FINTRAC's New Rules for MSBs Using Agents or Mandataries: What You Need to Know

If you run a Money Services Business (MSB) in Canada and work with third parties to deliver your services, there's something important you need to be aware of. FINTRAC — Canada's financial intelligence agency — has rolled out new compliance requirements specifically for MSBs that use agents or mandataries. These aren't just suggestions. They're mandatory rules, and failing to follow them could put your MSB at serious risk. Let's break it all down in plain language so you know exactly where you stand and what you need to do.

First Things First: What Is an Agent or Mandatary?

This is where a lot of MSB operators get confused — and we hear about it all the time from our clients. Under FINTRAC's definition, an agent or mandatary is any third-party individual or organization that is directly involved in providing money services on your behalf. Think of them as an extension of your business. They're out there handling transactions, processing payments, or performing money transfers under your MSB umbrella.

Who Is NOT Considered an Agent?

Here's the important distinction: not every third party you work with falls under this category. If someone is only handling sales, referrals, or marketing for your MSB, but isn't actually touching the money services side of things, they are not considered agents or mandataries under FINTRAC's rules.

A third party becomes an agent/mandatary when you authorize them to deliver MSB services on your behalf. So your marketing agency? Not an agent. Your referral partner who sends clients your way? Also not an agent. But the individual or company actually facilitating money transfers or currency exchange on your behalf? That's an agent, and the new rules apply.

What Does FINTRAC Require from MSBs?

If you do use agents or mandataries, FINTRAC now expects you to verify that they're eligible to act on your behalf. Here's what that involves.

1. Criminal Record Checks Are Mandatory

You must collect a criminal record check. If the agent/mandatary is an entity, you must obtain checks for the CEO, president, directors, and each person who owns or controls (directly or indirectly) 20% or more of the entity or the shares of the entity.

The purpose? To confirm that none of them have been convicted of specific offences listed under the PCMLTFA (Proceeds of Crime Money Laundering and Terrorist Financing Act). These offences include but are not limited to money laundering, financial fraud, immigration-related fraud, human trafficking, and certain drug-related crimes, among others.

2. Language and Translation Rules

All criminal records must be provided in English or French — Canada's two official languages. If the original document is in another language, you'll need to get it translated. But here's the catch: translation must be attested by a certified translator recognized in Canada (provincial body) or a certified-translator authority in the foreign jurisdiction. This can be a stumbling block for MSBs working with agents abroad, so plan ahead.

Key Timelines You Can't Afford to Miss

FINTRAC has set clear deadlines depending on when you engaged your agents or mandataries.

• For new agents or mandataries: You must complete the eligibility verification before the engagement begins. No exceptions — don't start working with someone until their criminal record check is done and cleared.
• For ongoing agents (re-verification): Once an agent is verified, you're not done forever. You need to re-verify every two years, specifically within 30 days of the anniversary of their initial verification. Mark your calendar.
• For agents engaged before October 1, 2025: If you were already working with agents or mandataries before the new rules kicked in, you are required to complete their verification no later than October 1, 2027. If you haven't done this yet, it's time to act immediately.

Record-Keeping: Don't Throw Anything Away

FINTRAC requires you to retain all criminal record checks and verification documents for a minimum of 5 years. Our recommendation? Keep them for the entire duration of the engagement plus 5 years after it ends. This way, if FINTRAC comes knocking for a compliance review, even years down the road, you'll have everything ready.

Keep in mind that a criminal record check must be issued no more than 6 months before the day you review it. Being over-prepared with your records is always better than scrambling to find documents during an audit.

What Happens If You Don't Comply?

Let's be direct: non-compliance is not something you want to test. MSBs that fail to meet these requirements risk administrative penalties, regulatory findings, and potential disruptions to their operations. FINTRAC takes its mandate seriously, and so should you. The rules are clear, the timelines are set, and the expectations are non-negotiable.

How Approved MSB Services Can Help

We understand that navigating FINTRAC's regulatory landscape can feel overwhelming, especially with new requirements being introduced. That's exactly why we're here. At Approved MSB Services, a proud affiliate of CBES (Canadian Business and Enterprise Services), we help MSBs across Canada stay compliant and ahead of the curve. Our team can assist you with:

• FINTRAC compliance reviews — a thorough assessment of where you stand
• Agent and mandatary verification procedures — we'll help you build a proper verification workflow
• Criminal record compliance workflows — ensuring every document meets FINTRAC's standards
• Record-keeping frameworks — organized, audit-ready documentation systems
• Ongoing regulatory support — because compliance isn't a one-time event