Reporting Goods Linked to Money Laundering

Summary#

The final rule titled Proceeds of Crime (Money Laundering) and Terrorist Financing Reporting of Goods Regulations creates rules for declaring, keeping records about, and responding to imported or exported goods when they may be linked to crime. It gives the Canada Border Services Agency (CBSA) clearer authority to collect information at the border, hold goods for inspection, and apply administrative penalties. The trade-related parts are scheduled to take effect on April 1, 2025 (per the accompanying regulatory statement).

What it does#

• Requires traders to declare whether imported or exported goods are proceeds of crime or related to money laundering, terrorist financing, or sanctions evasion. Declarations must be made at the same time and in the same way as regular customs reporting (for example, the usual customs filing or presentation methods).
• Allows the person in charge of a non-commercial passenger vehicle to make the declaration by phone or radio in certain situations.
• Sets record-keeping rules. Anyone who imports, exports, produces, supplies, distributes or consumes goods in situations covered by the rule must keep documents about origin, purchase, value, payment, sales and related accounting:
  • Generally until the sixth anniversary (about 6 years) after importation or exportation.
  • Additional, specific records are required for CSA importers, sufferance warehouses and bonded warehouses (details mirror existing customs and tax record rules).
• Describes how a retention notice must be given (hand-delivery or registered mail; for entities it can be left at the head office) and time limits for retaining goods:
  • For goods sent by courier or mail, the notice must be given within 60 days of import/export, and the retention period after that notice is 30 days.
  • In other cases, the retention period after notice is 7 days.
• Establishes an administrative-penalty process for violations (failing to declare, to keep records, to answer questions, or to provide accurate information), including notices, reviews and appeals.
  • Where the person makes a full disclosure and the breach appears not intentional, penalties range from $150 to $500.
  • In other cases, the penalty is the greater of the fair market value of the goods, the declared value, or the value of the payment transaction.
• The accompanying regulatory statement says the rules will let the CBSA seize and forfeit goods when there are reasonable grounds to believe the goods are proceeds of crime or linked to money laundering/terrorist financing.

Who's affected#

• Traders and businesses that import or export goods, including:
  • Importers and exporters,
  • Carriers and customs service providers,
  • Operators of sufferance and bonded warehouses,
  • People arranging or causing goods to be imported or exported.
• Individuals traveling with goods on non-commercial passenger conveyances (there are phone/radio options).
• The CBSA, which will administer these reporting, retention and enforcement powers.
• Other government agencies and reporting systems may see more leads and referrals as a result (the regulatory statement links this measure to FINTRAC and law enforcement work).

If it is unclear whether a shipment falls under the rules, the regulation refers to the legal test in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act; the regulatory statement explains the focus is on goods tied to proceeds of crime, money laundering, terrorist financing, or sanctions evasion.

Why it matters#

• It fills a gap that regulators say exists for trade-based money laundering. Criminals can hide value in trade transactions (for example, by mis-invoicing or phantom shipments). These rules give border officers a clearer path to ask for documents, keep goods for a limited period, and refer suspicious cases to law enforcement.
• Practically, businesses that import or export may need to keep more detailed records and be prepared to answer questions from border officers. There is a compliance cost and a risk of administrative penalties or seizure if goods are suspected of being linked to crime.
• For the public, the measure aims to strengthen Canada’s ability to disrupt organized-crime funding — a stated priority tied to efforts to reduce harms from drug trafficking (including fentanyl) and other serious crime.
• The rule uses timelines and penalties intended to balance investigative needs with business operations (for example, short retention windows and a lower penalty band where breaches are promptly and fully disclosed).