Canada´s new federal government has introduced the Strong Borders Act, putting in place an administrative monetary penalty framework of ´unprecedented severity´ for failures in anti-money laundering (AML) compliance.

The Bill´s provisions echo many of the measures first announced in the 2024 Fall Economic Statement issued by Canada´s federal government before the last election. It also places all AML reporting entities under Financial Transactions and Reports Analysis Centre (FINTRAC) regulation, similar to the registration regime currently applicable to money services businesses, and requires them to periodically renew their enrolment.

Currently, FINTRAC´s penalties on reporting entities for non-compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Proceeds of Crime Act) and its regulations carry maximum penalties of CAD1,000, CAD100,000 and CAD500,000, depending on whether the violation is classed as minor, serious or very serious. If the Bill is enacted, these will increase to CAD40,000, CAD4 million and CAD20 million respectively.