It also arms the regulator with two enforcement tools it has never had
Canada's financial regulator can now impose penalties up to 40 times current limits on reporting entities for anti-money laundering and terrorist financing failures.
The change comes through Bill C-12 - the Strengthening Canada's Immigration System and Borders Act - which received Royal Assent on March 26, 2026. The law introduces a new administrative monetary penalties framework under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, and the changes came into force on that same date.
FINTRAC - the Financial Transactions and Reports Analysis Centre of Canada - has had the authority to penalize reporting entities that are in non-compliance with the Act and associated Regulations since December 30, 2008. Bill C-12 introduces several enhancements to those enforcement tools, and they apply to violations that occur after March 26, 2026.
Here is what the new framework looks like. FINTRAC can now define prescribed violations and compliance order violations subject to penalties. It can apply increased maximum penalty amounts - up to 40 times current limits. And it can consider a reporting entity's ability to pay as part of the criteria for determining a penalty amount.
The law also hands FINTRAC two tools it did not previously have: mandatory compliance agreements and compliance orders. Reporting entities that commit prescribed violations after March 26, 2026, will be required to enter into mandatory compliance agreements and may be subject to compliance orders.
FINTRAC is updating its administrative monetary penalties policy and developing new guidance to reflect the changes introduced under the amendments. It will explain how penalties are administered under the new legislative framework. The updated policy will include guidance on compliance agreements and compliance orders, along with an updated approach to calculating penalties. The regulator continues to consult with reporting entities and industry stakeholders as the updated policy and guidance are developed.
The transition between old and new is worth understanding. For violations that occurred entirely before March 26, 2026, FINTRAC will continue to use the existing administrative monetary penalties policy, penalty amounts, and processes. For violations that occur after that date, the new legislative requirements apply.
FINTRAC's supervisory assessments review past activities, and the penalties regime applied depends on both the examination period and the date when any violation occurred. To maintain a consistent approach, FINTRAC will scope examination review periods so they fall entirely within one legislative framework. Examinations covering periods that fall entirely before March 26, 2026, will continue to apply the former administrative monetary penalties policy. Examinations covering periods that occur on or after March 26, 2026, will apply the new one. Each examination will be assessed using a single set of compliance expectations for the entire review period - an approach FINTRAC says supports clarity and consistent supervisory outcomes.
Reporting entities must continue to meet all obligations under the Act and Regulations.
The full text of FINTRAC's administrative monetary penalties changes following legislative amendments is available at https://fintrac-canafe.canada.ca/pen/3-eng under Obligations and guidance, Penalties for non-compliance.
