FINTRAC Publishes Terrorist Activity Financing Indicators for Suspicious Transactions

On December 15, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) published an Operational Alert: Terrorist Activity Financing (the “Alert”). The Alert identifies terrorist activity financing indicators intended to support businesses that are subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) in identifying and reporting to FINTRAC suspicious transactions and terrorist property.

The reporting FINTRAC receives enables it to generate actionable financial intelligence for Canada’s law enforcement and national security agencies.

Background

To identify the terrorist activity financing indicators, FINTRAC analyzed a sample of reporting it received between January 2019 and October 2022 related to terrorist activity financing. FINTRAC observed that such activity was primarily focused on three areas:

1. domestic terrorism
2. financing international terrorist groups
3. Canadian extremist travelers

Detailed observations from FINTRAC’s analysis, as well as a list of indicators for each of the three areas of focus for terrorist activity financing, are included in the Alert.

Using the Indicators

FINTRAC advised that the terrorist activity financing indicators are to be considered by reporting entities, together with the facts and the context of a transaction, in determining what may be suspicious and what may be reasonable in a given scenario. FINTRAC requires reporting entities to reach reasonable grounds to suspect that a transaction, or attempted transaction, is related to terrorist activity financing before submitting a suspicious transaction report to FINTRAC.

For further information concerning the new indicators, please contact any member of our Financial Services Regulatory Group.

The author would like to thank Cathy Costa-Faria, Associate, for her assistance in writing this Update.