds transfers at its disposal if the federal government’s actual funds transfer system made that information required.  Today, should an Originator’s Bank fail to include the Travel Rule’s mandatory information (Originator’s name and address, etc.) on a funds transfer, the Receiving Bank is under no obligation to return the transfer and request the mandatory information. Instead, the burden is solely on the Originator’s Bank to comply, and any subsequent Receiving Banks’ responsibility is simply to retain (and pass on, if necessary) the information received.

Aggregated Funds Transfers

A financial institution may aggregate, or combine, multiple individual funds transfer requests into a single,  aggregated  funds transfer/transmittal.

For purposes of the FinCEN Travel Rule, whenever a financial institution aggregates multiple parties’ transfer requests into one single transfer, the institution itself becomes the Originator. Similarly, if there are multiple Beneficiaries in this aggregated transfer, but all with accounts at the same Receiving institution, then that institution becomes the Beneficiary on the aggregated funds transfer.

Aggregated funds transfers are common with money service businesses , as illustrated here:

A money service business (MSB) in Texas has several transmittal orders from various individuals, who are all sending funds to recipients via one particular Mexican casa de cambio. The Texas MSB aggregates these transactions into a single transmittal order, submitted to the MSB’s bank in Texas, for which the Beneficiary is the Mexican casa de cambio. This transmittal order does not identify the individual Originators or Beneficiaries of the underlying transfers. The Texas bank passes on the aggregated transmittal order to the Mexican bank holding the account of the casa de cambio.  Once this funds transfer is complete, the casa de cambio pays the Mexican recipients, based on separate individual transmittal orders it received directly from the Texas MSB.

In this aggregated funds transfer scenario, the Originators’ payments are completed through a combination of individual transmittal orders between the senders and recipients, and an aggregated funds transfer between the MSB and the casa de cambio.

To summarize, the Recordkeeping and Travel Rule requirements for the Texas MSB and its Texas bank are as follows.

The MSB must keep a record of each customer’s individual transmittal order. The MSB is the Originator’s Bank, and the individual sender is the Originator. The Beneficiary is the individual who will receive the money, and the Beneficiary’s Bank is the Mexican casa de cambio.

The Texas bank must retain and pass on the information on the aggregated funds transfer between the MSB and the casa de cambio. On this funds transfer record, the Originator is the Texas MSB, the Texas bank is the Originator’s Bank, the Mexican casa de cambio is the Beneficiary, and its bank is the Beneficiary’s Bank.

Originator Name Issues

The Originator’s full true name is a required data element per the Recordkeeping and Travel Rule. A financial institution will typically populate the Originator’s name and address information on a funds transfer directly from its customer record.

A financial institution may be faced with a situation where a customer does not want his/her/their actual name to be present on a funds transfer.

For example, a customer may ask the financial institution to replace the Originator name on a funds transfer with that of some other party. Oftentimes, the customer is sending funds from their own account on behalf of someone else. Individuals as well as business entities may make such a request, for a variety of underlying reasons.

Changing an Originator’s name from that of the account holder to that of a third party is clearly a violation of the spirit of the Travel Rule, although not specifically addressed within it. Further, it exposes the financial institution to risks of abetting fraud, tax evasion, and other illicit activities.

The FinCEN Travel Rule does, however, specifically prohibit the use of a code name or pseudonym in place of an individual Originator’s true name. However, there are some exceptions to this with respect to commercial/business customers. For instance, a business may have several accounts, each of which is titled in a manner that reflects the purpose of the account – such as “Acme Corporation Payroll Fund.” Use of an account name that reflects its commercial purpose is acceptable for an Originator name under the Travel Rule.

Other acceptable Originator names for business customers are names of unincorporated divisions or departments, trade names, and Doing Business As (DBA) names, such as these examples:

• “Giant Inc Engineering Division”
• “McDonald’s” (a trade name for the McDonald’s Corporation)
• “Sue’s Flowers” (the DBA name for a sole proprietorship owned by Sue Smith)

Joint Accounts

When a funds transfer is made from a joint account, technically both account holders are the Originators. However, automated funds transfer systems, including Fedwire, do not provide space for more than one Originator name and address. FinCEN provides financial institutions with a solution: [ix] simply identify the Originator on the transfer as the joint account holder who requested it.

Funds Transfers for Non-Customers

Additional rules apply when a financial institution accepts a funds transfer order from a party that is not an established customer (i.e., a non-customer).

If the payment order is made in person by the Originator, the financial institution must verify his/her identity, and obtain and retain the following information:

• Originator’s name and address
• Type of identification document reviewed, and its number and other details (e.g., driver’s license number, state where issued)
• The Originator’s tax ID number, or, if none, an alien identification number or passport number and country of issuance. Should the Originator state that he/she has no tax ID number, a record of this fact should also be retained.

If the person delivering the payment order is not the Originator, the financial institution should record that person’s name, address, and tax ID number (or alternative as described above), or note the lack thereof. The institution should also request the actual Originator’s tax ID number (or alternative as described above) or a notation of the lack thereof. The institution must also keep a record of the method of payment for the funds transfer (such as a check or credit card transaction).

• The Recordkeeping and Travel Rule is a joint regulation under the Bank Secrecy Act, issued by the Federal Reserve Board and FinCEN.
• Record retrieval is equally important as record creation. Financial institutions should ensure full records of all outgoing and incoming funds transfers are retained for five years  and can be retrieved by Originator name or account number (for established customers).
• Exemptions to the Rule, such as funds transfers under $3,000, are not mandatory . Financial institutions may choose to fully comply with the Recordkeeping and Travel Rule for every funds transfer sent or received, no matter the dollar amount or the parties involved.
• If the Originator is not required to provide the Beneficiary’s name, address, and account number on every wire transfer, this will have a significant detrimental impact on the financial institution’s suspicious activity monitoring, fraud detection, and sanctions compliance efforts.
• The October 2020 Notice of Proposed Rulemaking impacts cross-border funds transfers and the virtual currency industry. No date has yet been set for the publication of a Final Rule.
• A customer should not be allowed to substitute another name for the Originator on an outgoing funds transfer, as this exposes the financial institution to the risk of acting as a conduit for fraud, tax evasion, and other illicit activity, no matter how innocent or legitimate the customer’s request may seem.
• A financial institution that sends or receives aggregated funds transfers, or transfers for non-customers, should examine its existing processes to ensure compliance with the special rules for these activities.

How Alessa Can Help

Alessa is an integrated AML compliance software solution for due diligence, sanctions screening , real-time transaction monitoring , regulatory reporting and more. The solution integrates with existing core systems and includes:

• Identity verification and customer due diligence for KYC/KYB
• Real-time transaction monitoring and screening
• Sanctions, PEPs, watch list, crypto and other forms of screening
• Configurable risk scoring
• Automated regulatory reporting
• Advanced analytics like anomaly detection and machine learning
• Dashboards, workflows and case management

With Alessa, customers can monitor their wire transactions and ensure that the appropriate process is in place to collect and record the right information in order to comply with regulatory bodies. Contact us today to see how we can help you implement or enhance the AML program at your financial institution to comply with mandates such as the FinCEN Travel Rule.

[i] 15 USC 1693 et seq.

[ii] The Uniform Commercial Code (UCC) is a comprehensive set of laws governing all commercial transactions in the United States. It is not a federal law, but a uniformly adopted state law. Uniformity of law is essential in this area for the interstate transaction of business. Source: Uniform Law Commission, www.uniformlaws.org

[iii] 31 CFR 1010.100(hhh)

[iv] Financial Crimes Enforcement Network. “Application of FinCEN’s Regulations to Persons Administering, Exchanging, or Using Virtual Currencies.” FIN-2013-G001, 18 March 2013.

[v] Financial Actions Task Force. “Regulation of Virtual Assets.” 19 October 2018.

[vi] Financial Actions Task Force. “Public Statement – Mitigating Risks from Virtual Assets.” 22 February 2019.

[vii] Financial Crimes Enforcement Network. “Application of FinCEN’s Regulations to Certain Business Models Involving Convertible Virtual Currencies.” FIN-2019-G001, 9 May 2019.

[viii] Various codes are also required data on a Fedwire transfer; however, these codes are for system processing purposes and have no relation to originator or beneficiary data.

[ix] Financial Crimes Enforcement Network. “Funds ‘Travel’ Regulations: Questions and Answers.” FIN-2010-G004, 9 November 2010.

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Toobit integrates with code travel rule solution, strengthening compliance and security.

Singapore, April 05, 2024 (GLOBE NEWSWIRE) -- In a significant move to enhance regulatory compliance and ensure the highest standards of security, Toobit, a leading force in the cryptocurrency exchange market, is proud to announce its integration with the CODE Travel Rule solution, effective as of April 4, 2024. This strategic partnership marks Toobit's commitment to adhering to the rigorous global standards set by the Financial Action Task Force (FATF) and various regulatory bodies worldwide.

As the vanguard of innovation in the cryptocurrency space, Toobit has consistently been at the forefront, offering traders and investors unparalleled safety, groundbreaking features, and a user-centric approach that has cemented its position as the preferred platform globally. The integration with the CODE Travel Rule solution is a testament to Toobit's dedication to compliance, safety, and the provision of technology-based solutions that not only meet but exceed the international standards for anti-money laundering (AML) compliance.

The Financial Action Task Force's Travel Rule is a critical regulatory standard aimed at curbing money laundering and terrorist financing. It mandates virtual asset service providers (VASPs), including cryptocurrency exchanges, to disclose certain transaction details, thereby ensuring a transparent and secure digital asset transfer process. By partnering with CODE, a Travel Rule solution embraced by major exchanges, Toobit demonstrates its commitment to the highest levels of compliance and security.

Toobit's integration with CODE positions it as a proactive participant in the global effort to ensure a secure and compliant digital asset environment. This alliance not only showcases Toobit's adherence to critical regulatory requirements but also reinforces its status as a preferred platform for traders and investors worldwide, who value safety, transparency, and innovation.

The cryptocurrency community warmly welcomes Toobit's integration into the CODE alliance, a testament to its dedication to enhancing the trading environment through compliance with global standards. This strategic move is seen as a significant step forward in Toobit's mission to foster a secure, transparent, and professional trading landscape for its global user base.

About Toobit Toobit is a premier cryptocurrency exchange platform, leading the industry with innovative features, user-friendly experiences, and an unwavering commitment to safety and compliance. Catering to millions of users worldwide, Toobit offers a wide array of trading options, setting new standards in the cryptocurrency exchange domain. Our mission is to empower traders and investors by providing access to the global digital asset economy in a secure and compliant environment.

Yvonne Z Toobit market at toobit.com

• BSA/AML Manual

Assessing Compliance with BSA Regulatory Requirements

• Funds Transfers Recordkeeping

Funds Transfers Recordkeeping—Overview

Objective . Assess the bank’s compliance with statutory and regulatory requirements for funds transfers. This section covers the regulatory requirements as set forth in the BSA. Refer to the expanded sections of this manual for discussions and procedures regarding specific money laundering risks for funds transfer activities.

