Anti-Money Laundering

New Anti-Money Laundering Obligations for the Financing and Leasing Sector

 

On March 26, 2025, the Federal Government published the final regulations covering financing and leasing entities under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). 

Who will have to comply with the new obligations? (i.e., is a ‘reporting entity’)

Any person or entity that is engaged in the business of financing or leasing of

  • property, other than real property or immovables, for business purposes;
  • passenger vehicles in Canada; or
  • property, other than real property or immovables, valued at $100,000 or more

Both direct and indirect financing and leasing arrangements are captured in the proposed amendments.

What are the new obligations? 

Financing and leasing entities will be required to establish compliance programs and fulfill record-keeping, due diligence, and transaction-reporting requirements. 

  • Establish and maintain a compliance program 
  • Enhanced KYC requirements: Client identification, ongoing monitoring of accounts, high-risk clients, beneficial ownership, third-party determination
  • Transaction reporting
  • Discrepancy reporting
  • Record keeping  

When will the new obligations enter into force?

The new AML/ATF regulatory amendments covering leasing and finance entities will take effect on April 1, 2025 (previously October 1, 2025). 

In recognition of this accelerated timeline, Finance Canada stated that there will be a transition period until April 1, 2026, during which FINTRAC will “put emphasis on engagement, outreach and guidance activities related to new regulatory obligations for financing and leasing activities in order to foster greater awareness and understanding among new reporting entities. This will include industry consultation to develop guidance such that new reporting entities will be well positioned to implement and mature their compliance programs following the coming into force.”

The provisions regarding discrepancy reporting (i.e., notifying authorities when there is a material discrepancy between information on a company's records and public registry) will come into force on October 1, 2025. It is currently unclear whether these provisions will be included in the transition period.

Amendments relating to (voluntary) information sharing, which will permit private-to-private information sharing under Canada’s AML/ATF legislative framework, will come into force immediately on publication in the Canada Gazette, Part II, on March 26, 2025.

Why has the timeline been accelerated? 

The government stated that these regulatory amendments were identified as key measures to support Canada’s effort to secure the border, including the urgency of disrupting the financial profits laundered by transnational organized crime groups who have become major enablers in accelerating the fentanyl crisis. In response, the government has advanced the coming into force date to April 1, 2025, for the trade-related financial crime, factoring, cheque cashing, and financing and leasing measures included in this Regulatory package. Accelerating the coming into force date from October 1, 2025, will allow the government of Canada to advance its efforts to tackle this urgent crisis six months sooner.

What resources are available? 

With the guidance of our AML Working Group, the CFLA is working to develop resources for the members in the coming weeks and months to help with the transition. This will include webinars and best practices guides. 

FINTRAC will also publish its own sector-specific guidance in the coming months. 

If you have any questions or concerns, please contact Marcel Buerkler, Director of Advocacy & Industry Intelligence. 

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