How to Prepare for a FINTRAC Compliance Examination

Introduction

FINTRAC conducts compliance examinations of reporting entities to assess whether their AML and ATF programs meet the requirements of the PCMLTFA. Examinations can be scheduled in advance or triggered by risk indicators. Being well-prepared significantly reduces the stress and risk associated with an examination and demonstrates to FINTRAC that your business takes its compliance obligations seriously.

What FINTRAC Examines

1. Compliance program elements: FINTRAC will review your five core program elements — compliance officer appointment, written policies and procedures, risk assessment, training program, and two-year effectiveness review.

2. Client identification records: Examiners will sample client files to verify that identity verification was performed using acceptable methods and that records are complete and stored correctly.

3. Transaction reporting: FINTRAC will check whether your business has filed required reports — Large Cash Transaction Reports, Electronic Funds Transfer Reports, and Suspicious Transaction Reports — accurately and on time.

4. Ongoing monitoring: Examiners will assess whether your business monitors client relationships on an ongoing basis and updates client information and risk assessments when warranted.

5. Record keeping: All required records must be maintained for a minimum of five years. FINTRAC will verify that records are accessible, organized, and complete.

Preparation Checklist

1. Review your compliance policies: Ensure they are current, specific to your business, and reflect the latest FINTRAC guidance. Generic or outdated policies are a common examination finding.

2. Audit a sample of client files: Before the examination, review a representative sample of your client files for completeness. Check that identity verification records, risk assessments, and transaction records are present and properly documented.

3. Confirm your training records: Ensure that you have documented evidence of staff training — who was trained, when, and on what topics.

4. Complete your effectiveness review: If your two-year effectiveness review is overdue, complete it before the examination. FINTRAC specifically checks for this element.

5. Organize your records: Make sure that all compliance documentation — client files, transaction reports, policies, training records, and risk assessments — is organized and readily accessible. Electronic records should be searchable.

6. Designate a point of contact: Identify who will interact with the FINTRAC examiner during the examination and ensure that person understands your compliance program thoroughly.

7. Address known gaps: If you are aware of compliance gaps, take corrective action before the examination. Examiners view self-identified and corrected issues more favourably than issues discovered during the examination.

How Athenty Can Help

Athenty, a verification intelligence company, provides Smart IDV and KYC services that produce the audit-ready documentation FINTRAC examiners expect to see.

1. Complete verification records: Every Smart IDV and Smart KYC session generates a detailed report with document images, biometric match scores, liveness confirmation, screening results, and timestamps — exactly the evidence FINTRAC reviews during client file sampling.

2. Searchable compliance history: All verification records are stored digitally and can be retrieved quickly when an examiner requests a specific client file.

3. Consistent process: Automated verification ensures that every client goes through the same documented process, eliminating the inconsistencies that manual workflows often introduce.

4. Screening documentation: PEP, sanctions, and adverse media screening results are recorded and timestamped, providing evidence that your screening obligations are being met.

Conclusion

A FINTRAC compliance examination is a normal part of operating as a reporting entity in Canada. Preparation is the best defence — review your program, audit your records, and address known gaps before the examiner arrives. Athenty’s Smart IDV and KYC platform ensures that your identity verification and screening records are complete, consistent, and ready for examination at all times.