FINTRAC: Why it's Important and Tools at Your Disposal

Table of Contents

Overview

Required Forms

Individual Identification Record

Politically Exposed Person Record

FINTRAC Receipt of Funds

Corporate Identification Information Record FINTRAC

Tools & Resources

 

---

 

Overview

FINTRAC is the federal agency responsible for helping to detect, prevent, and deter money laundering and other financial crimes in the Canadian economy. It was established under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. This legislation is stringent and carries substantial penalties that may be imposed on both individual licensees and brokerages for non-compliance. It is therefore essential that you clearly understand your obligations under the Act.

As a real estate professional, your primary obligation is to verify the identity of every individual or entity involved in a transaction. You must also assign a risk rating to each client based on the information available to you. In addition to verifying identity, you are required to confirm the source of funds and, again, assign a corresponding risk rating. If the risk rating exceeds the expected threshold, you must report the transaction to FINTRAC as a suspicious transaction. This requirement applies to both individuals and corporations and is a central component of your responsibilities under the legislation.

---

 

Required Forms

Individual Identification Record

The Individual Identification Record (often referred to as the FINTRAC ID) is the most commonly used FINTRAC form. It must be completed for every individual client, whether they are a buyer or a seller.

For sellers, this form is typically completed when the listing contract is signed. For buyers, it is usually completed when a Contract of Purchase and Sale is prepared. However, this is often not practical in the buyer’s case. As a best practice, many agents complete this form during initial client onboarding at the first meeting, before showings begin. If you choose this approach, you may leave the property address section blank.

Completing the Individual Identification Record is relatively straightforward. You will record the client’s first and last name, obtain an acceptable piece of identification, and verify that it is valid and matches the client’s information. You must also confirm their occupation and assign a risk rating. The risk rating is based on several factors.

Potential risk indicators and red flags may include:

• Difficulty verifying the client’s identification
• The client operating a cash‑intensive business
• The source of funds or deposit being unclear, concealed, or otherwise not transparent
• The client not having met the agent in person
• Other unusual or suspicious circumstances

Additional red flags may include:

• Arrangements where the client appears to be paying part of the price “under the table” in cash
• The client attempting to complete the transaction unusually quickly
• The client defaulting on a contract and forfeiting a large deposit
• The client paying a substantial deposit in cash

Politically Exposed Person Record

The Politically Exposed Person Record (often called the PEP record) is a shorter, more focused form than the FINTRAC Individual Identification Record. Its purpose is to help you determine whether your client holds, or is closely connected to someone who holds, a prominent public or political position, which may increase the risk of money laundering or terrorist financing.

To complete the PEP record, you must take reasonable steps to determine whether the client is a politically exposed person, a head of an international organization, or a close associate or family member of such an individual. This typically involves searching the client’s name in reliable, publicly available sources (such as Google, news databases, or government and international organization websites) and documenting the results of your search.

In addition to online research, you should ask the client directly, in a clear and professional manner, whether they currently hold or previously held a political office or senior public role, or whether they are related to or closely associated with anyone who does. If the client answers “yes” or if your search reveals potential exposure, you must record the relevant details on the form, including the nature of the position or relationship and any additional risk factors that may be present.

The information gathered through the PEP record helps you assign an appropriate risk rating to the client and determine whether enhanced due diligence measures are required under FINTRAC guidelines.

FINTRAC Receipt of Funds

The FINTRAC Receipt of Funds form must be completed whenever a deposit related to a real estate deal is received through the brokerage trust account, whether your client is a buyer or seller. This covers deposits made by cheque, bank draft, wire, or electronic transfer. Its purpose is to document the true source of the money so you, your brokerage, and FINTRAC can assess money‑laundering and terrorist‑financing risk.

You will record information similar to the FINTRAC Individual Identification Record (legal name, address, occupation, basic ID details, and a risk rating), but the Receipt of Funds form also requires precise banking details for the account from which the funds actually came. This usually includes the financial institution name, branch address or transit number, account holder’s name, and the full account number for the client’s own account.

You must record your client’s personal (or corporate/entity) bank account information, not just what appears on a bank draft or certified cheque. The printed details on the draft belong to the financial institution, not your client, and do not identify the true source of funds.

Instead, determine which account the money was taken from before the draft or certified cheque was issued and obtain full details, typically from the client directly or from reliable documents such as online banking records or a bank statement. Ensure the account is in the correct name and that all information is complete and legible.

Properly documenting the client’s actual account of origin creates a clear audit trail, supports accurate risk assessment and monitoring, and ensures compliance with federal anti‑money‑laundering legislation. Incomplete or incorrect information can expose you and your brokerage to compliance findings, penalties, or additional regulatory scrutiny.

Corporate Identification Information Record FINTRAC

The Corporate Identification Information Record is the identification form for a corporation or other entity. Its purpose is to confirm the corporate client’s legal identity, structure, and control so you can properly assess risk and comply with FINTRAC requirements.

To complete this form, you must obtain and verify key formation documents (such as Articles or Certificate of Incorporation or a corporate registry search), confirm details like legal name, registration number, jurisdiction, and status, and ensure the form matches the official records. Clear, legible copies of these documents should be retained in your file.

You are also required to identify who ultimately owns or controls the corporation. Under FINTRAC guidelines, anyone with more than 25% ownership or control is a “beneficial owner,” and each must be Individually ID’d and PEP’d—that is, have their identity verified using the Individual Identification Record and be assessed for politically exposed person (PEP) status. This information supports accurate risk assessment and demonstrates compliance with federal anti–money‑laundering and anti–terrorist‑financing obligations.

 

 

Tools & Resources

This can all be overwhelming for an agent. The forms, the risk assessments, and the documentation requirements are detailed, time‑sensitive, and easy to get wrong when you are also trying to manage clients, negotiations, and deadlines. To support you with this, our brokerage employs a software platform called “reallytrusted,” which streamlines the entire FINTRAC compliance process. It guides you step‑by‑step through the required information, helps ensure nothing is missed, and organizes your records in a clear, auditable format. By using reallytrusted, you can complete your obligations more efficiently and confidently, reduce the risk of errors, and focus more of your time on serving your clients and building your business.