{"id":56358,"date":"2026-05-19T14:31:05","date_gmt":"2026-05-19T14:31:05","guid":{"rendered":"https:\/\/my.legal500.com\/developments\/?post_type=press_releases&p=56358"},"modified":"2026-05-19T14:31:21","modified_gmt":"2026-05-19T14:31:21","slug":"canadas-new-administrative-monetary-penalties-framework-under-the-pcmltfa","status":"publish","type":"press_releases","link":"https:\/\/my.legal500.com\/developments\/press-releases\/canadas-new-administrative-monetary-penalties-framework-under-the-pcmltfa\/","title":{"rendered":"Canada’s new administrative monetary penalties framework under the PCMLTFA"},"content":{"rendered":"

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has published guidance on the implementation of a new administrative monetary penalties (AMP) framework under the\u00a0Proceeds of Crime (Money Laundering) and Terrorist Financing Act<\/em>\u00a0(PCMLTFA<\/em>). While FINTRAC has held the authority to impose AMPs on reporting entities (REs) since December 30, 2008, the new AMP framework significantly enhances FINTRAC\u2019s enforcement toolkit.<\/strong><\/p>\n

<\/p>\n

This framework was enacted by the\u00a0Strengthening Canada’s Immigration System and Borders Act<\/em>\u00a0(Bill C-12) and took effect on March 26, 2026. It was introduced alongside other notable amendments to the\u00a0PCMLTFA\u00a0<\/em>and associated Regulations, discussed in our earlier finance alert:\u00a0Canada implements amendments to the\u00a0PCMLTFA<\/em>\u00a0anti-money laundering and anti-terrorist financing regime<\/a>. The discussion below provides a more detailed breakdown of the new AMP framework and its practical implications for REs.<\/p>\n

Transition and implementation<\/strong><\/h4>\n

At the outset, it is important to emphasize that FINTRAC will continue to assess compliance with the\u00a0PCMLTFA\u00a0<\/em>and associated Regulations using the AMP policy applicable to the\u00a0period under review<\/em>. This policy is contingent on whether the period under review falls entirely before or after March 26, 2026.<\/p>\n

Specifically, where a review period falls entirely before March 26, 2026, FINTRAC will apply the pre-existing AMP policy, including the previous penalty amounts and enforcement processes. Conversely, violations occurring on or after March 26, 2026, are subject to the new AMP framework. To promote regulatory clarity and consistency, FINTRAC has confirmed that each examination will be assessed using a single set of compliance expectations for the entire review period.<\/p>\n

Key changes to the AMP framework<\/strong><\/h4>\n

Under the new AMP framework, FINTRAC will have the authority to:<\/p>\n

    \n
  • define prescribed violations and compliance order violations subject to penalties;<\/li>\n
  • apply increased maximum penalty amounts of up to 40 times the current limits;<\/li>\n
  • consider the ability to pay as part of the criteria for determining a penalty amount;<\/li>\n
  • require mandatory compliance agreements for prescribed violations; and<\/li>\n
  • introduce compliance orders as an additional enforcement tool.<\/li>\n<\/ul>\n

    Increased maximum penalty amounts<\/strong><\/h4>\n

    Under the pre-existing AMP framework, minor violations incur penalties of $1 to $1,000 per violation; serious violations range from $1 to $100,000 per violation; and very serious violations range from $1 to $100,000 per violation for individuals and $1 to $500,000 for entities. The limits apply to each violation individually, and multiple violations may result in a total amount that exceeds these limits.<\/p>\n

    The new AMP framework proposes significantly increased penalties, potentially increasing them up to 40 times the existing limits. Specifically, for prescribed violations, the maximum AMP would increase to $4,000,000 for individuals (up from $100,000) and $20,000,000 for entities (up from $500,000). This framework also introduces penalties for contravention of compliance orders, discussed further below. These penalties can be substantial: for individuals, up to the greater of $5,000,000 or 3% of the individual\u2019s income from domestic and foreign sources, and for entities, up to the greater of $30,000,000 or 3% of the entity\u2019s gross revenue from domestic and foreign sources.<\/p>\n

    Ability to pay as a criterion in determining penalty amounts<\/strong><\/h4>\n

    Notably, the inclusion of \u201cability to pay\u201d as an explicit criterion in determining penalty amounts marks a shift from the three pre-existing penalty criteria, which focused on:<\/p>\n

      \n
    • the purpose of the AMPs, which is to encourage compliance, not to punish;<\/li>\n
    • the harm done by the violation; and<\/li>\n
    • the REs\u2019 history of compliance.<\/li>\n<\/ul>\n

      Compliance agreements and compliance orders<\/strong><\/h4>\n

      The new AMP framework introduces two key enforcement mechanisms. First, mandatory compliance agreements will be required in all cases where an AMP is imposed for a prescribed violation. REs that commit prescribed violations after March 26, 2026, will be required to enter into these mandatory compliance agreements. Second, compliance orders are introduced as a new enforcement tool, and contravention of a compliance order is designated as a distinct violation under the\u00a0PCMLTFA<\/em>. REs may also be subject to compliance orders in addition to any AMP imposed.<\/p>\n

      Existing AMP procedures continue to apply<\/strong><\/h4>\n

      While the new AMP framework enhances FINTRAC’s enforcement tools, the core procedural elements of the AMP policy remain broadly intact. An RE subject to an AMP will receive a notice of violation detailing the penalty amount, payment instructions, and information on the right to make written representations to FINTRAC’s Director and CEO within 30 days of receipt. If the penalty is paid, the RE is deemed to have committed the specified violations, concluding the process, and FINTRAC will publish the AMP details. Alternatively, REs may request a review by making written representations to the Director and CEO within 30 days of receipt, who will decide on a balance of probabilities whether the violation was committed and may impose the proposed penalty or a lesser amount. REs receiving a decision notice then have 30 days to appeal to the Federal Court of Canada, which holds the authority to confirm, set aside, or change a notice of decision.<\/p>\n

      Conclusion<\/strong><\/h4>\n

      REs must continue to meet all obligations under the\u00a0PCMLTFA<\/em>\u00a0and associated Regulations. With the substantially increased penalty maximums, the introduction of compliance orders, and the mandatory compliance agreement requirement, the consequences of non-compliance have materially increased.<\/p>\n

      FINTRAC is updating its administrative monetary penalties policy to reflect the key changes discussed above, which REs should continue to monitor. The updated policy will include:<\/p>\n

        \n
      • guidance on compliance agreements and compliance orders; and<\/li>\n
      • an updated approach to calculating penalties.<\/li>\n<\/ul>\n

        If you are concerned that your business may be impacted, contact a member of our Financial Services or Compliance team for assistance.<\/p>\n","protected":false},"featured_media":0,"template":"","class_list":["post-56358","press_releases","type-press_releases","status-publish","hentry"],"acf":[],"_links":{"self":[{"href":"https:\/\/my.legal500.com\/developments\/wp-json\/wp\/v2\/press_releases\/56358","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/my.legal500.com\/developments\/wp-json\/wp\/v2\/press_releases"}],"about":[{"href":"https:\/\/my.legal500.com\/developments\/wp-json\/wp\/v2\/types\/press_releases"}],"wp:attachment":[{"href":"https:\/\/my.legal500.com\/developments\/wp-json\/wp\/v2\/media?parent=56358"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}