Anaya Nolan
Canada has a robust legal framework governing the sharing of money, with a particular focus on combating money laundering, terrorist financing, and sanctions evasion. The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) plays a pivotal role in this context, with the Minister of Finance bearing responsibility for Canada's anti-money laundering and anti-terrorist financing regime. This includes developing policies, assessing information, and strengthening compliance and financial intelligence. The Security of Canada Information Disclosure Act (SCIDA) also comes into play, delineating the lawful disclosure of information by designated government institutions, such as the Royal Canadian Mounted Police (RCMP) and CSIS, to maintain national security. Additionally, amendments to the PCMLTFA and the introduction of the Canada-US Joint Strike Force further bolster efforts to combat money laundering, drug trafficking, and transnational crime. Trustees and advisors also have unique rules and responsibilities when handling other people's money, with a historical emphasis on the prohibition of duty delegation.
| Characteristics | Values |
|---|---|
| Anti-Money Laundering and Anti-Terrorist Financing | The government has strengthened Canada's framework with new regulatory amendments. |
| Proceeds of Crime (Money Laundering) and Terrorist Financing Act | The government has amended the Act to improve the ability of reporting entities to share information and detect money laundering and terrorist financing. |
| Privacy Law | Information shared under the Code is subject to privacy law, i.e., PIPEDA. |
| Financial Intelligence | The government has invested in enhancing financial intelligence to support money laundering investigations. |
| Investigative Capacity | The Integrated Money Laundering Intelligence Partnership supports the sharing of money laundering and organized crime intelligence between law enforcement and big banks. |
| Border Security | Enhancements to the Canada Border Services Agency's authorities aim to reinforce the detection and disruption of trade-based financial crime. |
| Information Sharing | A new framework allows private institutions to share information related to money laundering, terrorist financing, and sanctions evasion. |
| Reporting Discrepancies | Reporting entities must report material discrepancies between their records and a company's registry filings with Corporations Canada when there is a high risk of money laundering or terrorist financing. |
| Lawyer Exemption | Lawyers are exempt from money-laundering laws due to solicitor-client confidentiality. |
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What You'll Learn
Anti-money laundering and anti-terrorist financing framework
Canada has a robust anti-money laundering and anti-terrorist financing framework, commonly referred to as the AML/ATF Regime or PCMLTFA, which aims to prevent money laundering and terrorist financing activities. The Department of Finance leads this initiative, developing policies and analysing threat actors and their methods for laundering money and financing terrorism.
The AML/ATF Regime has been strengthened over the years with legislative and regulatory amendments. For instance, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its Regulations ensure that financial institutions maintain records of money transactions to prevent terrorists and criminals from exploiting the system. While this initially applied to lawyers, they have since been excluded due to concerns about infringing on solicitor-client confidentiality.
In 2024, amendments were proposed to enhance the ability of reporting entities to share information, allowing them to detect and deter money laundering, terrorist financing, and sanctions evasion. These amendments also aim to improve data collection on goods and facilitate information sharing with law enforcement to prosecute suspected criminality.
Further regulatory amendments were announced in 2025, with the government investing over $379 million to enhance the effectiveness of the AML/ATF Regime. These amendments include enhancing compliance, financial intelligence, information sharing, and investigative capabilities. Additionally, new criminal offences have been added, penalties have been strengthened, and the Regime has been expanded to new sectors vulnerable to money laundering.
The 2025 amendments also introduced a new framework allowing private institutions to share information related to money laundering, terrorist financing, and sanctions evasion. This makes it harder for criminals to exploit the financial system. Factoring companies, cheque-cashing businesses, and financing and leasing companies now have AML/ATF obligations, closing regulatory gaps that criminals previously took advantage of.
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Terrorist Financing Regulations
Canada has implemented a robust legislative framework to combat terrorist financing, which is a key component of its overall efforts to counter terrorism and ensure national security. The country's Anti-Money Laundering and Anti-Terrorist Financing Regime Strategy for 2023-2026 outlines a comprehensive approach involving various government departments and agencies, private sectors, and international partners.
The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) serve as the primary legislation addressing terrorist financing in Canada. This Act sets out the obligations for reporting entities, which include financial institutions and other businesses, to detect, prevent, and disrupt terrorist financing activities. These reporting entities are required to report suspicious transactions, perform customer due diligence, and maintain records to identify the sources of funds.
To support the effective implementation of the PCMLTFA, the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations provide detailed guidelines. These regulations define key terms, outline registration requirements for money services businesses, and specify the penalties for non-compliance. They also establish the role of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) in administering and enforcing the regulations.
The regulations are regularly reviewed and updated to address evolving threats and maintain their effectiveness. Amendments are proposed to enhance information sharing among reporting entities, strengthen oversight by FINTRAC, and improve coordination with law enforcement agencies. These amendments aim to close gaps in the existing regime, as identified by the Financial Action Task Force (FATF) and the Cullen Commission, and ensure Canada's trade system is protected from illicit activities.
Additionally, Canada actively engages with international organizations and allies to stay abreast of emerging trends and best practices in countering terrorist financing. This includes collaboration with the Financial Action Task Force (FATF), Egmont Group of Financial Intelligence Units (FIUs), and Five Eyes partners (the US, UK, Australia, and New Zealand). By sharing information and expertise, Canada contributes to and benefits from global efforts to combat terrorist financing.
