Guideline 9: Alternative to Large Cash Transaction Reports to FINTRAC

Appendix 4: Examples of How to Apply the Conditions in Considering the Alternative to Large Cash Transaction Reports

The following four examples show how to apply the conditions in considering the alternative to large cash transaction reports for a business: 

• Example 1:  One corporation's account with deposits from many outlets
• Example 2:  One business with various accounts
• Example 3:  Different businesses depositing funds into one account
• Example 4:  Seasonal business

For more information about the conditions to be met, see Section 2 of this guideline. 

Example 1: One corporation's account with deposits from many outlets

Your client is a corporation that operates one business with several outlets.  Each outlet deposits cash into the same account held by the corporation.  The deposits for each outlet vary on a weekly basis, but the annual average based on the deposits for all the outlets is at least $10,000 twice a week.  You know that several outlets make cash deposits of less than $10,000, but the total deposits for the business on any given day are usually over $10,000.  

Assumptions in this example: 

• The deposits are consistent with the usual practice of this business and you have taken reasonable measures to determine the source of the cash. 
• The corporation is engaged in business activities that meet the conditions for the alternative to reporting large cash transaction reports. 
• The corporation has had the above-mentioned account with your financial entity for at least 24 months or had an account with another financial entity for at least 24 months immediately before opening an account with you. 

In this example, all conditions are met for you to choose the alternative to large cash transaction reports for this client's business. 

Example 2: One business with various accounts

Your client is a corporation with one business but various accounts. One of these accounts receives daily cash deposits for the business of $10,000 or more. 

Assumptions in this example:

• The accounts are associated with the same business.
• The deposits for the business are consistent with the usual practice of each business and you have taken reasonable measures to determine the source of the cash. 
• The corporation is engaged in business activities that meet the conditions for the alternative to large cash transactions reports. 
• The corporation has had the account that receives the cash deposits with your financial entity for at least 24 months or had an account with another financial entity for at least 24 months immediately before opening an account with you. 

In this example, all conditions are met for you to choose the alternative to large cash transaction reports for this client's business.  If you do so, you will not report large cash transactions regarding any of the business' accounts.  The alternative to large cash transaction reports applies to the client's business, not just to a particular account. 

Example 3:  Different businesses depositing funds into one account

Your client is a corporation with three separate businesses for income tax purposes.  Daily cash deposits are made to the same account for all three businesses.  You are unable to distinguish what part of each deposit relates to each distinct business.  The corporation has no other accounts that receive cash deposits. 

In this example, you would not be able to choose the alternative to large cash transaction reports, even if the corporation was engaged exclusively in business activities that meet the conditions for the alternative to large cash transactions and had an account with your financial entity for at least24 months.  This is because you would not be able to take reasonable measures to determine the source of the cash for the deposits.  Furthermore, you would not be able to determine whether the deposits were consistent with the usual practice of each business, since you would not know what portion of each deposit originates from each business.

Example 4:  Seasonal businesses

Your client is a corporation with a seasonal business.  The business only operated for nine of the previous 12 months.  However, in those nine months, there were 104 deposits in cash of $10,000 or more. 

Assumptions in this example: 

• The deposits are consistent with the usual practice of this business and you have taken reasonable measures to determine the source of the cash. 
• The corporation is engaged in business activities that meet the conditions for the alternative to reporting large cash transaction reports. 
• The corporation has had the above-mentioned account with your financial entity for at least 24 months or had an account with another financial entity for at least 24 months immediately before opening an account with you. 

In this example, all conditions are met for you to choose the alternative to large cash transaction reports for this client's business.  The average over the previous 12 months of deposits works out to two cash deposits of $10,000 or more per week. 

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