Canada recently made significantly changes to its anti-money laundering (“AML”) regulations. The Strengthening Canada’s Immigration System and Borders Act (Bill C-12 or “the Act”), which received royal assent on March 26, 2026, effectively amended the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (“PCMLTFA”) to, among other things, increase the penalties that can be imposed for anti-money laundering failures. The maximum administrative monetary penalty for prescribed violations is now CAD40,000 ($28,900) for a minor violation; CAD4 million ($2.89 million) for a serious violation, and CAD20 million ($14.45 million) for a very serious violation, or 3 percent of the individual’s/entity’s gross global income in the year prior to the violation, whichever is greater.
Other amendments to the PCMLTFA include the replacement of the existing optional compliance regime with a mandatory regime that requires all individuals and entities subject to the PCMLTFA to develop and implement an AML compliance program that is “reasonably designed, risk-based and effective.” There is also an amendment that requires every person or entity that receives an administrative monetary penalty to enter into a compliance agreement with the Financial Transactions and Reports Analysis Centre of Canada (“FINTRAC”), Canada’s financial regulator. Persons or entities that refuse to enter into an agreement will be in breach of a “compliance order violation” and anyone who fails to comply with the agreement will be in breach of a new violation under the PCLMLTFA. Under the new regime, persons and entities that are subject to the PCLMLTFA are also prohibited from opening anonymous accounts or accounts for anonymous clients.
Parliament of Canada – Bill C-12