The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has now published updated guidance with a view toward clarifying how reporting entities can share information among themselves in the fight against money laundering and terrorist financing. The document speaks to a period in which financial crimes are increasing in complexity and interconnectedness, raising expectations among institutions to find workable ways to collaborate without running afoul of privacy and confidentiality obligations.
It was explained therein that the guidance does not create new legal duties, but rather, it clarifies how to use existing laws more effectively to support cooperation across the financial sector. One of the most effective tools that have been noted over time in the fight against illicit finance is information sharing. The reality is that most criminal networks do not operate through one organization but rather move their funds through several banks, payment providers, money services businesses, and virtual asset platforms. So, when each organization gets to see just one piece of the picture, such suspicious activities might appear harmless.
By enabling responsible and controlled information exchanges, reporting entities can link the dots in pattern detection for things that would have been otherwise unrecognizable.
FINTRAC makes it very clear that any data exchange should be handled in compliance with Canadian privacy legislation and the Proceeds of Crime (Money Lauundering) and Terrorist Finiancing Act. This guidance stipulates that organizations may exchange information on relevant particulars if it will assist in the identification or reporting of suspicious transactions, and always where that information is properly secured. The institutions are advised to put in place internal policies that will define what can be shared and with whom, under what conditions. This is to empower staff to act confidently in the knowledge that they are operating within the law.
Probably one of the lines along these documents states that “information sharing should be risk-based. Exchange of information concerning a Customer file or Transaction Record should be on a need-to-know basis, with recourse to sharing only in areas where grounds are reasonably suspicious of Money Laundering and Terrorist Financing.
In this way, this method can prevent unnecessary discourses; however, it will ensure meaningful information flowing to the areas where it is really important.
| Topic / Aspect | Explanation |
| Principle of proportionality | FINTRAC believes that proportionality will help achieve the right balance for maintaining public trust when information is shared between reporting entities. |
| Practical examples of collaboration | Banks may communicate with money services businesses when both entities are involved in processing the same payment chain. Securities dealers may interact with trust companies when they observe an unusual movement of assets. |
| Cooperation between competitors | Even competing organizations can collaborate through industry associations or formal partnerships established to protect the entire financial system from risks. |
| Conditions for effectiveness | Information sharing works best when supported by written agreements and strong cybersecurity procedures. |
| Importance of record-keeping | When information is exchanged, reporting entities should document the reason for sharing, the type of data involved, and the safeguards applied. |
| Audit trail | Proper records create an audit trail that can be reviewed by compliance teams and, if necessary, by regulators. |
| Value of good documentation | Quality documentation demonstrates that the organization acted responsibly and with a legitimate purpose. |
| Role of senior management | FINTRAC recommends that senior management lead the creation of a culture of collaboration across the organization. |
| Staff concerns | Front-line employees may hesitate to share information due to fear of making mistakes; training and clear leadership messages can reduce this concern. |
| Board involvement | The guidance suggests that information-sharing policies should be developed by the board of directors as part of long-term AML strategy, not only in reaction to incidents. |
| Role of technology | Secure messaging platforms, encrypted databases, and standardized data formats enable safe exchange of intelligence without exposing sensitive personal information. |
| Technical self-assessment | Organizations should assess their technical capacity before entering sharing arrangements, as poorly designed systems can create new risks. |
| Relationship with law enforcement | Information sharing between businesses does not replace mandatory reporting to FINTRAC; it should help prepare more accurate and complete reports. |
| Support for smaller entities | FINTRAC notes that even modest exchanges can be valuable, and small organizations can participate through industry groups or limited partnerships with trusted counterparts. |
By publishing this guidance, FINTRAC signals that Canada is moving toward a more cooperative model of financial crime prevention. Many other jurisdictions have already adopted similar approaches, and international bodies such as the Financial Action Task Force have encouraged greater private-to-private information sharing. The Canadian framework aims to balance this global trend with the country’s strong commitment to privacy and civil liberties.
The reporting entities have an immediate task of reviewing their existing compliance programs for the purpose of assessing areas where they may be improved. Such policies might have been formulated years ago and might not be in tandem with the evolving digital payment ecosystem or, in the absence of that, new expectations as outlined by FINTRAC. Revising the procedures, forging sharing agreements, and investing in staff training will require some effort, but in the long run, the gains include better detection of criminal activity and an enhanced relationship with regulators.
Finally, the guidelines recognize that no one institution can fight money laundering. The gaps existing among institutions, jurisdictions, and sectors are exploited by criminals. It is responsible for closing information sharing that will both close these gaps and strengthen a state’s entire financial ecosystem. A roadmap to this is the FINTRAC document that ensures the rights of customers, as well as the legal obligations of businesses.
Those are persons or entities involved in financial transactions, thus subject to Canada’s Anti-Money Laundering Program. This includes, but not limited to, any one of the reporting entities that have been named as banks, credit unions, securities dealers, life insurance companies, money services and casinos, real estate brokers and developers, accountants, and dealers in precious metals and stones. These people have to put in place some compliance programs and report transactions that have been prescribed to FINTRAC.
The major mandatory reports are large cash transaction reports, reports on electronic funds transfers, and suspicious transaction reports. Large cash transactions are defined as involving 10,000 Canadian dollars or more. Electronic funds transfers involve cross-border amounts above this threshold.
The Information Sharing Act of Canada is the Act that allows some institutions of the government of Canada to share information between them for purposes related to national security and public safety. In principle, it is not to AML, but gives a lot to the principles in how data would be shared responsibly. For example, in the case of customer information, financial services companies have to respect the Proceeds of Crime (Money Laundering) and Terrorist Financing act and federal privacy laws when trading the information.
It involves the process by which financial institutions and other reporting entities share information with each other to detect, avoid, and report on money-laundering cases and the financing of terrorism. It may also mean some kind of information about a customer’s identity, any unusual transactional pattern, or even collaboration in dealing with issues related to any particular suspected criminal network. The vision behind this is to consolidate a fuller view of risk while respecting legal and privacy boundaries.