Funds transfer systems enable the instantaneous transfer of funds, including both domestic and cross-border transfers. Consequently these systems can present an attractive method to disguise the source of funds derived from illegal activity. The BSA was amended by the Annunzio–Wylie Anti-Money Laundering Act of 1992 to authorize the U.S. Treasury and the Federal Reserve Board to prescribe regulations for domestic and international funds transfers.

In 1995, the U.S. Treasury and the Board of Governors of the Federal Reserve System issued a final rule on recordkeeping requirements concerning payment orders by banks ( 31 CFR 1010.410 ). 110 31 CFR 1020.410(a) is the recordkeeping rule for banks, and 31 CFR 1010.410(e) imposes similar requirements for nonbank financial institutions that engage in funds transfers. The procedures in this core overview section address only the rules for banks in 31 CFR 1020.410(a) . The rule requires each bank involved in funds transfers 111 Funds transfer is defined under 31 CFR 1010.100. Funds transfers governed by the Electronic Fund Transfer Act of 1978, as well as any other funds transfers that are made through an automated clearing house, an automated teller machine, or a point-of-sale system, are excluded from this definition and exempt from the requirements of 31 CFR 1020.410(a), and 31 CFR 1010.410(e) and (f). to collect and retain certain information in connection with funds transfers of $3,000 or more. 112 31 CFR 1020.410(a)(6) provides exceptions to the funds transfer requirements. Funds transfers where both the originator and the beneficiary are the same person and the originator's bank and the beneficiary's bank are the same bank are not subject to the recordkeeping requirements for funds transfers. Additionally, exceptions are provided from the recordkeeping requirements for funds transfers where the originator and beneficiary are: a bank; a wholly owned domestic subsidiary of a bank chartered in the United States; a broker or dealer in securities; a wholly owned domestic subsidiary of a broker or dealer in securities; the United States; a state or local government; or a federal, state or local government agency or instrumentality. The information required to be collected and retained depends on the bank’s role in the particular funds transfer (originator’s bank, intermediary bank, or beneficiary’s bank). 113 These terms are defined under 31 CFR 1010.100 . The requirements may also vary depending on whether an originator or beneficiary is an established customer of a bank and whether a payment order is made in person or otherwise.

Also in 1995, the U.S. Treasury issued a final rule that requires all financial institutions to include certain information in transmittal orders for funds transfers of $3,000 or more ( 31 CFR 1010.410 ). 114 The rule applies to both banks and nonbanks (31 CFR 1010.410(f). Because it is broader in scope, the Travel Rule uses more expansive terms, such as "transmittal order" instead of "payment order" and "transmittor's financial institution" instead of "originating bank." The broader terms include the bank-specific terms. This requirement is commonly referred to as the "Travel Rule."

Responsibilities of Originator’s Banks

Recordkeeping requirements.

For each payment order in the amount of $3,000 or more that a bank accepts as an originator’s bank, the bank must obtain and retain the following records ( 31 CFR 1020.410(a)(1)(i) ):

• Name and address of the originator.
• Amount of the payment order.
• Date of the payment order.
• Any payment instructions.
• Identity of the beneficiary’s institution.
• Name and address of the beneficiary.
• Account number of the beneficiary.
• Any other specific identifier of the beneficiary.

Additional Recordkeeping Requirements for Nonestablished Customers

If the originator is not an established customer of the bank, the originator’s bank must collect and retain the information listed above. In addition, the originator’s bank must collect and retain other information, depending on whether the payment order is made in person.

Payment Orders Made in Person

If the payment order is made in person, the originator’s bank must verify the identity of the person placing the payment order before it accepts the order. If it accepts the payment order, the originator’s financial institution must obtain and retain the following records:

• Name and address of the person placing the order.
• Type of identification reviewed.
• Number of the identification document (e.g., driver’s license).
• The person’s taxpayer identification number (TIN) (e.g., Social Security number (SSN) or employer identification number (EIN)) or, if none, the alien identification number or passport number and country of issuance, or a notation in the record of the lack thereof. If the originator’s bank has knowledge that the person placing the payment order is not the originator, the originator’s bank must obtain and record the originator’s TIN (e.g., SSN or EIN) or, if none, the alien identification number or passport number and country of issuance, or a notation of the lack thereof.

Payment Orders Not Made in Person

If a payment order is not made in person, the originator’s bank must obtain and retain the following records:

• Name and address of the person placing the payment order.
• The person’s TIN (e.g., SSN or EIN) or, if none, the alien identification number or passport number and country of issuance, or a notation in the record of the lack thereof, and a copy or record of the method of payment (e.g., check or credit card transaction) for the funds transfer. If the originator’s bank has knowledge that the person placing the payment order is not the originator, the originator’s bank must obtain and record the originator’s TIN (e.g., SSN or EIN) or, if none, the alien identification number or passport number and country of issuance, or a notation of the lack thereof.

Retrievability

Information retained must be retrievable by reference to the name of the originator. When the originator is an established customer of the bank and has an account used for funds transfers, information retained must also be retrievable by account number ( 31 CFR 1010.410(a)(4) ). Records must be maintained for five years.

Travel Rule Requirement

For funds transmittals of $3,000 or more, the transmittor’s financial institution must include the following information in the transmittal order at the time that a transmittal order is sent to a receiving financial institution ( 31 CFR 1010.410(f)(1) ):

• Name of the transmittor, and, if the payment is ordered from an account, the account number of the transmittor.
• Address of the transmittor.
• Amount of the transmittal order.
• Date of the transmittal order.
• Identity of the recipient’s financial institution.
• Name and address of the recipient.
• Account number of the recipient.
• Any other specific identifier of the recipient.
• Either the name and address or the numerical identifier of the transmittor’s financial institution.

There are no recordkeeping requirements in the Travel Rule.

Responsibilities of Intermediary Institutions

For each payment order of $3,000 or more that a bank accepts as an intermediary bank, the bank must retain a record of the payment order.

Travel Rule Requirements

For funds transmittals of $3,000 or more, the intermediary financial institution must include the following information if received from the sender in a transmittal order at the time that order is sent to a receiving financial institution ( 31 CFR 1010.410(f)(2) ):

• Name and account number of the transmittor.

Intermediary financial institutions must pass on all of the information received from a transmittor’s financial institution or the preceding financial institution, but they have no duty to obtain information not provided by the transmittor’s financial institution or the preceding financial institution.

Responsibilities of Beneficiary’s Banks

For each payment order of $3,000 or more that a bank accepts as a beneficiary’s bank, the bank must retain a record of the payment order.

If the beneficiary is not an established customer of the bank, the beneficiary’s institution must retain the following information for each payment order of $3,000 or more.

Proceeds Delivered in Person

If proceeds are delivered in person to the beneficiary or its representative or agent, the institution must verify the identity of the person receiving the proceeds and retain a record of the following:

• Name and address.
• The type of document reviewed.
• The number of the identification document.
• The person’s TIN, or, if none, the alien identification number or passport number and country of issuance, or a notation in the record of the lack thereof.
• If the institution has knowledge that the person receiving the proceeds is not the beneficiary, the institution must obtain and retain a record of the beneficiary’s name and address, as well as the beneficiary’s identification.

Proceeds Not Delivered in Person

If proceeds are not delivered in person, the institution must retain a copy of the check or other instrument used to effect the payment, or the institution must record the information on the instrument. The institution must also record the name and address of the person to whom it was sent.

Information retained must be retrievable by reference to the name of the beneficiary. When the beneficiary is an established customer of the institution and has an account used for funds transfers, information retained must also be retrievable by account number ( 31 CFR 1020.410(a)(4) ).

There are no Travel Rule requirements for beneficiary banks.

Abbreviations and Addresses

Although the Travel Rule does not permit the use of coded names or pseudonyms, the rule does allow the use of abbreviated names, names reflecting different accounts of a corporation (e.g., XYZ Payroll Account), and trade and assumed names of a business ("doing business as") or the names of unincorporated divisions or departments of the business.

Customer Address

The term "address," as used in 31 CFR 1010.410(f) , is not defined. Previously issued guidance from FinCEN had been interpreted as not allowing the use of mailing addresses in a transmittal order when a street address is known to the transmittor’s financial institution. However, in the November 28, 2003, Federal Register notice, 115 68 Fed. Reg. 66708 (November 23, 2003). FinCEN issued a regulatory interpretation that states the Travel Rule should allow the use of mailing addresses, including post office boxes, in the transmittor address field of transmittal orders in certain circumstances.

The regulatory interpretation states that, for purposes of 31 CFR 1010.410(f) , the term "address" means either the transmittor’s street address or the transmittor’s address maintained in the financial institution’s automated CIF (such as a mailing address including a post office box) as long as the institution maintains the transmittor’s address 116 Consistent with 31 CFR 1020.220 , an "address" for purposes of the Travel Rule is as follows: for an individual, "address" is a residential or business street address, an Army Post Office Box or a Fleet Post Office Box, or the residential or business street address of next of kin or another contact person for persons who do not have a residential or business address. For a person other than an individual (such as a corporation, partnership, or trust), "address" is a principal place of business, local office, or other physical location. However, while 31 CFR 1020.220 applies only to new customers opening accounts on or after October 1, 2003, and while the rule exempt funds transfers from the definition of "account," for banks, the Travel Rule applies to all transmittals of funds of $3,000 or more, whether or not the transmittor is a customer for purposes of 31 CFR 1020.220. on file and the address information is retrievable upon request by law enforcement.

Table of Contents

• Introduction
• Scoping and Planning
• BSA/AML Risk Assessment
• Assessing the BSA/AML Compliance Program
• Developing Conclusions and Finalizing the Exam
• Customer Identification Program
• Customer Due Diligence
• Beneficial Ownership Requirements for Legal Entity Customers
• Suspicious Activity Reporting
• Currency Transaction Reporting
• Transactions of Exempt Persons
• Special Information Sharing Procedures
• Purchase and Sale of Certain Monetary Instruments Recordkeeping
• Due Diligence Programs for Correspondent Accounts for Foreign Financial Institutions
• Due Diligence Programs for Private Banking Accounts
• Prohibition on Correspondent Accounts for Foreign Shell Banks; Records of Owners and Agents
• Summons or Subpoena of Foreign Bank Records
• Reporting Obligations on Foreign Bank Relationships with Iranian-Linked Financial Institutions
• Special Measures
• Reports of Foreign Financial Accounts
• International Transportation of Currency or Monetary Instruments Reporting
• Office of Foreign Assets Control
• Program Structures
• Risks Associated with Money Laundering and Terrorist Financing

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13 January 2020

Fatf travel rule.

Insights FATF Travel Rule

The FATF Travel Rule is an update to the existing FATF Recommendation 16 , which concerns cross-border and domestic wire transfers. The update is intended to address the AML/CFT challenges associated with the increasing global use of cryptocurrency and to help law enforcement agencies better track criminals who use crypto laundering . The Travel Rule’s regulatory focus means that it will have specific implications for virtual asset service providers (VASPs), such as cryptocurrency exchanges and cryptocurrency wallet providers. 

