Canada implements regulatory amendments to bolster AML/CTF efforts and border security

Public Safety Canada stated there were more than 4,000 organized crime groups in Canada in 2024, many of which were or are involved in financial crime. According to a Criminal Intelligence Service Canada report, an estimated CAD$45 billion-CAD$113 billion is laundered through Canada every year, including via illicit shell companies and drug trafficking, particularly fentanyl.

The Canadian government announced on March 7, 2025, new regulatory amendments to further strengthen its anti-money laundering and counter-terrorism financing (AML/CTF) structure, along with Canada/US border security. 

The amendments are intended to fortify Canada’s defenses against financial crimes that have grown in complexity and scope, threatening not only economic stability but also national security. By enhancing the existing framework, the government seeks to spot and deter financial crimes more effectively.

The regulations aim to bolster law enforcement support, investigations, financial intelligence, and information sharing, and to combat sanctions evasion. They complement the more than CAD$379 million the Canadian government has spent to enhance AML/CTF efforts over the last five years. 

The new amendments build on Canada’s Border Plan implemented in December 2024, which aims to strengthen the country’s immigration system and border security. Canada’s Border Plan is focused on:

• Increasing law enforcement support to aid in disrupting the fentanyl trade.
• Improving aerial surveillance, port inspections, and intelligence-collection ability.
• Increasing penalties to deter the drug trade; and enhancing cooperation and information sharing between law enforcement and the financial sector.
• Enhancing cooperation, coordination, and intelligence sharing between the federal, provincial, and local authorities, as well the US.
• Creating a hub to unite these law enforcement bodies.
• Establishing a North American Joint Strike Force unit to battle transnational crime.
• Implementing changes to minimize border traffic, documentation, and other bottlenecks in the immigration and asylum system.

The March 2025 regulatory updates:

• Will aim to improve the Canada Border Services Agency’s ability to detect and deter trade-based financial crimes.
• Will allow private institutions to share financial crime information — including that related to money laundering, sanctions evasion, and terrorist financing — lessening criminals’ abilities to avoid detection. 
• Come on the back of the first working meeting on February 19, 2025, of the Integrated Money Laundering Intelligence Partnership (IMLIP), which allows for the permissible sharing of money laundering and organized crime intelligence between Canada’s large financial institutions and law enforcement.
• The IMLIP will enable an improved response to high-end money laundering, including fentanyl and other drug trafficking, and aims to create a stronger working relationship between financial institutions and law enforcement.
• Will require private institutions to report discrepancies between information provided to them and the data within the federal beneficial ownership registry, which was launched in January 2024. This reporting will try to maintain the registry's accuracy and integrity.
• Aim to close an exploitable regulatory gap regarding factoring companies, check-cashing businesses, and financing and leasing companies.

A key focus of these amendments is to maintain the integrity of the shared Canada/US border, which acts as a critical checkpoint in the ongoing battle against cross-border criminal activities. They also reinforce the country’s commitment to aligning with international partners via the Financial Action Task Force (FATF) — within which Canada is subject to a peer review in 2025 — in fighting financial crimes, thereby working to improve the overall resilience against money laundering and financing of terrorism. 

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) will gain new disclosure powers on April 1, 2025, by being able to disclose financial intelligence to civil forfeiture offices. This strategic move is aimed at enhancing the capacity of these offices to effectively identify and seize criminal assets, as well as being a powerful deterrent to would-be offenders contemplating similar activities.

In conjunction with this, the Minister of Finance is set to update directives to strengthen defenses against potential sanctions-evasion strategies, particularly those connected to the Russian Federation and the Democratic People’s Republic of Korea. These updates are designed to close existing loopholes, and to help ensure Canadian sanctions remain robust and their enforcement is as seamless and effective as possible. 

The recent regulatory amendments mark a step forward in Canada’s ongoing battle against financial crimes and border security threats. By enhancing the AML/CTF framework, Canada is working toward safeguarding its economic stability and reinforcing its national security.

These measures, which include improved cooperation between financial institutions and law enforcement, and stricter reporting requirements, show a robust commitment to combating illicit activities. Moreover, the focus on strengthening border security and aligning with international standards underscores Canada’s dedication to maintaining the integrity of its borders and contributing to global security efforts. As these amendments take effect, they are likely to play a crucial role in fortifying Canada’s defenses against the ever-evolving landscape of financial crimes and ensuring a safer environment for its citizens and international partners.

Organizations need to comply with the new AML/CTF regulations. Implementing real-time tools to detect suspicious activity, and performing customer due diligence, among other things, can help them accomplish this.

Moody’s offers a wide range of solutions to help organizations fight financial crime and comply with regulations.

Moody’s Maxsight™ Investigations is a platform that harnesses vast amounts of data to automate and centralize investigation workflows, enhance risk management, and create clearer, streamlined insights.

Our Shell Company Indicator can help detect hidden risks related to illicit shell companies that may be used to launder money and enable illegal activities like drug trafficking. 

For more information about how Moody’s can help you with AML/CTF due diligence, and ongoing screening processes, please get in touch – we would love to hear from you.