Money Services Business (MSB) in Canada and the United States
MSBs in the United States fall under the financial license and apply to all financial industries. In other words, any industry involved in financial services can apply for an MSB license in the United States.
The MSB license in Canada falls under the foreign exchange license, with more detailed regulations and divisions in terms of regulatory scope.
Regulations and regulatory agencies:
Canada: MSBs in Canada are regulated by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (AML/ATF Act) and supervised and managed by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
United States: MSBs in the United States are regulated by the Bank Secrecy Act (BSA) and supervised and managed by the Financial Crimes Enforcement Network (FinCEN) of the U.S. Department of the Treasury.
Registration and compliance requirements:
Canada: MSBs in Canada must register with FINTRAC and comply with the compliance requirements specified in the AML/ATF Act, including reporting large cash transactions and suspicious transactions.
United States: MSBs in the United States must register with FinCEN and comply with the compliance requirements specified in the BSA, including reporting large cash transactions, suspicious activity reports, and conducting customer due diligence.
Review and reporting requirements:
Canada: MSBs in Canada are required to submit regular financial reports, including annual financial reports and monthly reports on large cash transactions.
United States: MSBs in the United States are required to submit various reports, including Currency Transaction Reports (CTRs) and Suspicious Activity Reports (SARs), as well as monitor and report suspicious activities related to anti-money laundering and counter-terrorism financing.
Specific differences in compliance requirements:
Canada and the United States have similar anti-money laundering and counter-terrorism financing compliance requirements, but the specific regulations and standards may vary slightly, so MSBs need to comply with the regulations of their respective countries.
MSB registration process in Canada:
Prepare documents and information: Before registering, necessary documents and information need to be prepared, including a business plan, organizational structure information, business description, shareholder information, etc. You also need to designate a compliance officer.
Submit registration application: You need to submit an MSB registration application to FINTRAC in Canada. This can be done online and requires detailed business information and a compliance plan.
Payment of fees: When submitting the application, you need to pay the relevant registration fees.
Compliance training: After registration, it is necessary to ensure that the compliance officer and employees receive training on anti-money laundering and counter-terrorism financing.
Compliance policies and procedures: It is necessary to establish and implement compliance policies and procedures in accordance with the AML/ATF Act, including customer due diligence, transaction monitoring, and reporting suspicious activities.
Regular reporting: Regular financial reports need to be submitted to FINTRAC.
MSB registration process in the United States:
Obtain necessary licenses: Depending on the type of business, it may be necessary to apply for a financial services license or a money transmission business license.
Register with FinCEN: All MSBs in the United States need to register with FinCEN of the U.S. Department of the Treasury. This requires filling out FinCEN Form 107, providing detailed business information and a compliance plan.
Reporting requirements: MSBs in the United States need to report large cash transactions and suspicious activities, including submitting Currency Transaction Reports (CTRs) and Suspicious Activity Reports (SARs).
Compliance policies and procedures: It is necessary to establish and implement compliance policies and procedures in accordance with the Bank Secrecy Act (BSA), including customer due diligence, transaction monitoring, and compliance reporting.
Regular training: Compliance officers and employees need to receive training on anti-money laundering and counter-terrorism financing.