Officially adopted by the FATF on June 21, 2019 , the progress that member-states have made in implementing the Travel Rule will be reviewed during the FATF plenary session in June 2020 as well as whether the guidance has remained fit for purpose given the speed with which the technology is moving. Given its far-reaching regulatory scope, all VASPs and other obligated entities should be familiar with the Travel Rule and the AML/CFT compliance obligations that it entails.

What is the FATF Travel Rule?

Under Recommendation 16’s Travel Rule, the originators and beneficiaries of all transfers of digital funds must exchange identifying information. The rule will apply to all VASPs, financial institutions and obliged entities. Additionally, the originators and beneficiaries involved in a transfer must be able to guarantee the accuracy of the information they send to the other.

Prior to the introduction of the FATF Travel Rule, companies that conducted wire transfers of conventional funds already had to issue a range of reciprocal information. The new rule essentially extends that obligation to cryptocurrency transfers. In principle, the Travel Rule is similar to a number of existing global audit regulations: the United States’ Bank Secrecy Act , for example, requires an exchange of information for funds of a value equal or greater than $3,000.

What information does the Travel Rule require?

As part of FATF Recommendation 16, originators of virtual asset transfers must submit the following information to beneficiaries:

• Originator name
• Account number (where this is being used to process the transaction)
• Physical address
• National identity number, customer identification number or other unique identity number
• Date of birth and place of birth

Beneficiaries must submit the following information to originators:

• Beneficiary name
• Account number or virtual wallet number (where this is necessary to process the transaction)

How will the Travel Rule benefit AML/CFT efforts?

The rapid growth of cryptocurrency usage has led to regulatory inconsistency in jurisdictions across the world and has created opportunities for money launderers and terrorists to commit financial crimes using virtual assets. The anonymity of blockchain technology is particularly useful for money launderers: while the originator of cryptocurrency transfers provides verified information (name, address, etc.), the beneficiary is able to remain anonymous.

The FATF Travel Rule will help AML/CFT efforts by enhancing the audit trail when virtual assets are transferred between entities such as exchanges and wallets. The new information collection rules will mean that financial authorities are better able to detect and prevent money laundering activities involving cryptocurrency and will also help deter criminals by reducing the number of VASPs through which they can move funds.  

What are the challenges to implementing the Travel Rule?

Information sharing is at the heart of the FATF Travel Rule, but given the relative lack of regulation in the cryptocurrency industry, it represents a significant compliance obligation for many VASPs. 

The lack of identifying ownership information necessary to facilitate cryptocurrency transfers means that VASPs and financial institutions must develop AML solutions that allow them to share the necessary data and that comply with existing privacy laws, such as the EU’s General Data Protection Regulation and California’s Consumer Privacy Act .

In addition to fulfilling those regulatory obligations, VASPs must consider the costs and administrative effort that their FATF Travel Rule solutions will involve and find a way to keep cryptocurrency transactions efficient and cost-effective for customers. 

How can firms comply with the FATF Travel Rule?

An ideal Travel Rule solution should satisfy regulatory obligations without disrupting customer service needs. Accordingly, the FATF has suggested a range of characteristics that a Travel Rule solution should feature to meet the objectives of Recommendation 16:

• The solution should minimize both regulatory impact and barriers to adoption and be easy to integrate with an existing AML/CFT program.
• It should be affordable and open source (or non-profit) in order to be accessible for smaller VASPs and innovative start-ups. 
• It should contribute to a global regulatory standard of virtual asset transfers. 
• It should be flexible enough to accommodate future innovations and advances in technology.
• It should complement the efforts of law enforcement agencies to prosecute money launderers and terrorists by proactively detecting suspicious activities.
• It should be scalable and maintainable and be able to gain widespread industry support.

While the FATF Travel Rule is technologically neutral, it suggests a number of approaches that may help VASPs implement a Travel Rule solution by leveraging existing technology and infrastructure . These include:

• Public and private keys: Created in pairs for each entity involved in a digital transmission, keys encrypt and decrypt information only for originators and beneficiaries.
• Transport layer security/secure sockets layers: TLS and SSL connections also make use of public and private keys to secure transmissions made over the internet. 
• X.509 certification: Digital certificates administered by authorities using the X.509 PKI standard. X.509 certificates (and attribute certificates) further reinforce the veracity of public keys and are used worldwide in the public and private sectors. 
• API technology: Providing routines and protocols for software applications and specifying how different applications should interact with each other. 

FATF organizations and authorities in FATF member states are considering implementation approaches to Recommendation 16, including establishing a centralized, global database that would collect information on every VASP worldwide and their customers . 

Under this proposal, VASPs would register in their home countries to receive a unique identification code (similar to a bank SWIFT code). The unique code attached to each VASP would then be uploaded to the global database that would connect all VASPs operating under the Recommendation 16 FATF Travel Rule. Accordingly, during subsequent digital asset transfers, VASPs would use their respective identifier codes to verify the information they are exchanging in compliance with the Travel Rule.

A Guide to AML for Crypto Firms

Build a best practice AML program for your crypto firm and stay ahead of the latest regulatory trends with this guide.

Originally published 13 January 2020, updated 16 January 2023

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Travel rule for electronic funds and virtual currency transfers

This guidance came into effect on June 1, 2021.

This guidance is applicable to financial entities (FEs), money services businesses (MSBs), foreign MSBs (FMSBs), and casinos. It explains your requirement under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated Regulations to include or obtain certain information in relation to an electronic funds transfer (EFT) or a virtual currency (VC) transfer. This requirement is commonly referred to as the travel rule.

**Note : Throughout this guidance EFTs refer to international EFTs and EFTs within Canada sent via a SWIFT MT-103 message or its equivalent. Footnote 1

Who is this guidance for

• Financial entities (FEs)
• Money services businesses (MSBs)
• Foreign money services businesses (FMSBs)

In this guidance

What is the travel rule and when does it apply.

• What should I do if I receive an EFT or a VC transfer that does not include the required information?

The travel rule is the requirement to ensure that specific information (listed below) is included with the information sent or received in an EFT or a VC transfer Footnote 2 . Information received under the travel rule cannot be removed from a transfer. Footnote 3

The travel rule is not a separate record keeping requirement, however, fulfilling it will help you meet your VC and EFT record keeping and reporting requirements.

EFT — travel rule

FEs, MSBs, FMSBs and casinos must include the travel rule information when they initiate an EFT for which an EFT record must be kept. Footnote 4

The required travel rule information for EFTs is : Footnote 5

• the name, address and account number or other reference number (if any) of the person or entity who requested the transfer (originator information);
• the name and address of the beneficiary; and
• if applicable, the beneficiary's account number or other reference number.

FEs, MSBs, FMSBs and casinos must also take reasonable measures to ensure that the travel rule information is included when they receive an EFT , either as an intermediary or as the final recipient. Footnote 6

When sending an incoming or outgoing EFT (after receiving it as an intermediary), FEs, MSBs, FMSBs, and casinos must include the travel rule information they received or obtained through reasonable measures.

For more information on your reporting and record keeping information, see FINTRAC's guidance on:

• Reporting electronic funds transfers to FINTRAC
• Record keeping requirements for financial entities
• Record keeping requirements for money services businesses and foreign money services businesses
• Record keeping requirements for casinos

VC — travel rule

FEs, MSBs and FMSBs must include the travel rule information when they send VC transfers, and must take reasonable measures to ensure that this information is included when they receive VC transfers which require a VC record to be kept . Footnote 7

The required travel rule information for VC transfers is : Footnote 8

• the name, address and the account number or other reference number (if any) of the person or entity who requested the transfer (originator information); and
• the name, address and the account number or other reference number (if any) of the beneficiary.

For more information on your reporting and record keeping requirements for VC transfers, see the following FINTRAC guidance:

• Reporting large virtual currency transactions to FINTRAC

2. What should I do if I receive an EFT or a VC transfer that does not include the required information?

If you receive an EFT or a VC transfer that should include the travel rule information but does not, you must take reasonable measures to obtain that information. Footnote 9 These reasonable measures should be outlined in your policies and procedures.

You must also develop in writing and apply risk-based policies and procedures for determining what to do when, after taking reasonable measures, you were unable to obtain the travel rule information. Your policies and procedures must address under which circumstances you allow, suspend or reject the transaction, and outline any follow-up measures you will take. Footnote 10

For more information, see FINTRAC's Compliance programs requirements guidance .

Details and history

Published: May 2021

For assistance

If you have questions about this guidance, please contact FINTRAC by email at  [email protected] .

Definitions

A chartered accountant, a certified general accountant, a certified management accountant or, if applicable, a chartered professional accountant. ( comptable )

Reference: Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFR), SOR/2002-184, s. 1(2).

An entity that is engaged in the business of providing accounting services to the public and has at least one partner, employee or administrator that is an accountant. ( cabinet d'expertise comptable )

Reference: PCMLTFR, SOR/2002-184, s. 1(2).

The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). ( la Loi )

Reference: Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations (PCMLTFAMPR), SOR/2007-292, s. 1, Proceeds of Crime (Money Laundering) and Terrorist Financing Registration Regulations (PCMLTFRR), SOR/2007-121, s. 1, PCMLTFR, SOR/2002-184, s. 1(2), and Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations (PCMLTFSTRR), SOR/2001-317, s. 1(2).

Civil penalties that may be issued to reporting entities by FINTRAC for non-compliance with the PCMLTFA and associated Regulations. ( pénalité administrative pécuniaire [PAP] )

An entity is affiliated with another entity if one of them is wholly owned by the other, if both are wholly owned by the same entity or if their financial statements are consolidated. ( entité du même groupe )

Reference: PCMLTFR, SOR/2002-184, s. 4.

Has the same meaning as in subsection 248(1) of the Income Tax Act . ( rente )

A time period that falls in-between immediately and as soon as possible, within which a suspicious transaction report (STR) must be submitted to FINTRAC. The completion and submission of the STR should take priority over other tasks. In this context, the report must be completed promptly, taking into account the facts and circumstances of the situation. While some delay is permitted, it must have a reasonable explanation. ( aussitôt que possible )

Occurs when an individual or entity starts to conduct a transaction that is not completed. For example, a client or a potential client walks away from conducting a $10,000 cash deposit. ( opération tentée )

In respect of verifying identity, means genuine and having the character of an original, credible, and reliable document or record. ( authentique )

A person who is authorized under subsection 45(2). ( personne autorisée )

Reference: Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), S.C. 2000, c 17, s. 2(1).

A person who is authorized by a holder of a prepaid payment product account to have electronic access to funds or virtual currency available in the account by means of a prepaid payment product that is connected to it. ( utilisateur autorisé )

Beneficial owners are the individuals who are the trustees, and known beneficiaries and settlors of a trust, or who directly or indirectly own or control 25% or more of i) the shares of a corporation or ii) an entity other than a corporation or trust, such as a partnership. The ultimate beneficial owner(s) cannot be another corporation or entity; it must be the actual individual(s) who owns or controls the entity. ( bénéficiaire effectif )

A beneficiary is the individual or entity that will benefit from a transaction or to which the final remittance is made. ( bénéficiaire )

A branch is a part of your business at a distinct location other than your main office. ( succursale )

An entity that carries on the business of providing notary services to the public in British Columbia in accordance with the Notaries Act, R.S.B.C. 1996, c. 334. ( société de notaires de la Colombie-Britannique )

A person who is a member of the Society of Notaries Public of British Columbia. ( notaire public de la Colombie-Britannique )

Coins referred to in section 7 of the Currency Act, notes issued by the Bank of Canada under the Bank of Canada Act that are intended for circulation in Canada or coins or bank notes of countries other than Canada. ( espèces )

Reference: PCMLTFR, SOR/2002-184, s. 1(2) and PCMLTFSTRR, SOR/2001-317, s. 1(2).

