What an EFT report is
An electronic funds transfer report, often called an EFTR, is a report that a Canadian reporting entity files with FINTRAC when it sends or receives an international electronic funds transfer at or above a set threshold. Banks, credit unions, money services businesses and certain other reporting entities are all subject to the requirement.
The report is one of several threshold-based reports under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Others include large cash transaction reports and large virtual currency transaction reports. All three share the same threshold of CAD 10,000 and the same purpose: they give FINTRAC a broad dataset of significant financial flows, which it analyses alongside suspicious transaction reports and other intelligence.
Threshold reports are filed because a transaction meets objective criteria. Nobody at the provider has to form a view that the payment is unusual. That is the most important point for clients to grasp, and the rest of this article builds on it.
Which transfers are reported
The requirement covers international electronic funds transfers. In plain terms, that means a transfer of funds sent from Canada to a destination outside Canada, or received in Canada from outside Canada, through an electronic payment system such as SWIFT. Purely domestic transfers between two Canadian accounts are not international EFTs.
The threshold is CAD 10,000 or more. Transfers in foreign currency count too. A wire of EUR 9,000 is converted into Canadian dollars to see whether it meets the threshold, using the exchange rate the rules require, and depending on the rate it may well be reportable even though the figure on the instruction is below 10,000.
The reporting entity that files is generally the one that sends the transfer out of Canada at the client's request, or the one that receives it from abroad for its client in Canada. Intermediary banks in the middle of the chain have different responsibilities. For a client of a Canadian MSB, the practical point is that the MSB files the report for transfers it sends or receives for you. You do not file anything yourself.
The 24-hour rule
A single transfer of CAD 10,000 or more is reportable. So, in some cases, are several smaller transfers that add up to that amount within a 24-hour window. This is known as the 24-hour rule.
In general terms, a reporting entity must treat multiple transfers as a single transaction for reporting purposes when it knows they were made within 24 consecutive hours and they total CAD 10,000 or more, and they are connected in a way the rules describe, for example because they were requested by or on behalf of the same person or entity, or are for the same beneficiary.
The rule exists because the threshold would be easy to avoid if every payment were looked at in isolation. Providers build systems to aggregate qualifying transfers automatically.
The rule is about reporting, not about blocking anything. Clients who pay several invoices to one supplier on the same day, or who receive several remittances from one customer, will find those payments aggregated and reported where they meet the threshold. That is the system working as designed.
Illustrative examples
The examples below are illustrative only. For simplicity they assume a rate of EUR 1 = CAD 1.50, and the actual rate on a given day will differ.
- One large wire. A client sends EUR 40,000 to a supplier in Italy. That converts to about CAD 60,000, so the MSB files an EFT report.
- Just under in foreign currency. A client sends EUR 7,500. At the illustrative rate that is CAD 11,250, which is above the threshold. The transfer is reported even though the euro figure looks small.
- Several payments to one beneficiary. A client sends EUR 3,000 at 9 am, EUR 2,500 at 2 pm and EUR 2,000 at 8 am the next morning, all to the same supplier. Together that is EUR 7,500, or CAD 11,250, within 24 consecutive hours. The transfers are aggregated and reported as one.
- Small payments to different suppliers. A client sends EUR 1,500 each to five unrelated suppliers in one day. The beneficiaries differ, but the transfers were all requested by the same client within 24 consecutive hours, so they are generally aggregated. The total of EUR 7,500, or CAD 11,250, meets the threshold and is reported. Clients should assume that regular daily volume above the threshold will be reported.
- Incoming funds. A client receives USD 20,000 from a customer in Singapore. The MSB that receives the funds from abroad reports the incoming transfer.
What the report contains
An EFT report records the essential facts of the transfer. In broad terms these include the amount and currency, the date, details of the person or entity that requested the transfer, details of the beneficiary, and information about the institutions involved in sending and receiving it. Much of this is the same information that the travel rule already requires to accompany the payment.
This is why providers ask for complete details on payment instructions. A report that is missing the beneficiary's address or the originator's account number is an incomplete report, and the provider is responsible for its accuracy. Clients who give full, accurate information on every instruction help their provider file correct reports without having to come back with questions.
The report goes to FINTRAC and stays confidential. It is not sent to tax authorities as a matter of routine, it is not published, and it is not visible to other financial institutions. FINTRAC may disclose financial intelligence to law enforcement and certain other bodies only where the legal tests for disclosure are met.
Routine, not suspicious
Clients sometimes worry that being reported means being suspected. It does not. An EFT report is filed because a transfer crossed a border and met a threshold. A manufacturer paying a supplier in Germany, a family office funding an overseas investment and a broker paying its offshore parent company will all generate EFT reports in the ordinary course of business.
A suspicious transaction report is a separate thing entirely. It is based on reasonable grounds to suspect that a transaction is related to money laundering or terrorist financing, it has no threshold, and it is protected by the rule against tipping off. EFT reports, by contrast, are mechanical.
A provider may file both types for the same transaction if circumstances warrant, but the EFT report on its own carries no implication. Most businesses with international operations will have many EFT reports filed about their payments over the years, and the vast majority of them will never be looked at individually.
Why splitting payments is a bad idea
Occasionally a client asks whether a payment can be broken into smaller pieces to stay below CAD 10,000. The answer is no, for three reasons.
First, it will not work. The 24-hour rule aggregates connected transfers, and a provider's systems are built to catch exactly this pattern.
Second, deliberately splitting transactions to avoid a reporting threshold, often called structuring, is a classic indicator of money laundering. A provider that sees a client doing it, or asking to do it, will have to consider whether it has grounds for a suspicious transaction report. The attempt to avoid a routine report can create a far more serious one.
Third, it adds cost and complexity for no benefit. Each payment carries its own processing, and several small wires are harder to reconcile than one larger one.
The right approach is to send payments in the amounts the business actually needs, on the schedule the business actually works to. If you have concerns about confidentiality, ask your provider how it protects client data, rather than trying to change the shape of your payments.
Virtual currency and large transaction reports
A parallel regime applies to virtual currency. A reporting entity that receives virtual currency worth CAD 10,000 or more in a single transaction, or in transactions that are aggregated under a 24-hour rule, files a large virtual currency transaction report with FINTRAC.
For a business that converts fiat to digital assets, this means a large conversion may produce more than one report. An incoming international wire of CAD 10,000 or more may be reported as an EFT, and a receipt of virtual currency of CAD 10,000 or more may be reported as a large virtual currency transaction. Each report reflects a different leg of the activity.
The same principles apply. These reports are routine, they are not a statement of suspicion, and splitting transactions to avoid them is both ineffective and a red flag. As with wires, accurate originator and beneficiary information, and verified wallet details, help the provider complete reports correctly the first time.
What clients need to do
For most clients, EFT reporting requires no action beyond good payment hygiene. A few habits help:
- Give complete beneficiary details on every instruction: full legal name, full address, account number or IBAN, and bank identifier.
- Keep your own details up to date with your provider, especially your registered address and the names of the people authorised to instruct payments.
- Use clear payment references, such as invoice numbers, so that the purpose of each payment is evident.
- Send payments in natural amounts and on your normal schedule.
- Tell your provider in advance about large or unusual transfers, so that it understands them in the context of your business.
None of these steps is unusual. They are the same things that make payments arrive faster and reconcile more easily.
Before you act
This article is general information about international EFT reporting in Canada. It is not legal or tax advice, and the detailed rules, including exactly how transfers are aggregated, are set out in the regulations and FINTRAC guidance.
Reporting rules and FINTRAC guidance are updated from time to time, so check the current position before relying on any detail here. For CCYFX services, see the International payments page.
