Canada Introduces New Compliance Rules for Businesses in Anti-Money Laundering Push
| 2025-03-26
FINTRAC rolls out 2025 anti-money laundering reforms, including new obligations for leasing, factoring, and cheque-cashing firms across Canada.
FINTRAC rolls out 2025 anti-money laundering reforms, including new obligations for leasing, factoring, and cheque-cashing firms across Canada.
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), the federal authority responsible for enforcing Canada’s anti-money laundering (AML) and counter-terrorist financing laws, has announced the rollout of new regulatory obligations for several previously unregulated business sectors.
These changes, published in the Canada Gazette on 26 March 2025, implement legislative measures proposed in the federal government’s 2024 budget. The aim is to broaden the scope of Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, ensuring greater scrutiny across the financial system.
According to FINTRAC, the new rules now apply to factoring companies, cheque-cashing services, and businesses engaged in financing or leasing. These sectors will be required to comply with recordkeeping, client identification, and suspicious transaction reporting obligations that are already in place for banks and other financial institutions.
Expanded Reporting Framework
Beginning 1 April 2025, firms operating in the affected sectors will need to establish compliance programs aligned with FINTRAC’s expectations. These include assessing and documenting risks related to money laundering and terrorist financing, monitoring transactions, and submitting reports to FINTRAC as required by law.
A further change, taking effect on 1 October 2025, will introduce enhanced corporate transparency rules. Businesses that detect material discrepancies between their internal records and a corporation’s official beneficial ownership data will be required to report these differences to Corporations Canada, the federal registry authority.
This measure is designed to strengthen the integrity of Canada’s beneficial ownership registry and is targeted at preventing the misuse of corporate entities for illicit purposes.
Voluntary Information Sharing Now Permitted
In a related development, the new regulatory framework includes provisions that allow private-to-private information sharing between reporting entities. This is intended to help financial institutions and other regulated businesses detect and disrupt money laundering and sanctions evasion more effectively.
While participation in the information-sharing initiative is voluntary, entities must submit a code of practice to FINTRAC and the Office of the Privacy Commissioner of Canada for review and approval. The guidelines ensure that personal privacy protections remain in place even as data sharing is expanded.
FINTRAC highlighted that the Financial Action Task Force (FATF), the global standard-setting body for anti-money laundering measures, has recognised private-sector collaboration as an important component of national AML strategies.
Support and Guidance for Affected Businesses
To assist new reporting entities in complying with their obligations, FINTRAC has committed to a year-long programme of outreach and industry consultation. During this period, the agency will emphasise education and support over enforcement.
Guidance documents tailored to the specific needs of cheque cashers, financing and leasing entities, and factoring businesses have been published and are available on the FINTRAC website. Additional materials will be released by autumn 2025.
FINTRAC stated that it will also engage directly with affected industries to clarify expectations and help businesses build effective compliance programmes from the outset.
Context
Canada’s AML legislation is governed by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, which mandates reporting obligations for financial institutions, casinos, and designated non-financial businesses. Over time, this framework has expanded to cover real estate professionals, accountants, and dealers in precious metals and stones.
The latest reforms mark a continued evolution of the regime, bringing in sectors previously considered lower risk but now recognised as potential vulnerabilities in light of changing criminal typologies.
The Government of Canada has committed to modernising its AML system in line with international best practices and has taken steps to address long-standing criticisms from global watchdogs about gaps in corporate transparency and enforcement capacity.
For additional details, FINTRAC encourages businesses to consult the official regulatory guidance and to contact the agency for clarification or assistance in preparing for compliance.
These changes, published in the Canada Gazette on 26 March 2025, implement legislative measures proposed in the federal government’s 2024 budget. The aim is to broaden the scope of Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, ensuring greater scrutiny across the financial system.
According to FINTRAC, the new rules now apply to factoring companies, cheque-cashing services, and businesses engaged in financing or leasing. These sectors will be required to comply with recordkeeping, client identification, and suspicious transaction reporting obligations that are already in place for banks and other financial institutions.
Expanded Reporting Framework
Beginning 1 April 2025, firms operating in the affected sectors will need to establish compliance programs aligned with FINTRAC’s expectations. These include assessing and documenting risks related to money laundering and terrorist financing, monitoring transactions, and submitting reports to FINTRAC as required by law.
A further change, taking effect on 1 October 2025, will introduce enhanced corporate transparency rules. Businesses that detect material discrepancies between their internal records and a corporation’s official beneficial ownership data will be required to report these differences to Corporations Canada, the federal registry authority.
This measure is designed to strengthen the integrity of Canada’s beneficial ownership registry and is targeted at preventing the misuse of corporate entities for illicit purposes.
Voluntary Information Sharing Now Permitted
In a related development, the new regulatory framework includes provisions that allow private-to-private information sharing between reporting entities. This is intended to help financial institutions and other regulated businesses detect and disrupt money laundering and sanctions evasion more effectively.
While participation in the information-sharing initiative is voluntary, entities must submit a code of practice to FINTRAC and the Office of the Privacy Commissioner of Canada for review and approval. The guidelines ensure that personal privacy protections remain in place even as data sharing is expanded.
FINTRAC highlighted that the Financial Action Task Force (FATF), the global standard-setting body for anti-money laundering measures, has recognised private-sector collaboration as an important component of national AML strategies.
Support and Guidance for Affected Businesses
To assist new reporting entities in complying with their obligations, FINTRAC has committed to a year-long programme of outreach and industry consultation. During this period, the agency will emphasise education and support over enforcement.
Guidance documents tailored to the specific needs of cheque cashers, financing and leasing entities, and factoring businesses have been published and are available on the FINTRAC website. Additional materials will be released by autumn 2025.
FINTRAC stated that it will also engage directly with affected industries to clarify expectations and help businesses build effective compliance programmes from the outset.
Context
Canada’s AML legislation is governed by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, which mandates reporting obligations for financial institutions, casinos, and designated non-financial businesses. Over time, this framework has expanded to cover real estate professionals, accountants, and dealers in precious metals and stones.
The latest reforms mark a continued evolution of the regime, bringing in sectors previously considered lower risk but now recognised as potential vulnerabilities in light of changing criminal typologies.
The Government of Canada has committed to modernising its AML system in line with international best practices and has taken steps to address long-standing criticisms from global watchdogs about gaps in corporate transparency and enforcement capacity.
For additional details, FINTRAC encourages businesses to consult the official regulatory guidance and to contact the agency for clarification or assistance in preparing for compliance.
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