A government, organization, board or operator that is referred to in any of paragraphs 5(k) to (k.3) of the Act. ( casino )

Reference: PCMLTFR, SOR/2002-184, s 1(2) and PCMLTFSTRR, SOR/2001-317, s. 1(2).

An individual that holds the title of professional certified translator granted by a Canadian provincial or territorial association or body that is competent under Canadian provincial or territorial law to issue such certification. ( traducteur agréé )

A clarification request is a method used to communicate with money services businesses (MSBs) or foreign money services businesses (FMSBs) when FINTRAC needs more information about their registration form. This request is usually sent by email. ( demande de précisions )

A person or entity that engages in a financial transaction with another person or entity. ( client )

Reference: PCMLTFA, S.C. 2000, c 17, s. 2(1).

The identifying information that you have obtained on your clients, such as name, address, telephone number, occupation or nature of principal business, and date of birth for an individual. ( renseignements d'identification du client )

For the purpose of the criminal record check submitted with an application for registration, a competent authority is any person or organization that has the legally delegated or invested authority, capacity, or power to issue criminal record checks. ( autorité compétente )

Is a transaction conducted by a person or entity, that is completed and results in the movement of funds, virtual currency, or the purchase or sale of an asset. ( opération effectuée )

With respect to a reportable transaction, information related to the instructions provided by the person or entity making the request to the reporting entity to complete a transaction. For example, an individual arrives at a bank and requests to purchase a bank draft. The completing action is the details of how the reporting entity fulfilled the person or entity’s instructions which led to the transaction being completed. This includes what the funds or virtual currency initially brought to the reporting entity was used for (see “disposition”). A transaction may have one or more completing actions depending on the instructions provided by the person or entity. ( action d’achèvement )

The individual, with the necessary authority, that you appoint to be responsible for the implementation of your compliance program. ( agent de conformité )

Written methodology outlining the obligations applicable to your business under the PCMLTFA and its associated Regulations and the corresponding processes and controls you put in place to address your obligations. ( politiques et procédures de conformité )

All elements (compliance officer, policies and procedures, risk assessment, training program, effectiveness review) that you, as a reporting entity, are legally required to have under the PCMLTFA and its associated Regulations to ensure that you meet all your obligations. ( programme de conformité )

Clarifies a set of circumstances or provides an explanation of a situation or financial transaction that can be understood and assessed. ( contexte )

A relationship created by an agreement or arrangement under which an entity referred to in any of paragraphs 5(a), (b), (d),(e) and (e.1) or an entity that is referred to in section 5 and that is prescribed undertakes to provide to a prescribed foreign entity prescribed services or international electronic funds transfers, cash management or cheque clearing services. ( relation de correspondant bancaire )

Reference: PCMLTFA, S.C. 2000, c 17, s. 9.4(3) and PCMLTFR, SOR/2002-184, s. 16(1)(b).

The country where an individual has lived continuously for 12 months or more. The individual must have a dwelling in the country concerned. For greater certainty, a person only has one country of residence no matter how many dwelling places they may have, inside or outside of that country. ( pays de résidence )

A credit card acquiring business is a financial entity that has an agreement with a merchant to provide the following services:

• enabling a merchant to accept credit card payments by cardholders for goods and services and to receive payments for credit card purchases;
• processing services, payment settlements and providing point-of-sale equipment (such as computer terminals); and
• providing other ancillary services to the merchant.

A central cooperative credit society, as defined in section 2 of the Cooperative Credit Associations Act , or a credit union central or a federation of credit unions or caisses populaires that is regulated by a provincial Act other than one enacted by the legislature of Quebec. ( centrale de caisses de crédit )

A website or an application or other software that is used to raise funds or virtual currency through donations. ( plateforme de sociofinancement )

The provision and maintenance of a crowdfunding platform for use by other persons or entities to raise funds or virtual currency for themselves or for persons or entities specified by them. ( services de plateforme de sociofinancement )

In respect of a document or source of information that is used to verify identity, is up to date, and, in the case of a government-issued photo identification document, must not have been expired when the ID was verified. ( à jour )

A person or entity that, in the course of their business activities, buys or sells precious metals, precious stones or jewellery. It includes a department or an agent of His Majesty in right of Canada or an agent or mandatary of His Majesty in right of a province when the department or the agent or mandatary carries out the activity, referred to in subsection 65(1), of selling precious metals to the public. ( négociant en métaux précieux et pierres précieuses )

Has the same meaning as in subsection 248(1) of the Income Tax Act . ( régime de participation différée aux bénéfices )

A record that sets out:

• (a) the date of the deposit;
• (b) the name of the person or entity that makes the deposit;
• (c) the amount of the deposit and of any part of it that is made in cash;
• (d) the method by which the deposit is made; and
• (e) the number of the account into which the deposit is made and the name of each account holder.

A business is directing services at persons or entities in Canada if at least one of the following applies:

• The business's marketing or advertising is directed at persons or entities located in Canada;
• The business operates a ".ca" domain name; or,
• The business is listed in a Canadian business directory.

Additional criteria may be considered, such as if the business describes its services being offered in Canada or actively seeks feedback from persons or entities in Canada. ( diriger des services )

For the purpose of section 151 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFR), a digital ledger that is maintained by multiple persons or entities and that can only be modified by a consensus of those persons or entities. ( registres distribués )

Reference: PCMLTFR, SOR/2002-184, s. 151(2).

With respect to a reportable transaction, the disposition is what the funds or virtual currency was used for. For example, an individual arrives at a bank with cash and purchases a bank draft. The disposition is the purchase of the bank draft. ( répartition )

The transmission—by any electronic, magnetic or optical means—of instructions for the transfer of funds, including a transmission of instructions that is initiated and finally received by the same person or entity. In the case of SWIFT messages, only SWIFT MT-103 messages and their equivalent are included. It does not include a transmission or instructions for the transfer of funds:

• (a) that involves the beneficiary withdrawing cash from their account;
• (b) that is carried out by means of a direct deposit or pre-authorized debit;
• (c) that is carried out by cheque imaging and presentment
• (d) that is both initiated and finally received by persons or entities that are acting to clear or settle payment obligations between themselves; or
• (e) that is initiated or finally received by a person or entity referred to in paragraphs 5(a) to (h.1) of the Act for the purpose of internal treasury management, including the management of their financial assets and liabilities, if one of the parties to the transaction is a subsidiary of the other or if they are subsidiaries of the same corporation.

Has the same meaning as in subsection 248(1) of the Income Tax Act . ( régime de participation des employés aux bénéfices )

A body corporate, a trust, a partnership, a fund or an unincorporated association or organization. ( entité )

Actual events, actions, occurrences or elements that exist or are known to have happened or existed. Facts are not opinions. For example, facts surrounding a transaction or multiple transactions could include the date, time, location, amount or type of transaction or could include the account details, particular business lines, or the client's financial history. ( faits )

For the purposes of subsection 9.3(1) of the Act, a prescribed family member of a politically exposed foreign person, a politically exposed domestic person or a head of an international organization is:

• (a) their spouse or common-law partner;
• (b) their child;
• (c) their mother or father;
• (d) the mother or father of their spouse or common-law partner; or
• (e) a child of their mother or father.

Reference: PCMLTFR, SOR/2002-184, s. 2(1).

A currency that is issued by a country and is designated as legal tender in that country. ( monnaie fiduciaire )

In respect of an electronic funds transfer, means the receipt of the instructions by the person or entity that is to make the remittance to a beneficiary. ( destinataire )

• (a) an entity that is referred to in any of paragraphs 5(a), (b) and (d) to (f) of the Act;
• (b) a financial services cooperative;
• (i) loans that are made by the insurer to a policy holder if the insured person has a terminal illness that significantly reduces their life expectancy and the loan is secured by the value of an insurance policy;
• (ii) loans that are made by the insurer to the policy holder for the sole purpose of funding the life insurance policy; and
• (iii) advance payments to which the policy holder is entitles that are made to them by the insurer;
• (d) a credit union central when it offers financial services to a person, or to an entity that is not a member of that credit union central; and
• (e) a department, or an entity that is an agent of His Majesty in right of Canada or an agent or mandatary of His Majesty in right of a province, when it carries out an activity referred to in section 76.

The Financial Action Task Force on Money Laundering established in 1989. ( Groupe d'action financière )

A financial services cooperative that is regulated by an Act respecting financial services cooperatives, CQLR, c. C-67.3, other than a caisse populaire. ( coopérative de services financiers )

A fiat currency that is issued by a country other than Canada. ( devise )

An exchange, at the request of another person or entity, of one fiat currency for another. ( opération de change en devise )

A record respecting a foreign currency exchange transaction—including an entry in a transaction register—that sets out:

• (a) the date of the transaction;
• (b) in the case of a transaction of $3,000 or more, the name and address of the person or entity that requests the exchange, the nature of their principal business or their occupation and, in the case of a person, their date of birth;
• (c) the type and amount of each of the fiat currencies involved in the payment made and received by the person or entity that requests the exchange;
• (d) the method by which the payment is made and received;
• (e) the exchange rates used and their source;
• (f) the number of every account that is affected by the transaction, the type of account and the name of each account holder; and
• (g) every reference number that is connected to the transaction and has a function equivalent to that of an account number.

Persons and entities that do not have a place of business in Canada, that are engaged in the business of providing at least one of the following services that is directed at persons or entities in Canada, and that provide those services to their clients in Canada:

• (i) foreign exchange dealing,
• (ii) remitting funds or transmitting funds by any means or through any person, entity or electronic funds transfer network,
• (iii) issuing or redeeming money orders, traveller's cheques or other similar negotiable instruments except for cheques payable to a named person or entity,
• (iv) dealing in virtual currencies, or
• (v) any prescribed service.

Reference: PCMLTFA, S.C. 2000, c 17, s. 5(h.1), PCMLTFRR, SOR/2007-121, s. 1 and PCMLTFR, SOR/2002-184, s. 1(2).

Except for the purposes of Part 2, means a country other than Canada and includes any political subdivision or territory of a foreign state. ( État étranger )

• (a) cash and other fiat currencies, and securities, negotiable instruments or other financial instruments that indicate a title or right to or interest in them; or
• (b) a private key of a cryptographic system that enables a person or entity to have access to a fiat currency other than cash.

For greater certainty, it does not include virtual currency. ( fonds )

A person who, at a given time, holds—or has held within a prescribed period before that time—the office or position of head of

• a) an international organization that is established by the governments of states;
• b) an institution of an organization referred to in paragraph (a); or
• c) an international sports organization.

Reference: PCMLTFA, S.C. 2000, c 17, s. 9.3(3).

