Anti-Money Laundering (AML)

Test yourself

Two real CIRE-bank questions on this exact outcome. Click to reveal the answer and the rule citation.

1. 1

   Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, a financial entity that receives cash in a single transaction of $10,000 or more must file which type of report?

   Outcome 6.1 · click for answer

   A.A Suspicious Transaction Report (STR) with CIRO.

   B.A Large Cash Transaction Report (LCTR) with FINTRAC within a prescribed number of business days.Correct

   C.A Currency Transaction Report with the Canada Revenue Agency.

   D.An Unusual Transaction Report with the Office of the Superintendent of Financial Institutions.

   The PCMLTFA requires reporting entities to submit a Large Cash Transaction Report to FINTRAC when they receive cash of $10,000 or more in a single transaction, or two or more transactions totalling $10,000 or more within 24 consecutive hours that the entity knows or suspects are related. The report goes to FINTRAC, Canada's financial intelligence unit, not to CIRO, the CRA, or OSFI. This $10,000 threshold is a well-established and well-publicized compliance benchmark.

2. 2

   A compliance officer at a dealer member reviews a client's account and notices a series of deposits just below $10,000 made on consecutive days, followed by a wire transfer abroad to a jurisdiction with limited AML oversight. Which PCMLTFA concept best describes this pattern?

   Outcome 6.2 · click for answer

   A.A large cash transaction, because the aggregate of the deposits exceeds $10,000.

   B.Structuring, also known as smurfing, which is the deliberate fragmentation of transactions to avoid triggering mandatory reporting thresholds, and is itself a criminal offence under the PCMLTFA.Correct

   C.A legitimate use of multiple banking relationships that does not trigger any AML obligation.

   D.A politically exposed person transaction requiring enhanced due diligence only.

   Structuring refers to the deliberate practice of breaking up transactions that would otherwise meet or exceed reporting thresholds to avoid those reports. Under the PCMLTFA, structuring is itself a criminal offence, not merely a reporting trigger. The pattern described, sub-threshold deposits on consecutive days followed by international wire transfers, is a textbook indicator of structuring and layering in a classic money laundering typology. The compliance officer would be obligated to assess whether a Suspicious Transaction Report is warranted.

Related terms in Compliance

• Client Focused Reforms (CFR)

  The 2021 CSA reforms that rewrote suitability, KYC, and conflicts of interest.

• PCMLTFA

  Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

• FINTRAC

  Canada's federal anti-money-laundering and anti-terrorist-financing agency.

• OBSI (Ombudsman for Banking Services and Investments)

  Independent dispute-resolution body for client complaints escalated after the dealer's internal process.

• Large Cash Transaction Report (LCTR)

  Mandatory FINTRAC report for cash transactions of $10,000 CAD or more.

• Suspicious Transaction Report (STR)

  Mandatory FINTRAC report when reasonable grounds exist to suspect money laundering or terrorist financing.