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Financing or leasing entities : FINTRAC's requirements

Effective April 1, 2025

From: Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)

Determine if FINTRAC's anti-money laundering and anti-terrorist financing requirements apply to your business and understand what you must do to comply.

In the first year following the coming into force of regulations, FINTRAC will put emphasis on engagement, outreach and guidance activities related to new regulatory obligations in order to foster greater awareness and understanding amongst new reporting entities.

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Who must comply

Financing or leasing entities must fulfill obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Act) and associated Regulations.

A financing or leasing entity is a person or entity that is engaged in the business of financing or leasing.

A financing or leasing entity is subject to the Act and associated Regulations when they engage in the financing or leasing of:

Legal references

Summary of requirements for financing or leasing entities

Financing or leasing entities must fulfill the following requirements under the Act and associated Regulations.

Implement a compliance program

Financing or leasing entities must implement a compliance program. A strong compliance program will form the basis of meeting your regulatory requirements.

Know your client

Financing or leasing entities must verify the identity of persons and entities for certain activities and transactions, and carry out other customer due diligence activities as described below:


When to verify the identity of persons and entities

Financing or leasing entities must verify the identity of persons and entities for certain activities and transactions.


Methods to verify the identity of persons and entities

Financing or leasing entities must verify the identity of persons and entities using the methods prescribed by the Act and associated Regulations.


Business relationship requirements

Financing or leasing entities enter into a business relationship when they enter into a financing or leasing arrangement with the client for:

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

Financing or leasing entities also enter into a business relationship with a client the second time they are required to verify the identity of that client.


Ongoing monitoring requirements

Financing or leasing entities have ongoing monitoring requirements when they enter into a business relationship with a client.


Beneficial ownership requirements

Financing or leasing entities must obtain and take reasonable measures to confirm the accuracy of beneficial ownership information for entities.


Third party determination requirements

Financing or leasing entities have third party determination requirements when they are required to submit certain reports and keep certain records.


Politically exposed persons and heads of international organizations requirements

Financing or leasing entities are required to take reasonable measures to make politically exposed persons and heads of international organizations determinations for certain activities or transactions. If a financing or leasing entity determines that a person is a politically exposed person or the head of an international organization then they have additional related requirements.

Report transactions

Financing or leasing entities must submit the following reports to FINTRAC:


Listed Person or Entity Property Reports


Large Cash Transaction Reports


Large Virtual Currency Transaction Reports


24-hour rule

Financing or leasing entities have 24-hour rule requirements for Large Cash Transaction Reports and Large Virtual Currency Transaction Reports.

Keep records

Financing or leasing entities must keep certain records, including records related to transactions and client identification.

Apply ministerial directives

Ministerial directive requirements apply to all reporting entity sectors.

FINTRAC assessment expectations

To ensure compliance with the Act and associated Regulations, FINTRAC is authorized to conduct compliance examinations to assess whether you are meeting your requirements under the law.

Areas of review can include:

To learn more about FINTRAC assessments, review the FINTRAC assessment manual.

Penalties for non-compliance

FINTRAC has the legislative authority to issue administrative monetary penalties to reporting entities that are found to be non-compliant with the Act and associated Regulations. For more information, see Penalties for non-compliance.

Glossary

The FINTRAC Guidance glossary includes terminology defined in the Act and associated Regulations, as well as terms used throughout the guidance. For more information, see FINTRAC's Guidance Glossary.

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