In respect of submitting a Terrorist Property Report (TPR), the time period within which a TPR must be submitted, which does not allow for any delay prior to submission. ( immédiatement )

A record that sets out the name and address of a person or entity and:

• (a) in the case of a person, their date of birth and the nature of their principal business or their occupation; and
• (b) in the case of an entity, the nature of its principal business.

In respect of an electronic funds transfer, means the first transmission of the instructions for the transfer of funds. ( amorcer )

For the purpose of section 15 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFR), means a trust that is established by a corporation or other entity for a particular business purpose and includes a pension plan trust, a pension master trust, a supplemental pension plan trust, a mutual fund trust, a pooled fund trust, a registered retirement savings plan trust, a registered retirement income fund trust, a registered education savings plan trust, a group registered retirement savings plan trust, a deferred profit sharing plan trust, an employee profit sharing plan trust, a retirement compensation arrangement trust, an employee savings plan trust, a health and welfare trust, an unemployment benefit plan trust, a foreign insurance company trust, a foreign reinsurance trust, a reinsurance trust, a real estate investment trust, an environmental trust and a trust established in respect of endowment, a foundation or a registered charity. ( fiducie institutionnelle )

Reference: PCMLTFR, SOR/2002-184, s. 15(2).

An electronic funds transfer other than for the transfer of funds within Canada. ( télévirement international )

A personal trust, other than a trust created by will. ( fiducie entre vifs )

Objects that are made of gold, silver, palladium, platinum, pearls or precious stones and that are intended to be worn as a personal adornment. ( bijou )

A record that indicates the receipt of an amount of $10,000 or more in cash in a single transaction and that contains the following information:

• (a) the date of the receipt;
• (b) if the amount is received for deposit into an account, the number of the account, the name of each account holder and the time of the deposit or an indication that the deposit is made in a night deposit box outside the recipient's normal business hours;
• (c) the name and address of every other person or entity that is involved in the transaction, the nature of their principal business or their occupation and, in the case of a person, their date of birth;
• (d) the type and amount of each fiat currency involved in the receipt;
• (e) the method by which the cash is received;
• (f) if applicable, the exchange rates used and their source;
• (g) the number of every other account that is affected by the transaction, the type of account and the name of each account holder
• (h) every reference number that is connected to the transaction and has a function equivalent to that of an account number;
• (i) the purpose of the transaction;
• (i) the method of remittance;
• (ii) if the remittance is in funds, the type and amount of each type of funds involved;
• (iii) if the remittance is not in funds, the type of remittance and its value, if different from the amount of cash received; and
• (iv) the name of every person or entity involved in the remittance and their account number or policy number or, if they have no account number or policy number, their identifying number; and
• (i) the type of precious metals, precious stones or jewellery;
• (ii) the value of the precious metals, precious stones or jewellery, if different from the amount of cash received, and
• (iii) the wholesale value of the precious metals, precious stones or jewellery.

A record that indicates the receipt of an amount of $10,000 or more in virtual currency in a single transaction and that contains the following information:

• (b) if the amount is received for deposit into an account, the name of each account holder;
• (d) the type and amount of each virtual currency involved in the receipt;
• (f) the number of every other account that is affected by the transaction, the type of account and the name of each account holder;
• (g) every reference number that is connected to the transaction and has a function equivalent to that of an account number;
• (h) every transaction identifier, including the sending and receiving addresses; and
• (ii) the value of the precious metals, precious stones or jewellery, if different from the amount of virtual currency received; and

A person or entity that is authorized under provincial legislation to carry on the business of arranging contracts of life insurance. ( représentant d'assurance-vie )

A life company or foreign life company to which the Insurance Companies Act applies or a life insurance company regulated by a provincial Act. ( société d'assurance-vie )

Has the same meaning as in section 1 of the Regulations Implementing the United Nations Resolutions on the Suppression of Terrorism . ( personne inscrite )

Reference: PCMLTFSTRR, SOR/2001-317, s. 1(2).

Life insurance brokers or agents that act as facilitators between other life insurance brokers or agents and life insurance companies.  MGAs typically offer services to assist with insurance agents contracting and commission payments, facilitate the flow of information between insurer and agent, and provide training to, and compliance oversight of, insurance agents. ( agent général de gestion )

A person who acts, under a mandate or agreement, for another person or entity. ( mandataire )

When a person or entity uses promotional materials such as advertisements, graphics for websites or billboards, etc., with the intent to promote money services business (MSB) services and to acquire business from persons or entities in Canada. ( marketing ou publicité )

In relation to sections 24.1 to 39, the Minister of Public Safety and Emergency Preparedness and, in relation to any other provision of this Act, the Minister of Finance. ( ministre )

An offence under subsection 462.31(1) of the Criminal Code . The United Nations defines money laundering as "any act or attempted act to disguise the source of money or assets derived from criminal activity." Essentially, money laundering is the process whereby "dirty money"—produced through criminal activity—is transformed into "clean money," the criminal origin of which is difficult to trace. ( infraction de recyclage des produits de la criminalité )

Potential red flags that could initiate suspicion or indicate that something may be unusual in the absence of a reasonable explanation. [Indicateurs de blanchiment d'argent (BA) et de financement du terrorisme (FT) (indicateurs de BA/FT)]

A person or entity that has a place of business in Canada and that is engaged in the business of providing at least one of the following services:

Reference: PCMLTFA, S.C. 2000, c 17, s. 5(h), PCMLTFRR, SOR/2007-121, s. 1 and PCMLTFR, SOR/2002-184, s. 1(2).

An individual or entity authorized to deliver services on behalf of a money services business (MSB). It is not an MSB branch. ( mandataire d'une entreprise de services monétaires )

An entity's type or field of business. Also applies to an individual in the case of a sole proprietorship. ( nature de l'entreprise principale )

Changes to the structure or operations of a business when new services, activities, or locations are put in place. For example, changes to a business model or business restructuring. ( nouveaux développements )

The adoption of a technology that is new to a business. For example, when a business adopts new systems or software such as transaction monitoring systems or client onboarding and identification tools. ( nouvelles technologies )

There is no clear explanation to account for suspicious behaviour or information. ( sans raison apparente )

The job or profession of an individual. ( profession ou métier )

An individual. ( personne )

In respect of an account, means a person who is authorized to instruct on the account or make changes to the account, such as modifying the account type, updating the account contact details, and in the case of a credit card account, requesting a limit increase or decrease, or adding or removing card holders. A person who is only able to conduct transactions on the account is not considered a person authorized to give instructions. ( personne habilitée à donner des instructions )

A person who, at a given time, holds—or has held within a prescribed period before that time—one of the offices or positions referred to in any of paragraphs (a) and (c) to (j) in or on behalf of the federal government or a provincial government or any of the offices or positions referred to in paragraphs (b) and (k):

• (a) Governor General, lieutenant governor or head of government;
• (b) member of the Senate or House of Commons or member of a legislature of a province;
• (c) deputy minister or equivalent rank;
• (d) ambassador, or attaché or counsellor of an ambassador;
• (e) military officer with a rank of general or above;
• (f) president of a corporation that is wholly owned directly by His Majesty in right of Canada or a province;
• (g) head of a government agency;
• (h) judge of an appellate court in a province, the Federal Court of Appeal or the Supreme Court of Canada;
• (i) leader or president of a political party represented in a legislature;
• (j) holder of any prescribed office or position; or
• (k) mayor, reeve or other similar chief officer of a municipal or local government.

A person who holds or has held one of the following offices or positions in or on behalf of a foreign state:

• (a) head of state or head of government;
• (b) member of the executive council of government or member of a legislature;
• (f) president of a state-owned company or a state-owned bank;
• (h) judge of a supreme court, constitutional court or other court of last resort;
• (i) leader or president of a political party represented in a legislature; or
• (j) holder of any prescribed office or position.

In regards to completing a suspicious transaction report (STR), the likelihood that a transaction may be related to a money laundering/terrorist financing (ML/TF) offence. For example, based on your assessment of facts, context and ML/TF indicators you have reasonable grounds to suspect that a transaction is related to the commission or attempted commission of an ML/TF offence. ( possibilité )

Gold, silver, palladium or platinum in the form of coins, bars, ingots or granules or in any other similar form. ( métal précieux )

Diamonds, sapphires, emeralds, tanzanite, rubies or alexandrite. ( pierre précieuse )

A product that is issued by a financial entity and that enables a person or entity to engage in a transaction by giving them electronic access to funds or virtual currency paid to a prepaid payment product account held with the financial entity in advance of the transaction. It excludes a product that:

• (a) enables a person or entity to access a credit or debit account or one that is issued for use only with particular merchants; or
• (b) is issued for single use for the purposes of a retail rebate program.

An account – other than an account to which only a public body or, if doing so for the purposes of humanitarian aid, a registered charity as defined in subsection 248(1) of the Income Tax Act, can add funds or virtual currency – that is connected to a prepaid payment product and that permits:

• (a) funds or virtual currency that total $1,000 or more to be added to the account within a 24-hour period; or
• (b) a balance of funds or virtual currency of $1,000 or more to be maintained.

Prescribed by regulations made by the Governor in Council. ( Version anglaise seulement )

The likelihood in regards to completing a suspicious transaction report (STR) that a financial transaction is related to a money laundering/terrorist financing (ML/TF) offence. For example, based on facts, having reasonable grounds to believe that a transaction is probably related to the commission or attempted commission of an ML/TF offence. ( probabilité )

A judicial order that compels a person or entity to disclose records to peace officers or public officers. ( ordonnance de communication )

• (a) a department or an agent of His Majesty in right of Canada or an agent or mandatary of His Majesty in right of a province;
• (b) an incorporated city or town, village, metropolitan authority, township, district, county, rural municipality or other incorporated municipal body in Canada or an agent or mandatary in Canada of any of them; and
• (c) an organization that operates a public hospital and that is designated by the Minister of National Revenue as a hospital authority under the Excise Tax Act , or an agent or mandatary of such an organization.

A person or entity that is authorized under provincial legislation to act as an agent or mandatary for purchasers or vendors in respect of the purchase or sale of real property or immovables. ( courtier ou agent immobilier )

A person or entity that, in any calendar year after 2007, has sold to the public, other than in the capacity of a real estate broker or sales representative:

• (a) five or more new houses or condominium units;
• (b) one or more new commercial or industrial buildings; or
• (c) one or more new multi-unit residential buildings each of which contains five or more residential units, or two or more new multi-unit residential buildings that together contain five or more residential units.

Steps taken to achieve a desired outcome, even if they do not result in the desired outcome. For example, this can include doing one or more of the following:

• asking the client,
• conducting open source searches,
• retrieving information already available, including information held in non-digital formats, or
• consulting commercially available information.

A record that indicates the receipt of an amount of funds and that contains the following information:

• (b) if the amount is received from a person, their name, address and date of birth and the nature of their principal business or their occupation;
• (c) if the amount is received from or on behalf of an entity, the entity's name and address and the nature of their principal business;
• (d) the amount of the funds received and of any part of the funds that is received in cash;
• (e) the method by which the amount is received;
• (f) the type and amount of each fiat currency involved in the receipt;
• (g) if applicable, the exchange rates used and their source;
• (h) the number of every account that is affected by the transaction in which the receipt occurs, the type of account and the name of each account holder;
• (i) the name and address of every other person or entity that is involved in the transaction, the nature of their principal business or their occupation and, in the case of a person, their date of birth;
• (j) every reference number that is connected to the transaction and has a function equivalent to that of an account number; and
• (k) the purpose of the transaction.

