Canada's anti-money-laundering law overhauled: higher fines, tougher compliance orders and new enrolment regime

Plain-language summary · AI-assisted

The Proceeds of Crime (Money Laundering) and Terrorist Financing Act has been significantly amended in two main waves. First, criminal fines for most compliance offences have been sharply increased — for example, general offences now carry summary-conviction fines up to $2.5 million (previously $250,000) and indictable fines up to $5 million (previously $500,000), while reporting failures can attract fines of up to $10 million. Second, the administrative-penalty framework has been restructured: the old 'compliance agreement' model is replaced by a formal compliance-order regime, with new defined terms ('prescribed violation' and 'compliance order violation'), higher penalty ceilings (up to $20 million per entity for prescribed violations and up to $30 million for compliance order violations), and a new ability-to-pay factor in penalty calculations. Compliance officers and senior management at regulated businesses — banks, money-services businesses, currency exchanges, real-estate professionals and others covered by section 5 — must ensure their anti-money-laundering programs meet a new explicit standard of being 'reasonably designed, risk-based and effective.' A new 'enrolment' obligation (not yet in force) will require virtually all section-5 persons and entities to register with FINTRAC on a separate roll, with denial, revocation and Federal Court appeal rights. FINTRAC can now share intelligence with the Commissioner of Canada Elections, and certain seizure-review decisions have been reframed around whether the seizing officer had reasonable grounds, rather than a final determination on the nature of the goods.

Who this affects
banks and other deposit-taking institutions · money services businesses and currency exchanges · real estate professionals and mortgage brokers · casinos and other regulated reporting entities · compliance officers and legal counsel at section-5 entities