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

Plain-language summary · AI-assisted · not legal advice

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