Has the same meaning as in subsection 248(1) of the Income Tax Act . ( régime de pension agréé )

Has the same meaning as in subsection 248(1) of the Income Tax Act . ( fonds enregistré de revenu de retraite )

In respect of information that is used to verify identity, means that the source is well known, reputable, and is considered one that you trust to verify the identity of the client. ( fiable )

An individual in Canada that has been appointed by a person or entity that is a foreign money services business (FMSB), pursuant to the PCMLTFA, to receive notices and documents on behalf of the FMSB. ( représentant du service )

The review and documentation of potential money laundering/terrorist financing risks in order to help a business establish policies, procedures and controls to detect and mitigate these risks and their impact. ( évaluation des risques )

A person or entity that is referred to in paragraph 5(g) of the Act. ( courtier en valeurs mobilières )

In respect of an entity, means:

• (a) a director of the entity who is one of its full-time employees;
• (b) the entity's chief executive officer, chief operating officer, president, secretary, treasurer, controller, chief financial officer, chief accountant, chief auditor or chief actuary, or any person who performs any of those functions; or
• (c) any other officer who reports directly to the entity's board of directors, chief executive officer or chief operating officer. 

An agreement between a money services business (MSB) and an organization according to which the MSB will provide any of the following MSB services on an ongoing basis:

• money transfers;
• foreign currency exchange;
• issuing or redeeming money orders, traveller's cheques or anything similar; or
• dealing in virtual currencies.

A settlor is an individual or entity that creates a trust with a written trust declaration. The settlor ensures that legal responsibility for the trust is given to a trustee and that the trustee is provided with a trust instrument document that explains how the trust is to be used for the beneficiaries. A settlor includes any individual or entity that contributes financially to that trust, either directly or indirectly. ( constituant )

A foreign financial institution that:

• (i) is located at a fixed address—where it employs one or more persons on a full-time basis and maintains operating records related to its banking activities—in a country in which it is authorized to conduct banking activities; and
• (ii) is subject to inspection by the regulatory authority that licensed it to conduct banking activities; and
• (b) is not controlled by, or under common control with, a depository institution, credit union or foreign financial institution that maintains a place of business referred to in paragraph (a) in Canada or in a foreign country.

Reference: PCMLTFR, SOR/2002-184, s. 1(1).

Includes an electronic signature or other information in electronic form that is created or adopted by a client of a person or entity referred to in section 5 of the Act and that is accepted by the person or entity as being unique to that client. ( signature )

In respect of an account, means a document that is signed by a person who is authorized to give instructions in respect of the account, or electronic data that constitutes the signature of such a person. ( fiche-signature )

The issuer or provider of information or documents for verifying identification. ( source )

The origin of the particular funds or VC used to carry out a specific transaction or to attempt to carry out a transaction. It is how the funds were acquired, not where the funds may have been transferred from. For example, the source of funds could originate from activities or occurrences such as employment income, gifts, the sale of a large asset, criminal activity, etc. ( origine des fonds ou de la monnaie virtuelle (MV) )

The origin of a person's total assets that can be reasonably explained, rather than what might be expected. For example, a person's wealth could originate from an accumulation of activities and occurrences such as business undertakings, family estates, previous and current employment income, investments, real estate, inheritance, lottery winnings, etc. ( origine de la richesse )

With respect to a reportable transaction, information related to the instructions provided by the person or entity making the request to the reporting entity to start a transaction. For example, an individual arrives at a bank and requests to purchase a bank draft. The starting action is the details of the instructions for the purchase which includes the funds or virtual currency that the requesting person or entity brought to the reporting entity. A transaction must have at least one starting action. ( action d’amorce )

The Society for Worldwide Interbank Financial Telecommunication. ( SWIFT )

Has the same meaning as in subsection 83.01(1) of the Criminal Code . ( activité terroriste )

An offence under section 83.02, 83.03 or 83.04 of the Criminal Code or an offence under section 83.12 of the Criminal Code arising out of a contravention of section 83.08 of that Act. 

A terrorist financing offence is knowingly collecting or giving property (such as money) to carry out terrorist activities. This includes the use and possession of any property to help carry out the terrorist activities. The money earned for terrorist financing can be from legal sources, such as personal donations and profits from a business or charitable organization or from criminal sources, such as the drug trade, the smuggling of weapons and other goods, fraud, kidnapping and extortion. ( infraction de financement des activités terroristes )

Any individual or entity that instructs another individual or entity to act on their behalf for a financial activity or transaction. ( tiers )

Has the same meaning as in section 2 of the Canadian Security Intelligence Service Act . ( menaces envers la sécurité du Canada )

A written and implemented program outlining the ongoing training for your employees, agents or other individuals authorized to act on your behalf. It should contain information about all your obligations and requirements to be fulfilled under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its associated Regulations. ( programme de formation )

A right of property held by one individual or entity (a trustee) for the benefit of another individual or entity (a beneficiary). ( fiducie )

A company that is referred to in any of paragraphs 5(d) to (e.1) of the Act. ( société de fiducie )

A trustee is the individual or entity authorized to hold or administer the assets of a trust. ( fiduciaire )

In the context of civil law, a person who has been lawfully appointed to the care of the person and property of a minor. ( tuteur )

A review, conducted every two years (at a minimum), by an internal or external auditor to test the effectiveness of your policies and procedures, risk assessment, and training program. ( examen bisannuel de l'efficacité )

In respect of a document or information that is used to verify identity, appears legitimate or authentic and does not appear to have been altered or had any information redacted. The information must also be valid according to the issuer, for example if a passport is invalid because of a name change, it is not valid for FINTRAC purposes. ( valide )

To refer to certain information or documentation, in accordance with the prescribed methods, to identify a person or entity (client). ( vérifier l'identité )

A corporation or trust that has minimum net assets of $75 million CAD on its last audited balance sheet. The corporation's shares or units have to be traded on a Canadian stock exchange or on a stock exchange designated under subsection 262(1) of the Income Tax Act. The corporation or trust also has to operate in a country that is a member of the Financial Action Task Force (FATF). ( personne morale ou fiducie dont l'actif est très important )

A contravention of the Act or the regulations that is designated as a violation by regulations made under subsection 73.1(1). ( violation )

• (a) a digital representation of value that can be used for payment or investment purposes that is not a fiat currency and that can be readily exchanged for funds or for another virtual currency that can be readily exchanged for funds; or
• (b) a private key of a cryptographic system that enables a person or entity to have access to a digital representation of value referred to in paragraph (a).

An exchange, at the request of another person or entity, of virtual currency for funds, funds for virtual currency or one virtual currency for another. ( opération de change en monnaie virtuelle )

A record respecting a virtual currency exchange transaction—including an entry in a transaction register—that sets out:

• (b) in the case of a transaction of $1,000 or more, the name and address of the person or entity that requests the exchange, the nature of their principal business or their occupation and, in the case of a person, their date of birth;
• (c) the type and amount of each type of funds and each of the virtual currencies involved in the payment made and received by the person or entity that requests the exchange;
• (f) the number of every account that is affected by the transaction, the type of account and the name of each account holder;
• (g) every reference number that is connected to the transaction and has a function equivalent to that of an account number; and
• (h) every transaction identifier, including the sending and receiving addresses.

In respect of an electronic funds transfer (EFT) report or a large virtual currency transaction report, a working day is a day between and including Monday to Friday. It excludes Saturday, Sunday, and a public holiday. ( jour ouvrable )

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Compensatory Time Off for Travel

Fact sheet: compensatory time off for travel, description.

Compensatory time off for travel is earned by an employee for time spent in a travel status away from the employee's official duty station when such time is not otherwise compensable.

Employee Coverage

Compensatory time off for travel may be earned by an "employee" as defined in 5 U.S.C. 5541(2) who is employed in an "Executive agency" as defined in 5 U.S.C. 105, without regard to whether the employee is exempt from or covered by the overtime pay provisions of the Fair Labor Standards Act of 1938, as amended. For example, this includes employees in senior-level (SL) and scientific or professional (ST) positions, but not members of the Senior Executive Service or Senior Foreign Service or Foreign Service officers. Effective April 27, 2008, prevailing rate (wage) employees are covered under the compensatory time off for travel provision. See CPM 2008-04 .)

"Compensable"

Compensatory time off for travel may only be earned for time in a travel status when such time is not otherwise "compensable." Compensable refers to periods of time creditable as hours of work for the purpose of determining a specific pay entitlement. For example, certain travel time may be creditable as hours of work under the overtime pay provisions in 5 CFR 550.112(g) or 551.422. (See fact sheet on hours of work for travel .)

Creditable Travel

To be creditable under this provision, travel must be officially authorized. In other words, travel must be for work purposes and must be approved by an authorized agency official or otherwise authorized under established agency policies.

For the purpose of compensatory time off for travel, time in a travel status includes-

• Time spent traveling between the official duty station and a temporary duty station;
• Time spent traveling between two temporary duty stations; and
• The "usual waiting time" preceding or interrupting such travel (e.g., waiting at an airport or train station prior to departure). The employing agency has the sole and exclusive discretion to determine what is creditable as "usual waiting time." An "extended" waiting period-i.e., an unusually long wait during which the employee is free to rest, sleep, or otherwise use the time for his or her own purposes-is not considered time in a travel status.

Commuting Time

• Travel outside of regular working hours between an employee's home and a temporary duty station or transportation terminal outside the limits of his or her official duty station is considered creditable travel time. However, the agency must deduct the employee's normal home-to-work/work-to-home commuting time from the creditable travel time.
• Travel outside of regular working hours between a worksite and a transportation terminal is creditable travel time, and no commuting time offset applies.
• Travel outside of regular working hours to or from a transportation terminal within the limits of the employee's official duty station is considered equivalent to commuting time and is not creditable travel time.

Crediting and Use

Compensatory time off for travel is credited and used in increments of one-tenth of an hour (6 minutes) or one-quarter of an hour (15 minutes). Employees must comply with their agency's procedures for requesting credit within the time period required by the agency. Employees must also comply with their agency's policies and procedures for scheduling and using earned compensatory time off for travel.

Compensatory time off for travel is forfeited-

• If not used by the end of the 26th pay period after the pay period during which it was earned. (See Notes 1 and 2.)
• Upon voluntary transfer to another agency;
• Upon movement to a noncovered position; or
• Upon separation from the Federal Government. (See Note 1.)

Under no circumstances may an employee receive payment for unused compensatory time off for travel.

Note 1: See exceptions for uniformed service or an on-the-job injury with entitlement to injury compensation at 5 CFR 550.1407(a)(2) and Question 24 of the Questions and Answers on Compensatory Time Off for Travel (under References below).

Note 2: See exception due to an exigency of the service beyond the employee's control at 5 CFR 550.1407(e) and Question 25 of the Questions and Answers on Compensatory Time Off for Travel (under References below).

