Understanding FINTRAC’s Updated Administrative Monetary Penalties Policy: A Comprehensive Guide for Compliance Professionals
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) sent out a notice on August 06, 2025 about its revised Administrative Monetary Penalties (AMP) policy under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. These changes reflect FINTRAC’s continued commitment to fostering compliance, rather than simply imposing punitive measures. The updated AMP policy’s purpose, principles, penalty framework, and procedural steps equips compliance professionals with the insights needed to minimize risk and promote a culture of proactive adherence.
The Purpose Behind FINTRAC’s AMP Program
At its core, FINTRAC’s Administrative Monetary Penalties program is designed to encourage future compliance with Canada’s AML/ATF regime and to promote behaviour change among reporting entities. By offering a measured, proportionate response to non-compliance, FINTRAC balances regulatory enforcement with education and collaboration. Rather than seeking to punish infractions, the AMP framework underscores the Agency’s goal of safeguarding the integrity of Canada’s financial system while supporting reporting entities in meeting their obligations.
Guiding Principles: Fairness, Transparency, Consistency
The updated policy articulates six foundational principles that guide FINTRAC officers throughout the AMP process:
Objectivity
Officers make fact-based assessments, ensuring decisions derive solely from the circumstances of each case. This objectivity underpins complete fairness, free from external bias.Reasonableness
Professional judgment is applied to weigh all relevant factors—such as the entity’s size, the nature of its business, and the context of non-compliance—before proposing a penalty.Transparency
At every stage, FINTRAC communicates its expectations and findings clearly. Reporting entities receive detailed explanations of any identified deficiencies and the rationale behind proposed penalties.Fairness
Entities retain the right to understand FINTRAC’s case and to submit written representations. This two-way dialogue ensures that all perspectives inform the final decision.Consistency
Similar violations by comparable entities result in similar outcomes. Established policies and procedures enable FINTRAC to treat like cases alike, fostering predictability.Documentation
FINTRAC meticulously records the facts, analyses, and decisions underlying each AMP. Robust documentation supports internal audits and public accountability.
How FINTRAC Assesses and Addresses Non-Compliance
When conducting routine compliance assessments, FINTRAC examines reporting entities’ client identification procedures, record-keeping practices, and transaction-reporting activities. Each identified instance of non-compliance is evaluated for its extent (partial vs. complete failure) and its root cause (e.g., inadequate policies, system gaps, or human error). FINTRAC considers both the potential harm—the degree to which a breach could undermine the Act’s objectives—and the resulting harm, such as unreported cash transactions stemming from faulty procedures.
Depending on assessment findings, FINTRAC may:
Take no further action for minor or isolated infractions.
Schedule follow-up assessments to verify corrective measures.
Issue an AMP to prompt meaningful change.
Refer serious cases to law enforcement for investigation and prosecution.
Categorizing Violations and Penalty Ranges
Under the Administrative Monetary Penalty Regulations, violations are classified by their degree of importance:
Minor Violations (e.g., late submission of a single report): penalties range from $1 to $1,000 per violation.
Serious Violations (e.g., repeated failure to identify clients): penalties range from $1 to $100,000 per violation.
Very Serious Violations (e.g., systemic policy failures leading to large-scale unreported transactions): for individuals, $1 to $100,000; for entities, $1 to $500,000 per violation.
Because penalties accrue per violation, a series of breaches can result in a cumulative fine that exceeds these maximums.
Calculating the Right Penalty Amount
FINTRAC applies a two-step methodology to determine the final AMP:
Harm-Done Assessment
The Agency gauges how significantly the violation obstructs the Act’s objectives or impairs FINTRAC’s mandate. Complete failures to meet statutory requirements typically attract the maximum base penalty, while partial lapses are scaled accordingly. For example, if a business omits large cash transaction reporting, the “resulting harm” includes both the initial procedural defect and the downstream unreported transactions.Non-Punitive Adjustments
Recognizing that AMPs aim to encourage compliance, FINTRAC may reduce base penalties for entities with strong compliance histories or first-time, low-impact infractions. Conversely, in egregious cases, the Agency retains discretion to forgo reductions and impose full penalties.
Through this balanced approach, penalties remain proportional, constructive, and behavior-changing.
The AMP Process: From Notice to Resolution
Below is an overview of the typical AMP process timeline:
Notice of Violation
Within two years of discovering non-compliance, FINTRAC issues a detailed notice outlining:The entity’s legal name and address
Specific contraventions and relevant legislative provisions
The calculated penalty amount and underlying rationale
Instructions for payment or written representations
Information on the right to make submissions to FINTRAC’s Director and CEO within 30 days.
Response Window (30 days)
Entities may either pay the proposed penalty (ending the process) or submit written representations challenging aspects of the notice.Director & CEO Review
If representations are filed, the Director and CEO have up to 90 days to consider arguments and issue a Notice of Decision, which may uphold or reduce the penalty.Right of Appeal
Should the entity disagree with the decision, it has 30 days to appeal to the Federal Court of Canada. If FINTRAC fails to deliver a decision within 90 days, the entity may proceed directly to court.Public Disclosure
In the interest of transparency, FINTRAC publishes details of paid penalties, upheld notices, and compliance agreements on its website. This public record educates the sector and reinforces deterrence.
Best Practices to Minimize AMP Risk
To proactively guard against administrative penalties, reporting entities should:
Conduct Regular Risk Assessments: Update your AML/ATF risk profile at least annually and whenever product offerings change.
Review Policies & Procedures: Ensure client-identification, record-keeping, and transaction-reporting protocols align with the latest regulatory standards.
Invest in Ongoing Training: Provide targeted AML/ATF training quarterly, emphasizing recent policy updates and red-flag indicators.
Perform Internal Audits: Schedule mock inspections to detect and remediate gaps before FINTRAC engages.
Maintain Meticulous Records: Retain all compliance documentation for a minimum of five years, organized and easily retrievable.
FINTRAC’s updated Administrative Monetary Penalties policy represents a shift toward a more collaborative, educational enforcement model—one that values clear communication, proportional responses, and constructive engagement. By familiarizing yourself with the policy’s principles, penalty framework, and procedural steps, you can strengthen your compliance program, reduce reputational and financial risks, and contribute to the integrity of Canada’s anti-money laundering and anti-terrorist financing regime.
For tailored guidance or a comprehensive compliance readiness assessment, contact Platino Consulting today. Let us help you navigate FINTRAC’s evolving landscape and ensure your organization remains on the path to full compliance.
