Canada’s anti-money laundering/counter-terrorism financing ("AML/CTF") legislation, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the “PCMLTFA”) and its associated regulations apply only to certain entities. In some cases, the PCMLTFA applies to an entity by virtue of the type of entity, for example, a financial institution such as a bank, a credit union, or an insurance company. In other cases, the PCMLTFA applies to an entity by virtue of the fact that the entity performs a certain type of activity. This is the case for “money services businesses” (“MSB”).
Determining whether an entity is an MSB can be challenging, especially in the case of Fintech entities. This paper aims to shed some clarity on the issue of determining whether an entity is an MSB, through a review and analysis of the Policy Interpretations and guidance FINTRAC has provided.