Limitations

Compensatory time off for travel may not be considered in applying the biweekly or annual premium pay caps or the aggregate limitation on pay. There is no limitation on the amount of compensatory time off for travel an employee may earn.

• 5 U.S.C. 5550b
• 5 CFR 550, subpart N
• Questions and Answers on Compensatory Time Off for Travel (see Attachment 1 to CPM 2005-03)
• Examples of creditable travel time (see Attachment 2 to CPM 2005-03)
• Hours of Work for Travel

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It Will Soon Be Easier to Get Flight Refunds, Thanks to This New DOT Rule

F light delays and cancellations are some of the most un-fun issues to deal with while traveling. Even more of a headache? Trying to get a refund from the airline for your airfare or for any extra fees you paid for, like checked baggage.

But now, in a big win for travelers, the Department of Transportation is making it easier than ever to get a full refund for canceled or significantly delayed flights. On Wednesday, the DOT announced new federal rules on how—and when—airlines must give customers their money back. The new rules apply to flights to, from, or within the United States on foreign or domestic carriers, making them some of the most consumer-friendly regulations the industry has seen to date.

“Passengers deserve to get their money back when an airline owes them—without headaches or haggling,” Secretary of Transportation Pete Buttigieg said in a release on Wednesday. “Our new rule sets a new standard to require airlines to promptly provide cash refunds to their passengers.”

The new rule will go into effect 60 days after its official publication in the Federal Registrar (as of the time of publication, the final rule has not yet been published). Airlines will then have a grace period of six months to one year (depending on the type of refund) to implement the new policies.

Here’s a breakdown of the new rules and how they will impact passengers:

Refunds for significant flight changes and cancellations

Under the new rules, passengers are entitled to automatic refunds for flights that are canceled, significantly delayed, or experience a “significant change” for any reason—including “uncontrollable” factors such as weather. This applies only if alternative transportation or travel vouchers aren't available or are rejected by the passenger. That’s the key condition. If an airline is able to book you on another flight—on the same day or even the next—and you accept it, then the new rules don’t apply. But if you refuse the rebooking, then you are entitled to the automatic refund.

Additionally, the new rule defines what the DOT considers a “significant change” for the first time. Adjustments to a flight itinerary that meet any of the following criteria will be considered significantly changed—and therefore, entitled to a full refund:

• Changes to departure or arrival times that are more than 3 hours domestically and 6 hours internationally
• Departures or arrivals from a different airport
• Increases in the number of connections
• Instances where passengers are downgraded to a lower class of service
• Connections at different airports or flights on different planes that are less accessible or accommodating to a person with a disability

This is a major change—and a big deal for passenger rights—because previously, the government left it up to the airlines to choose for themselves what they considered a long enough delay to warrant a refund. (Meaning, they weren’t given often.)

In another win for travelers, the DOT has spelled out how refunds must be issued. The refunds must be automatically issued “without passengers having to explicitly request them or jump through hoops.” They must also be prompt, given within seven business days for credit card purchases and 20 calendar days for other methods of payment. The refunds must equal the full amount a customer paid, including taxes and fees, minus any used portion of the ticket.

Refunds for late luggage

But it’s not just flight disruptions that are eligible for refunds under the new rules. It applies to baggage delays, too. Fliers who file a mishandled baggage report with the airline and whose delayed luggage isn’t delivered to them within 12 hours of their domestic flight or 15 to 30 hours of their international flight (depending on the flight’s length) can receive a full refund of their baggage fee. And those fees can add up—as travelers are well aware—especially in light of this year's widespread checked bag fee increases.

Refunds for in-flight services

Passengers are also now entitled to automatic refunds for in-flight services they paid for but the airline failed to provide. These charges include services like seat selection , in-flight WiFi , and in-flight entertainment purchases. If you pay for one of these add-ons and it’s not provided (for example, if the WiFi doesn’t work, or you don't get the seat you paid for) you will be refunded for those services.

Refunds for when you're sick

The new regulations also lay out a framework for travelers to be protected if they can’t travel due to “a serious communicable disease” such as COVID-19. If a country or medical professional advises passengers not to travel to, from, or within the US for this reason, airline customers will be entitled to a travel voucher or airline credit that’s valid for at least five years. Unlike the above refund scenarios, airlines may require passengers to submit additional documentation in order to receive this compensation.

These protections are designed to prevent issues that arose during the pandemic from repeating themselves. In 2020, many passengers whose flights were canceled due to travel restrictions struggled to get a cash refund from their airline. Airlines were later collectively fined $7.5 million by the DOT for delaying the refunds and forced to issue $600 million back to customers.

What else to know

Overall, the new rule is meant to streamline the refund process for all of these services and flight disruptions. “Without this rule, consumers have to navigate a patchwork of cumbersome processes to request and receive a refund—searching through airline websites to figure out how [to] make the request, filling out extra ‘digital paperwork,’ or at times waiting for hours on the phone,” the DOT’s statement says.

On top of this, airlines must now issue notifications to fliers who are affected by delays and cancellations that state their right to a refund of their ticket price and extra service fees.

If travelers believe their airline is not following the new refund rules, they can always file a consumer complaint with the DOT . These complaints helped fuel the record amount of passenger refunds during the COVID pandemic, as well as the $164 million in penalties that Buttigieg has charged against airlines for consumer violations during his tenure. So rest assured that the agency does read them and act on them.

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Airlines are ordered to give full refunds instead of vouchers and to stop hiding fees

Travelers and their luggage in a terminal at Los Angeles International Airport in August 2023. Mario Tama/Getty Images hide caption

Travelers and their luggage in a terminal at Los Angeles International Airport in August 2023.

WASHINGTON — In an effort to crack down on airlines that charge passengers steep fees to check bags and change flights, the U.S. Department of Transportation has announced new regulations aimed at expanding consumer protections .

One of the final rules announced Wednesday requires airlines to show the full price of travel before passengers pay for their tickets. The other will force airlines to provide prompt cash refunds when flights are canceled or significantly changed.

"Passengers deserve to know upfront what costs they are facing and should get their money back when an airline owes them - without having to ask," said Transportation Secretary Pete Buttigieg in a statement announcing the new rules.

Taking on junk fees is popular. But can it win Biden more voters?

Surprise junk fees have become a large and growing source of revenue for airlines in recent years, according to the DOT.

"Today's announcements will require airlines to both provide passengers better information about costs before ticket purchase, and promptly provide cash refunds to passengers when they are owed — not only saving passengers time and money, but also preventing headaches," Buttigieg said.

The airline industry is unlikely to welcome the new rules. At a hearing on the proposed fee rule in March 2023, an industry lobbying group representing American, Delta and United said it would be too difficult for airlines to disclose their charges more clearly.

"The amount of unwanted and unneeded information forced upon passengers" by the new policy would only cause "confusion and frustration," warned Doug Mullen, the deputy general counsel at Airlines for America . "Very few, if any, need or want this information, and especially when they are initially trying to understand schedule and fare options."

But the DOT insists its new rule will give consumers the information they need to better understand the true costs of air travel.

Transportation Department cracks down on airline 'junk fees'

"I believe this is to the benefit of the sector as a whole," Buttigieg said in an interview with NPR's Morning Edition , because passengers will have "more confidence in the aviation sector."

The new rules require airlines to disclose all baggage, change, and cancellation fees, and to share that information with third-party booking sites and travel agents.

The regulation also prohibits bait-and-switch tactics, the DOT says, that disguise the true cost of flights by advertising a low base fare that does not include all mandatory fees.

"This is really about making sure that we create a better experience for passengers, and a stronger aviation sector in the United States," Buttigieg said in the NPR interview.

FinCEN Advisory

This Advisory provides answers to some of the most frequently asked questions concerning the transmittal of funds "Travel" regulation.

A Bank Secrecy Act (BSA) rule [31 CFR 103.33(g)]—often called the“Travel” rule—requires all financial institutions to pass on certain informationto the next financial institution, in certain funds transmittals involving morethan one financial institution. This rule became effective May 28, 1996 and was issued by the TreasuryDepartment’s Financial Crimes Enforcement Network (FinCEN). This rulewas issued by FinCEN concurrently with the new BSA recordkeeping rules[31 CRF 103.33(e) and (f)) for funds transfers and transmittals of funds]. The funds transfer rules are designed to help law enforcement agenciesdetect, investigate and prosecute money laundering and other financial crimesby preserving an information trail about persons sending and receiving fundsthrough funds transfer systems. The attached guidance is intended to answer general, basic questionsconcerning the implementation of the new regulations. It is not meant to becomprehensive and does not replace or supersede the regulations. Thesequestions and answers and the Travel rule should be examined in concert withthe Treasury’s related recordkeeping rule concerning the transmittal of funds. For additional information concerning funds transfers, please refer toFinCEN Advisory Issue 3 entitled “Funds Transfers: Questions & Answers.”This advisory, as well as other information relating to FinCEN programs andTreasury’s counter-money laundering efforts, may be viewed by visiting FinCEN’s website at: https://www.fincen.gov or by accessing the BSA Bulletin Board via computer modem at(313) 234-1453. Stanley E. Morris Director Attachment:

