Canada’s anti-money laundering (AML) framework is entering another enforcement phase soon. Bill C-2 reform is bringing new AML regulations Canada that will change the compliance landscape for various businesses.
If you want to learn about the new AML regulations and how they’ll affect you, don’t look any further. Our comprehensive guide is for everyone looking for more information about the AML changes that will likely take effect in late 2025.
What is the Primary Legislation that Governs AML/ATF Requirements in Canada?
The primary legislation that governs AML/ATF requirements in Canada is the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). Its laws empower FINTRAC to detect and deter money laundering, terrorist financing, and sanctions evasion.
Any business that is non-compliant with AML regulations Canada is susceptible to severe consequences. For example, FINTRAC may impose a sudden audit and order you to halt your operations until you fulfill AML/ATF requirements under the PCMLTFA.
Why AML Regulations in Canada are Changing In 2025?
The late 2025 updates are designed to:
- Strengthen Canada’s compliance with global AML standards
- Expand FINTRAC’s enforcement powers
- Close oversight gaps in cash-heavy and high-risk industries
By implementing new rules, regulatory authorities in Canada are aiming to reduce suspicious transactions and financial crimes.
New AML Regulations Canada 2025: What is Changing For Businesses?
Many new AML regulations have been released for various businesses in 2025. For example, FINTRAC targeted cheque cashers by accelerating new rules from October 2025 to April 2025.
However, regulatory authorities such as FINTRAC decided to implement some rules according to their original timeline. These include new AML regulations Canada 2025. Let’s look at them in detail:
- Mandatory FINTRAC Enrollment for all Reporting Entities
Previously, only MSBs had to register with FINTRAC and get a license. The new AML regulations Canada are changing things by requiring all reporting entities except MSBs to enroll with FINTRAC.
Remember, the only reason money service businesses don’t have to enroll is that they will already have a FINTRAC MSB license. Businesses that must enroll for AML compliance must :
- Submit necessary business information through a specific process to list on FINTRAC’s public roll list
- Renew their enrollment within the set renewal period
- Submit updates to business information within 30 days of their enrollment or renewal
The exact information that entities must submit to enroll with FINTRAC has not been disclosed yet. It will likely include your business name, office address, entity, and other professional details.
- Cash Transaction Ban Over $10,000
One of the biggest changes to the AML policies in Canada in 2025 is the introduction of a new PCMLTFA offence. All enrolled entities will be prohibited from accepting $10,000 or more in cash, deposits, or donations (single or related transactions).
Some exemptions will apply to specific financial institutions, such as:
- Banks
- Trust companies
- Loan companies
Although these institutes can prescribe additional exempt institutes according to AML regulations in Canada, FINTRAC has specified that MSBs will never be one of the exempt institutes.
Any business that is found guilty of this new offence under the 2025 AML regulations will be subject to prosecution by indictment, fines up to three times the cash amount involved in the offence, or administrative monetary penalties (AMPs) by FINTRAC.
- Compliance Program Effectiveness as a Legal Obligation
MSBs, PSPs, and other businesses in Canada have been developing compliance programs for several years to pass FINTRAC’s license registration processes.
Until now, a risk-based approach for compliance programs was only a best practice that could increase your chances of licensing your business. From late 2025, this best practice will turn into a legal obligation for all entities.
Every business in Canada that wants to register or enroll with FINTRAC must ensure its AML compliance programs are risk-based, documented, and auditable.
FINTRAC can evaluate program adequacy and issue penalties for deficiencies. Businesses must also integrate AML risk assessments into ongoing operations.
- Mandatory Compliance Agreements
If a reporting entity violates the PCMLTFA, it must enter into a compliance agreement with FINTRAC. The contract is non-negotiable and a legal obligation for non-compliant businesses.
