AML/ATF Rules Expand to Armoured Cars and Mortgages

Summary#

This is a package of proposed changes called Regulations Amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. It would let FINTRAC recover some of its operating costs, bring armoured car companies and more mortgage lenders under anti‑money‑laundering rules, tighten rules for correspondent banking, raise penalties for undeclared cash at the border, and make several technical updates. The government estimates the total cost to businesses at $21,005,370 over 10 years (about $2,990,629 per year).

What it does#

• Sets a formula so FINTRAC can recover the costs of its compliance work from reporting entities. The cost‑recovery scheme would start on April 1, 2024.
• Makes businesses that transport cash and similar instruments (armoured car companies) into reporting entities. They would need to:
  • build a compliance program,
  • verify client identity and beneficial ownership,
  • keep records and report certain transactions.
  • These armoured car rules would come into force after 6 months following final publication.
• Brings all parts of the mortgage lending chain (brokers, lenders, administrators) into the rules. They would have to:
  • build compliance programs,
  • verify identities and beneficial owners,
  • keep records for at least five years and report suspicious or large cash transactions (threshold $10,000).
  • These mortgage rules would come into force after 8 months.
• Tightens due diligence and ongoing monitoring for correspondent banking relationships. New requirements include assessing the foreign bank’s reputation and supervision. These rules would come into force after 8 months.
• Raises penalties for failing to declare cross‑border cash (the reporting threshold stays at $10,000). Proposed penalty structure:
  • 5% of undeclared funds, up to $2,500, for a first‑time full disclosure with no concealment;
  • 25% of undeclared funds for concealment or prior seizure;
  • 50% of undeclared funds for concealment using a false compartment or repeat concealment.
• Changes how administrative monetary penalty (AMP) notices can be sent so FINTRAC can use secure electronic delivery without a redundant paper copy.
• Requires money services businesses (MSBs) to provide contact details (phone and email) for senior officers and the number of agents/branches by country. The MSB changes would come into force after 12 months.
• Adds a set of technical fixes and clarifications to existing reporting regulations.
• Adds AMP penalty ranges for new reporting obligations: minor violations $1 to $1,000, serious violations $1 to $100,000, and very serious violations up to $1 to $500,000 for entities (individuals capped at $100,000).

Who's affected#

• Armoured car companies that move cash and negotiable instruments. Small operators may face proportionally higher startup costs.
• Mortgage sector players not already covered by federal rules: mortgage brokers, private lenders, mortgage finance companies and administrators.
• Banks, trust companies, life insurers and other entities that will pay into FINTRAC’s cost‑recovery formula.
• Money services businesses (MSBs), which must give more contact and geographic information.
• Cross‑border travellers carrying $10,000 or more in cash or monetary instruments. Penalties for non‑declaration would increase.
• FINTRAC and the Canada Border Services Agency (CBSA) — FINTRAC gains new funding and more entities to supervise; CBSA will handle potentially more and larger penalty cases and appeals.
• The government estimates about 8,572 reporting entities are affected in total, and about 8,440 small businesses would see impacts.

Why it matters#

• The changes are meant to close gaps where criminals can move or hide illicit funds. That includes cash transport, certain mortgage lending, and some international banking links.
• For businesses this means more paperwork, new checks on customers, and in some cases new fees (because of the cost‑recovery scheme). The government expects many small firms will need time and support to adapt; it plans transition periods (mostly 6–8 months, 12 months for MSBs).
• For travellers, the bigger, graduated penalties make the consequences of not declaring large amounts of cash more serious.
• The rules aim to bring Canada closer to international standards (the FATF). That matters for Canada’s financial reputation and for how easily Canadian banks deal with foreign partners.
• Benefits such as reduced criminal activity, better law‑enforcement intelligence, and improved international standing are described qualitatively in the source and were not monetized. The source also notes uncertainty in exactly how much illicit activity these measures will prevent.