Regulations Amending Certain Regulations Made under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act

Enabling act: Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA)


Obligations for the Armoured Car Sector

The transportation of currency and negotiable instruments poses a high inherent money laundering and terrorist financing (ML/TF) risk due to the broad and complex services offered by businesses operating in the armoured car sector. The ability for funds to be collected, pooled into the account of the armoured car company, and wired out to customer accounts makes reconciliation and identification of the origin of funds challenging and allows for a degree of anonymity in transactions, constituting a key ML/TF vulnerability. In response to these identified risks, legislative amendments in Budget Implementation Act 1, 2021, designated businesses in the armoured car sector as reporting entities subject to the PCMLTFA and FINTRAC regulation. Since the compliance program and reporting obligations are prescribed by Regulations, a subsequent amendment to the Regulations is needed to impose these obligations on the armoured car sector. Implementing these requirements will improve the sector’s resilience to misuse for ML/TF, while better situating financial institutions to identify parties involved in suspicious transactions requested by armoured car companies on behalf of their clients.

Increasing Cross-Border Currency Reporting Penalties

A commonly observed money laundering technique is for criminals to move cash or monetary instruments linked to the proceeds of crime between jurisdictions in order to hide their illicit origin. As such, the cross-border movement of funds is recognized in Canada and internationally as a very-high money laundering risk. Under the PCMLTFA, persons or entities must declare any currency or monetary instruments in their possession valued at $10,000 or more when crossing the Canadian border. Failure to declare can result in an administrative monetary penalty, detailed in the Cross-border Currency and Monetary Instruments Reporting Regulations (CCMIRR). These penalties have not been updated since their inception in 2003.  The proposed amendments would increase the amount of the administrative penalties to make them more dissuasive.

Streamlining Requirements for Sending Notices of Violation to Reporting Entities

The current regulations allow FINTRAC to communicate and share compliance related documents though their ePost system. One of the compliance related documents that can be sent through the secure electronic system is the Notice of Violation (NOV). The Regulations require that a copy of the NOV be sent by registered mail or delivered to a reporting entity’s head office or business, even if notice was also sent electronically.  It is proposed that the Regulations be amended to allow NOVs to either be sent to reporting entities electronically, through registered mail, or physical delivery to a head office or business.

Enhancing the MSB Registration Framewor

To legally operate in Canada, money services businesses (MSBs) must register with FINTRAC in accordance with the PCMLTFA, and subsequently renew their registration every two years. The MSB registration framework is important to help prevent illicit actors from controlling MSBs for criminal purposes. The proposed amendments would require MSBs to submit certain additional information that is necessary for FINTRAC to effectively administer the MSB registration framework and help assess potential risks of MSB applicants.

Regulatory cooperation efforts (domestic and international)

Obligations for the Armoured Car Sector

The Department of Finance consulted the United States, the only other known jurisdiction to regulate this sector, to understand their regime, confirm analysis on areas of risk, and the basis upon which the U.S. oversight was developed. This engagement was used to assess any considerations that may or may not be applicable in the Canadian context. The intended outcome of Canada and the U.S. is the same with a slightly differing approach. While the obligations around customer due diligence, record keeping and reporting are consistent with the obligations in the United States, the circumstances in which the obligations are triggered are slightly different. This difference is reflective of some of the unique aspects of the Canadian regime, but is not anticipated to generate undue burden. 

Increasing Cross-Border Currency Reporting Penalties

The Department of Finance held extensive discussions with the Canada Border Services Agency (CBSA) and the Department of Justice during the development of this policy proposal in order to update the penalty structure to meet international standards.

Enhancing MSB Registration and Streamlining Requirements for Sending Notices of Violation to Reporting Entities

The Department of Finance worked with FINTRAC to conceptualize these amendments.

Potential Impact on Canadians, including Businesses

A strengthened anti-money laundering & anti-terrorist financing (AML/ATF) regime helps to combat money laundering and terrorist activity financing threats while protecting Canadians, the integrity of markets and the global financial system, and increases the investment attractiveness and competitiveness of Canada. The proposed amendments would support the security, stability, utility and efficiency of the financial sector framework by strengthening the Regime and combating financial crime. All Canadians would benefit from a stable, efficient, and competitive financial sector that services and drives economic growth.  


Obligations for the Armoured Car Sector

The Department of Finance consulted key AML/ATF Regime partners, including the RCMP and FINTRAC, as well as other government bodies, including the Bank of Canada. The Department of Finance also undertook a comprehensive external consultation process that involved outreach to the Canadian public through the release of a consultation paper in 2018, as a part of the review of the PCMLTFA. The Department consulted international partners and members of the armoured car sector and other adjacent industries, including the banking and ATM service sectors.

Further, interested stakeholders will have an opportunity to review and comment on the proposed regulations as part of the formal regulation-making process when the regulatory proposal is pre-published in the Canada Gazette, Part I.

Departmental contact information

Erin Hunt
Director General, Financial Crimes and Security Division
Financial Sector Policy Branch
Department of Finance Canada
90 Elgin St.
Ottawa, Ontario K1A 0G5

Date the regulatory initiative was first included in the Forward Regulatory Plan

October 2020

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