Electronic Funds Transfer Reporting: Once is Not Enough


On January 9, 2014, the Government of Canada announced draft legislative proposals (Proposals) that would require financial institutions, money services businesses and casinos subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PC Act) to report to the Canada Revenue Agency (CRA) international electronic funds transfers (EFTs) of C$10,000 or more sent or received at the request of a client. The proposed new reporting obligations are aimed at combatting international tax evasion and are in addition to the reporting requirements under the PC Act.
If enacted into legislation, the Proposals will require these businesses and institutions which are already subject to the PC Act, to file with the Minister of National Revenue information returns in respect of international EFTs of C$10,000 or more, in addition to the EFT reports these regulated entities are already required to submit to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) under the authority of the PC Act.
While regulated entities are required to report EFTs to FINTRAC, the CRA’s ability to access these reports is limited by the information-sharing provisions of the PC Act.
The Proposals contemplate amendments to the Excise Tax Act, the Excise Act, 2001 and the Air Travellers Security Charge Act to enable the CRA to use reported international EFT information for the administration of all or certain parts of these Acts.
The requirement to file information reports in respect of international EFTs under the Proposals mirrors the EFT reporting obligations under the PC Act. However, we would expect that the CRA reporting for international EFTs will be required to be submitted through a new reporting platform, which may require additional operational changes and can result in additional expenses for these reporting entities.
The implementation of the Proposals will also require that new regulations be introduced setting out the details of the proposed legislative changes. No draft regulations have so far been released for public consultation. It is anticipated that the Proposals will become effective on January 1, 2015.
The closing date for comments is February 10, 2014. Comments on the proposals can be submitted to the Department of Finance at IEFT-TI@fin.gc.ca or to the address below. Regulated entities that are concerned with these additional and duplicative reporting requirements should consider providing comments.
Tax Policy Branch
Department of Finance
140 O’Connor Street
Ottawa, Ontario
K1A 0G5
For further information, please contact:
Dawn Jetten                416-863-2956
Vladimir Shatiryan       416-863-4154
Jacqueline Shinfield    416-863-3290
or any other member of our Financial Services Regulatory group.

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