FINTRAC’s New Penalty Policy Wants You to Learn, Not Just Pay

Key Takeaways

• Behavioral Focus, Not Punishment: FINTRAC’s administrative monetary penalties are designed to promote future compliance, not penalize for the sake of punishment.
• Three-Tier Violation System: Violations are categorized as minor, serious, or very serious, with penalties ranging from $1 to $500,000 depending on the severity and whether the offender is an individual or an entity.
• Two-Step Penalty Calculation: FINTRAC assesses the harm done and the reporting entity’s compliance history to determine penalty amounts in a proportionate and reasonable way.
• Transparency and Due Process: Entities that receive a notice of violation can respond, request a review, or appeal to the Federal Court. FINTRAC is required to provide detailed justifications for its decisions.
• Public Disclosure Requirement: Names of entities, nature of violations, and penalty amounts will be made public in most cases, reinforcing accountability and educating the broader sector.

Deep Dive

FINTRAC doesn’t want to play the villain in your compliance story.

That’s the unmistakable message behind Canada’s financial intelligence agency’s newly updated policy on administrative monetary penalties (AMPs). While penalties are still on the table, some of them quite hefty, the focus is firmly on education, behavioral change, and long-term compliance rather than finger-wagging or financial punishment.

In a refreshingly clear and reasoned approach, FINTRAC’s revised AMP policy outlines how and why the agency determines when to issue a penalty, how much it should be, and what entities can expect throughout the process. The move reflects a growing trend in regulatory circles: using enforcement as a lever to foster trust and accountability, not fear.

Penalties With a Purpose

The AMP program isn’t new. But this iteration of the policy puts a finer point on FINTRAC’s priorities: objectivity, fairness, transparency, and yes, proportionality. The goal? To encourage future compliance with Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) without crushing organizations in the process.

In FINTRAC’s own words, “We consider an administrative monetary penalty to be effective when the penalty amount is proportional to the harm done and prompts a change in behaviour toward future compliance.”

So, if your organization falls short, expect a thorough, but reasoned, assessment that looks at both what went wrong and why. Did you completely miss a requirement or just slip up on part of it? Is this your first offense, or have you been down this road before? The answers matter.

The Art and Science of Calculating Penalties

The process begins when FINTRAC finds reasonable grounds to believe a violation of the Act or regulations has occurred. Violations are grouped into three categories, each with its own penalty range:

• Minor: $1 to $1,000
• Serious: $1 to $100,000
• Very Serious: Up to $100,000 for individuals and up to $500,000 for entities

But those are just starting points. From there, FINTRAC uses a two-step framework:

1. Harm Assessment: How badly did the violation hinder FINTRAC’s mandate or the objectives of the Act? Did you miss a key customer identification step, or fail to file large cash transaction reports altogether?
2. Adjustment for Context: This includes your compliance history and FINTRAC’s non-punitive intent. In other words, if your overall track record is solid and the issue seems to stem from a misunderstanding rather than indifference, the agency may show some leniency.

One thing is clear, the agency is not interested in hammering you just for the sake of it. But don’t mistake empathy for leniency, and serious violations won’t get a pass, even if you say sorry.

What Happens If You Get a Notice

If your organization ends up on the wrong side of FINTRAC’s compliance review, you’ll get a formal notice of violation. It will spell out what went wrong, how much you owe, and your options, which include paying up, pushing back, or asking for a review.

If you do choose to challenge the notice, your case goes to FINTRAC’s Director and CEO, who has the authority to uphold the penalty, reduce it, or toss it altogether. Either way, you’ll get a written decision explaining what was decided and why.

But don’t ghost the agency. If you ignore the notice and take no action within 30 days, the penalty stands, and it becomes an official debt to the Crown, interest and all.

You also have the right to appeal the Director’s decision to the Federal Court of Canada. And if the Director takes more than 90 days to respond to your representation, you can appeal anyway.

Going Public

Here’s where things get even more real. FINTRAC will name and shame, publicly disclosing the names of entities that pay penalties, ignore notices, or lose their appeals. The agency will also share the nature of the violations and, in some cases, the reasoning behind its decisions. The idea is to not just enforce compliance, but educate the broader community about what went wrong and how to avoid the same mistakes.

This isn’t about embarrassment though, it’s about building a culture of compliance. At its core, this policy update signals a shift in tone. FINTRAC isn’t just an enforcer; it wants to be a partner. That means clear expectations, professional communication, and consistency in how penalties are applied.

It also reflects an evolving view of compliance—not really as a game of “gotcha,” but as a shared responsibility to safeguard Canada’s financial system against money laundering, terrorist financing, and sanctions evasion.

For compliance officers, risk managers, and regulated entities, it is more important than ever to do the work, understand the rules, and don’t be afraid to engage with FINTRAC if issues arise. The agency isn’t out to punish, but it is watching. And if you ignore your obligations, you can bet the penalty won’t be the only thing that stings, the public notice might just be the louder wake-up call.

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