If you fail to enter into an agreement or follow its rules, the regulatory authority will have the full right to issue a compliance order. You may also face:
- Additional penalties
- Public disclosure
The new AML regulations Canada will increase regulatory and reputational risk for non-compliant businesses. These strict rules have been proposed to ensure every company follows Canadian AML regulations.
- Increased Administrative Monetary Penalties
Bill C-2 is raising the stakes for Canadian businesses by implementing a new administrative monetary penalty framework. Under the new regulations AML Canada 2025, the penalties will be as mentioned below:
- Minor violations: up to $40,000
- Serious violations: up to $4 million
- Very serious violations: up to $20 million or 3% of global revenue (whichever is lower)
FINTRAC may also consider a business’s ability to pay the penalty before deciding on a specific amount under the new Canada AML regulations.
AML Regulations Canada 2025: Changes That Already Took Place in April
The new AML regulations in Canada were supposed to be implemented in a single phase in October 2025. However, FINTRAC accelerated the timeline for some rules to ensure businesses are not falling behind in AML compliance:
- Expanded Reporting Entity Categories
The categories of reporting entities were expanded in April 2025 to include:
- Factoring companies
- Cheque-cashing businesses
- Finance/easing companies
These sectors must comply with AML obligations such as recordkeeping, suspicious transaction reporting, and internal program development.
- Trade-Based Financial Crime Measures
FINTRAC has implemented new measures for identifying crime-related transactions easily. The April 2025 AML regulations in Canada stated:
- All importers, exporters, bonded warehouses, and logistics providers must declare if goods are linked to proceeds of crime, money laundering, or terrorist financing
- Businesses must retain records of crime-related transactions and file a report for every occurrence
If any entity is not following these AML compliance rules, it may face penalties equal to the value of the goods involved in illicit trade.
- Enhanced Information Sharing
Responsible information sharing has always been a concern for FINTRAC. Under the new regulations:
- Reporting entities can share personal information without client consent if necessary for detecting money laundering or terrorist financing, and if consent would compromise the investigation
- A Code of Practice approved by the Office of the Privacy Commissioner is required and must be renewed every five years
These AML compliance regulations ensure businesses are adhering to FINTRAC’s requirements consistently.
Preparing Your Business for the Bill C-2 Changes
Whether your business has been regulated for years or was recently added as a reporting entity, preparation for the AML regulations Canada changes is essential:
- Review and update compliance programs — ensure they are risk-based and demonstrably effective
- Budget for compliance technology — automate transaction monitoring and reporting where possible
- Train employees on new reporting, enrollment, and cash-handling rules
- Document information-sharing policies — ensure privacy compliance when exchanging client data
- Engage AML legal experts to interpret obligations specific to your sector
Renno Co. & Fintech works with Canadian businesses on FINTRAC enrollment, AML audits, policy drafting, and regulatory guidance to help them stay compliant under both Canadian regimes.
We can guide you about the new AML regulations Canada and help you maintain compliance through our fintech solutions.
FAQs
Who Needs to Comply with AML Regulations?
Money service businesses, payment service providers, leasing companies, factories, and other entities that deal with financial transactions for their clients must ensure AML compliance..
When do the New AML Regulations in Canada Take Effect?
Most of the new AML regulations in Canada, such as Bill C-2, will take effect in late 2025. However, some amendments to the regulations were accelerated to 1st April 2025 and have already taken effect.
Which Businesses must Enroll with FINTRAC?
All reporting entities, including new sectors like factoring and leasing companies, must enroll, except MSBs that have already registered with FINTRAC.
Prepare for Compliance with AML Regulations Canada 2025 with Renno Co. & Fintech
The new AML regulations in Canada are coming into force in late 2025, representing a major shift in the country’s financial crime prevention strategy. Businesses must act now to avoid penalties and maintain compliance.
With deep expertise in FINTRAC compliance and cross-border AML requirements, Renno Co. & Fintech can help your organization navigate these changes confidently. Contact us to understand more about the new Canada AML regulations.