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Money laundering and terrorist financing sanctions
Canada has a robust framework to counter money laundering and terrorist financing, with continuous efforts to strengthen it. The country's Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime is a key part of this framework, and it has seen significant investments over the years to enhance its effectiveness.
The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) plays a crucial role in Canada's AML/ATF strategy. Amendments to the PCMLTFA and the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations aim to improve information sharing between reporting entities, such as financial institutions, to detect and deter money laundering, terrorist financing, and sanctions evasion. These amendments also aim to enhance privacy protections for personal information disclosure.
To address the threats posed by transnational criminal networks, Canada has taken a cooperative approach across various jurisdictions, including municipal, provincial, federal, and international. The country has also focused on preventing the abuse of charities for terrorist financing, with measures in place to revoke charitable status immediately if a charity is listed as a terrorist entity.
Canada's commitment to combating money laundering and terrorist financing is further demonstrated by its ongoing initiatives. The Second Annual "Spin Cycle Conference" in 2023 brought together AML professionals to discuss enforcement, prosecutions, and information sharing. Additionally, the government has invested $76 million to strengthen sanctions implementation and address sanctions evasion linked to financial crimes.
The country's efforts to strengthen its AML/ATF framework are ongoing, with new regulatory amendments announced in 2025 to make it more robust and effective in addressing financial crime threats. These amendments include allowing private institutions to share information related to money laundering, terrorist financing, and sanctions evasion, as well as closing regulatory gaps that criminals exploit.
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Money laundering and transnational crime
Money laundering is a process used to disguise the origin of criminal proceeds to make them appear as if they originated from legitimate sources. Terrorist financing is the collection and provision of funds from legitimate or illegitimate sources for terrorist activity. In Canada, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations aim to combat these financial crimes.
The transnational nature of modern criminal networks and the techniques they employ heightens the complexity of addressing these threats, emphasizing the need for cooperation across municipal, provincial, federal, and international jurisdictions. Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime Strategy 2023-2026 acknowledges the importance of collaboration between various national and international partners to ensure the smooth functioning of the regime. This includes working with provincial, territorial, and municipal departments and agencies, private sector reporting entities, and international partners to combat money laundering and terrorist financing on a transnational level.
To strengthen Canada's anti-money laundering framework, the government introduced regulatory amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations in November 2024. These amendments aim to enhance the ability of reporting entities to share information while maintaining privacy protections. They also propose an oversight role for FINTRAC and the OPC in an information-sharing framework for entities regulated under the PCMLTFA. Additionally, the amendments address the longstanding gap in the regime identified by the FATF and the Cullen Commission, protecting Canada's economy and trade system from illicit activities.
Canada has taken several recent actions to combat money laundering and transnational organized crime, including the creation of a Joint Canada-U.S. Strike Force, the appointment of a Fentanyl Czar, and the launch of the Integrated Money Laundering Intelligence Partnership (IMLIP). The IMLIP facilitates the sharing of intelligence between law enforcement and Canada's big banks to tackle money laundering and organized crime. Furthermore, Canada has listed seven transnational criminal organizations, including cartels, as terrorist entities, enabling law enforcement to prosecute related offences more effectively and disrupt the flow of fentanyl into the country. These measures demonstrate Canada's commitment to combatting transnational crime and protecting its financial system from illicit activities.
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Money laundering and drug trafficking
Organised crime groups (OCGs) have been identified as key actors in money laundering and drug trafficking in Canada. OCGs have access to venues such as strip clubs and massage parlours, which can be used for money laundering purposes. They also have connections to other criminal networks, both domestic and international, and control over various companies, including legitimate businesses, to facilitate their operations.
To counter these threats, the Canadian government has implemented several measures. The Proceeds of Crime (Money Laundering) and Terrorist Financing Act, along with its associated regulations, provide a legal framework to address these financial crimes. The government has also announced regulatory amendments to strengthen Canada's Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) framework, enhancing information sharing between reporting entities to detect and deter illicit activities.
Additionally, Canada has established partnerships like Project Protect, Project Guardian, and Project Chameleon, which focus on combatting money laundering associated with human trafficking, fentanyl trafficking, and romance fraud. The creation of the Canada-U.S. Joint Strike Force further demonstrates Canada's commitment to tackling organised crime, fentanyl trafficking, and money laundering in collaboration with international partners. These efforts aim to safeguard the integrity of Canada's financial system and protect the safety and security of its citizens.
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Frequently asked questions
The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) is a Canadian law that aims to prevent money laundering and terrorist financing by requiring financial institutions to keep records of money transactions and share information with law enforcement.
The Department of Finance is responsible for developing and implementing anti-money laundering policies, including the PCMLTFA. They also assess information and intelligence about threat actors to understand how they launder money and finance terrorism.
Yes, lawyers are currently exempt from these laws due to solicitor-client confidentiality. However, other financial institutions and professionals must comply with the regulations.
Information shared under the PCMLTFA is subject to privacy laws such as PIPEDA, which ensure that personal information is protected while allowing for the necessary sharing of data between entities to detect and prevent financial crimes.
The government has recently announced regulatory amendments to enhance the effectiveness of the AML/ATF Regime. These include strengthening compliance, improving information sharing, and providing new tools to law enforcement. Additionally, a Canada-U.S. Joint Strike Force has been established to combat organized crime, fentanyl trafficking, and money laundering.
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