GUIDANCE FOR FINANCIAL INSTITUTIONS ON THE TRANSMITTAL OF FUNDS "TRAVEL" REGULATIONS

The Treasury Department's Financial Crimes Enforcement Network (FinCEN) offers the followingguidance to financial institutions on the transmittal of funds "Travel" rule. This guidance is intended to answer general, basic questions concerning the implementation of the new regulations. It is not meant to be comprehensive and does not replace or supersede the regulations. These questions and answers and the Travel rule should be examined in concert with the Treasury's related recordkeeping rule concerning the transmittal of funds. 1. Are all transmittals of funds subject to this rule? No. Only transmittals of funds equal to or greater than $3,000 (or its foreign equivalent) are subject to this rule, regardless of whether or not currency is involved. In addition, transmittals of funds governed by the Electronic Funds Transfer Act (Reg E) or made through ATM, or point of sale systems are not subject to this rule. 2. What are the "Travel" rule's requirements? All transmittor's financial institutions must include and send the following in the transmittal order: The name of the transmittor, The account number of the transmittor, if used, The address of the transmittor, The identity of the transmittor's financial institution, The amount of the transmittal order, The execution date of the transmittal order, and The identity of the recipient's financial institution; and, if received: The name of the recipient, The address of the recipient, The account number of the recipient, and Any other specific identifier of the recipient. An intermediary financial institution must pass on all of the information it receives from a transmittor's financial institution or the preceding intermediary financial institution, but has no general duty to retrieve information not provided by the transmittor's financial institution or the preceding intermediary financial institution. Exceptions are noted below. However, if the system used to effect the transmittal of funds is not currently designed to enable these requirements to be met, the name, address, account of the transmittor and the identity of the transmittor's financial institution need not be passed on until such time as the bank that sends the order (to the Federal Reserve Bank or otherwise) completes its conversion to the expanded Fedwire message format. Moreover, if any lawful order is received at, or if a request from another financial institution is made to a recipient's financial institution, all financial institutions must go back to the transmittor's financial institution, or any other preceding financial institution, if the transmittor's financial institution is unknown, and retrieve information not included in the transmittal of funds due to system limitations. 3. Are there any exceptions to these requirements? Yes. If the transmittor and the recipient are the same person, and the transmittor's financial institution and the recipient's financial institution are the same domestic bank or domestic securities broker, the transaction is excepted from the requirement contained in these new rules. In addition, if both the transmittor and the recipient, that is, as defined, the beneficial recipient, are any of the following, then the transmittal of funds is not subject to these rules: Domestic bank; Wholly owned domestic subsidiary of a domestic bank; Domestic broker or dealer in securities; Wholly owned domestic subsidiary of a domestic broker or dealer in securities; The United States; Federal agency or instrumentality; State or local government; or State or local agency or instrumentality. 4. Does this rule require any reporting to the government of any information? No. However, if a transmittal of funds seems to the financial institution to be suspicious, then aSuspicious Activity Report is required, if the financial institution is subject to the Bank Secrecy Act's suspicious activity reporting requirement. 5. How long does a financial institution have to keep records required by these new rules? Five (5) years. 6. What is the benefit of this rule to the public? Law enforcement authorities have identified instances to the Treasury in which records maintained byfinancial institutions were incomplete or insufficient and thereby hampered criminal investigations. In addition, in certain criminal investigations, financial institutions were unable, on a timely basis, to provide law enforcement authorities with useful financial records of transmittals of funds. This rule was created to ensure that in criminal investigations, as well as tax or regulatory proceedings, sufficient information would be available to quickly enable authorities to determine the source of the transmittal of funds and its recipient. Finally, it is anticipated that this rule will more easily permit law enforcement authorities to determine the parties to a transaction. 7. What is a financial institution for the purposes of this rule? The term "financial institution" includes: banks; securities brokers or dealers; casinos subject to the Bank Secrecy Act; money transmitters, check cashers, currency exchangers, and money order issuersand sellers subject to the Bank Secrecy Act. Please see 31 CFR 103.11 for more information. 8. Does this rule treat banks and non-bank financial institutions differently? No. Banks and non-bank financial institutions are treated identically under the Travel rule. 9. What are some of the implications of the Travel rule for financial institutions subject to this rule? The most important implication is that financial institutions must be aware that if a transmittal of funds involves both bank and non-bank financial institutions, each financial institution must carefully analyze and understand all of the definitions that apply to its role in the transmittal of funds. This is important because the rule's requirements on financial institutions differ, depending on what role a financial institution plays in a transmittal of funds. For example , in a situation in which the customer of a securities broker initiates a transmittal of funds that is sent through a bank, that bank is an intermediary financial institution for the purposes of the Travel rule. The next important implication is that financial institutions must carefully understand the role of the succeeding financial institution in the chain of each transmittal of funds, particularly where a transmittal of funds moves from a bank to a non-bank, or vice versa. This is important because the Travel rule's requirement to pass information to the next financial institution in the chain implicitly requires financial institutions that carry out transmittals of funds to coordinate the transfer of information required by this new rule. Finally, as the range of services offered by financial institutions expands, financial institutions must recognize that a single transmittal may involve two or more funds transfer systems. In such cases, it is important that financial institutions understand their roles in such a complex transmittal of funds, because their duties under this rule arise from their role(s) in the transmittal of funds. 10. What is the relationship between the terms used in this rule and those used within Article 4A of the Uniform Commercial Code (UCC)? This rule uses terms that are intended to parallel those used in UCC Article 4A, but that are applicable to all financial institutions, as defined within the Bank Secrecy Act's implementing regulations.

Terms for all financial institutions:

UCC 4A terms:

Transmittal of funds

Funds transfer

Transmittal order

Payment order

Transmittor

Transmittor's financial institution

Originator's Bank

Intermediary financial institution

Intermediary bank

Recipient's financial institution

Beneficiary's bank

Beneficiary

Receiving financial institution

Receiving bank

11. Do the terms created in this regulation apply to transmittals of funds to or from anywhere in the world? Yes. However, the requirements of the Bank Secrecy Act apply only to activities of financial institutions within the United States. Thus, for example, part, but not all, of an international transmittal of funds can be subject to the Travel rule. 12. Is this rule limited to wire transfers? No. The term transmittal of funds includes other transactions and transfers in addition to wire transfers or electronic transfers. 13. What are examples of transmittals of funds that are not wire transfers? Financial institutions sometimes carry out transmittals of funds using correspondent accounts or journal entry transfers such as "due from" and "due to" accounts. In such cases, covered transmittals of funds have occurred even though no wire transfer has occurred. In addition, a check can be the transmittal order within a transmittal of funds. This limited case occurs when Customer 1 goes into Financial Institution A and orders a transmittal of funds be sent to Customer 2 at Financial Institution B. Financial Institution A, perhaps because it is a small financial institution or because the transaction involves a function (such as a trust) that is segregated from the rest of the financial institution, sends a check, payable to Financial Institution B, directly to Financial Institution B, and does not send the check directly to Customer 1 or to Customer 2. This check must be Financial Institution A's own check (however, it need not be drawn on Financial Institution A), and not the check of the customer. This check contains accompanying instructions to have Financial Institution B subsequently credit Customer 2's account. In such a case, the check and its instructions are the transmittal order effecting a transmittal of funds. 14. How should aggregated transmittals of funds be treated? This is a situation where a financial institution aggregates many separate requests for transmittals of funds into one combined transmittal of funds. Whenever a financial institution aggregates separate transmittors from separate transmittals of funds, the transmittor's financial institution itself becomes the transmittor, for the purpose of the Travel rule. Conversely, any time a financial institution combines separate recipients from separate transmittals of funds, the recipient's financial institution itself becomes the recipient, for the purpose of the Travel rule. For example, if a money transmitter has five (5) customers who wish to have funds disbursed to fiveseparate recipients at a separate money transmitter, and the money transmitter uses a bank to carry out the movement of funds, the bank might aggregate the five (5) separate customers. In such an instance and for the purposes of the Travel rule, the bank may list as the transmittor for the transmittors' money transmitter, and the recipient as the recipients' money transmitter. However, the transmittors' money transmitter itself is independently obligated to make travel the required information to the recipients' money transmitter. Thus, the information is still required to travel in an aggregated transmittal of funds, although not necessarily in the same manner or by the same parties as in a nonaggregated transmittal of funds. 15. How should joint party transmittals of funds be treated? For example, Ms. A and Ms. B, sisters with different names and addresses, jointly act as the transmittor or as the recipient. In such cases, it may be impossible to transfer all the information required under the Travel rule. In this instance, the Treasury suggests the following: When a transmittal of funds is initiated by more than one transmittor, or sent to more than one recipient, the transmittor's financial institution may select one transmittor, or one recipient, as the person whose information must be passed under the ÒTravelÓ rule. In all cases involving a transmittal of funds from a joint account, the account holder that ordered the transmittal of funds should be identified as the transmittor on the transmittal order. Please note that for the Joint Rule [31 CFR 103.33(e) and (f)], records must still be kept on all parties. 16. How should a financial institution treat a customer who uses a code name or a pseudonym, or a customer who has requested that the financial institution hold his/her mail? In all such cases, the financial institution must use the customer's true name, and the customer'saddress. The use of a code name, or pseudonym is prohibited. Similarly, a financial institution mustnot use the financial institution's own address, except where that is the actual address of record of the person. 17. To whom can a financial institution go should it have further questions? Any financial institution may contact its primary Bank Secrecy Act examination authority, or theTreasury Department's Financial Crimes Enforcement Network can be contacted regarding questions onthe Bank Secrecy Act rules at (800) 949-2732 or (703) 905-3920.

FinCEN Advisory is a product of the Financial Crimes Enforcement Network, Department of the Treasury, Post Office Box 39, Vienna, Virginia 22183. For more information about FinCEN’s programs, visit the FinCEN web site at https://www.fincen.gov. General questions or comments regarding FinCEN publications should be addressed to the Office of Communications, FinCEN, (703) 905-3773. Information may also be faxed to (703) 905-3885.

New Biden administration rules require airlines to refund changed flights and abolish surprise fees

Airlines will now have to provide automatic refunds to travelers if flights are canceled or significantly altered under new US Department of Transportation rules, a significant change for consumers that could drive up costs across the industry.

The final regulations released Wednesday outline the circumstances where passengers are entitled to refunds for all travel to, from and within the US. The goal is to make it easier for people to get money back and to make refund policies more consistent from one airline to the next. 

According to the department, complaints related to airlines and ticket agents rejecting or delaying refunds made up 87% of all air-travel service complaints at the height of the Covid-19 pandemic in 2020.

“Passengers deserve to get their money back when an airline owes them — without headaches or haggling,” Transportation Secretary Pete Buttigieg said in a statement.

Under the new rule, passengers will be entitled to refunds if there is a “significant change” to their flights. These include:

• Departure or arrival time that moves by more than three hours domestically or six hours for international flights
• Being downgraded to a lower class than originally purchased, as from first class to economy
• Change of departure or arrival airport
• Increase in number of connections
• Changes to connecting airports or planes flown if they are less accommodating for people with disabilities

Travelers will also get refunds for checked bag fees if the bag is lost and not delivered within 12 hours of a domestic flight’s gate arrival. International flights will have from 15 to 30 hours to return a lost bag, depending on their length. 

Anyone who pays for a service, such as in-flight Wi-Fi or entertainment, and doesn’t receive it will also get their money back.

In addition, DOT made changes to make it easier for the passengers to receive the money they’re owed by requiring prompt automatic refunds in cash or through the original form of payment. Buttigieg said during a news conference at Ronald Reagan Washington National Airport Wednesday that the bulk of the new requirements will go into effect in about six months.

The refund changes are poised to add significant costs across the airline industry, which could have a disproportionate impact on low-cost carriers, according to Seaport Research analyst Daniel McKenzie. “To the extent low cost carriers have to add costs to comply, reduce growth and/or downsize, they become less competitive,” McKenzie said in a note.

The Airlines for America trade group said in a statement that its member carriers already abide by and often exceed regulation on consumer protection. 

“US airlines are providing more options and better services while ticket prices, including ancillary revenues, are at historic lows,” the group said in a release.

Also on Wednesday, the department released a final rule requiring airlines to clearly communicate their extra fees upfront for checked luggage, carry-on bags or for canceling or changing reservations. According to DOT, airlines saw a 30% increase in revenue from baggage fees between 2018 and 2022. 

“Airlines should compete with one another to secure passengers’ business — not to see who can charge the most in surprise fees,” Buttigieg said in a separate statement, adding that the rule will save travelers more than half a billion dollars a year.  

Buttigieg told reporters at the news conference that more rules are on the way, including to expand rights for passengers who use wheelchairs and to allow parents to sit with their children on flights without being charged a fee. 

DOT will also continue to pursue more aggressive enforcement when airlines violate rules, he said, pointing to the department’s $140 million record fine against Southwest Airlines Co. for a meltdown in its operations that left more than 2 million passengers stranded in December 2022. 

“The level of toughness reflected in the Southwest enforcement is not an exception, but the new standard,” Buttigieg said. 

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