Webinar recording – Sanctions evasion, property reporting and the fight against illegal fentanyl financing
From: Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
On March 24, 2025, FINTRAC hosted the "Following the Money: Sanctions Evasion, Property Reporting and the Fight Against Illegal Fentanyl Financing” webinar.
Video
Video length: 26:23 minutes
Catalogue number: FD4-47/2025E-MP4
ISBN: 978-0-660-77104-5
Descriptive transcript of the video “Webinar recording – Sanctions evasion, property reporting and the fight against illegal fentanyl financing”
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Good afternoon, and thank you for joining us today. My name is Julie Leclerc. I’m an executive manager in FINTRAC’s Supervision sector. I’m pleased to welcome you to the FINTRAC webinar: Following the Money: Sanctions Evasion, Property Reporting, and the Fight Against Illegal Fentanyl Financing. This session will be recorded, and the recording will be made available to participants after the session. Today’s session will cover important topics, including your compliance obligations and reporting requirements relating to sanctions evasions and sanctioned property, and FINTRAC’s new report called the Listed Persons and Entities Property Report, or the LPEPR. Before we begin, I’d like to take a moment to acknowledge that FINTRAC operates on the traditional, unceded territories of Indigenous Peoples across Canada. We recognize and respect their ongoing relationship with this land. |
Text on screen: Following the Money: Sanctions Evasion, Property Reporting and the Fight Against Illegal Fentanyl Financing FINTRAC information session for reporting entities |
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The goal of today’s session is to give you a clear understanding of the reporting obligations relating to sanctions with the coming into force of the Listed Person or Entity Property Reporting requirements on March 2, 2025 and its next phase which will be on October 1, 2025. I will be:
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Text on screen: Agenda:
Animation: Each bullet point shows up individually. |
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Text on screen: Canada’s sanctions regime |
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So, in terms of Canada’s sanction regime: A sanctions evasion offence means an offence arising from the contravention of a restriction or prohibition established by an order or regulation made under the United Nations Act, the Special Economic Measures Act, or the Justice for Victims of Corrupt Foreign Officials Act. |
Text on screen: Sanctions evasion offence Animation: “What is a sanctions evasion offence?” appears followed by its definition Text on screen: What is a sanctions evasion offence? A sanctions evasion offence means an offence arising from the contravention of a restriction or prohibition established by an order or regulation made under the United Nations Act, the Special Economic Measures Act, or the Justice for Victims of Corrupt Foreign Officials Act. |
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Like many other countries, Canada imposes sanctions ondesignated countries, specific individuals, and entities. Sanctions have become an increasingly important element in Canada’s foreign policy toolkit, and plays a crucial role in helping maintain and restore international peace and security, combatting corruption, and promoting respect for human rights. |
Text on screen: Imposing sanctions Animation: the 3 imposed sanctions appear on the screen. 1 by one they turn a different colour as the speaker speaks about each one. Text on screen : Canada imposes sanction on
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Global Affairs Canada is responsible for the administration of Canada’s sanctions Under the United Nations Act, the Special Economic Measures Act, also known as SEMA, and the Justice for Victims of Corrupt Foreign Officials Act. The RCMP and the Canada Border Services Agency enforce these statutes and associated regulations. FINTRAC supports and ensures compliance with reporting requirements under the PCMLTFA and associated regulations (which includes reporting suspicious transactions where there are reasonable grounds to suspect the transaction is related to the commission or the attempted commission of a sanctions evasion offence, and, since March 2, 2025, sanctioned property); FINTRAC develops strategic intelligence products, and discloses financial intelligence in support of law enforcement and the implementation of Canada’s sanctions regime. Sanctions are set to help safeguard financial systems and reduce the risks of international threats to Canada and its allies. It is the responsibility of all persons in Canada and Canadians abroad to comply with Canada’s sanctions regime. |
Text on screen: Sanctions regime partners Animation: 3 banners with the partners appear on the screen Text on screen: Global affairs Canada
RCMP & CBSA
FINTRAC
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Now who must comply, Canadian sanctions place restrictions on the activities permissible between persons in Canada, or Canadians outside Canada and foreign states, individuals, or entities. They can target specific countries, organizations, or individuals, and can encompass a variety of measures, including restricting or prohibiting trade, financial transactions or other economic activity between Canada and the target state or its enablers. Persons in Canada and Canadians abroad, including Canadian financial institutions and businesses, are responsible for complying with sanctions and are obligated to continuously monitor their accounts and transactions for assets linked to listed persons. In instances where those assets are identified, they are to be effectively frozen as a result of the dealings ban prohibitions, and their existence disclosed to the RCMP or CSIS, and/or a designated regulatory body, such as FINTRAC. |
Text on screen: Who must comply Animation: 1 at a time, clockwise the ones that must comply appears Text on screen: Persons in Canada, Canadians Abroad, Financial Institutions, Businesses
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Canada’s 2023 Fall Economic Statement announced the government’s commitment to introduce legislative measures to combat sanctions evasion. |
Text on screen: Important changes |
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These measures allow FINTRAC to use its expertise, empowered by the PCMLTFA, to develop intelligence products, and, where appropriate, disclose its findings to law enforcement partners, in an effort to support law enforcement and Canada’s sanction-based asset seizure and forfeiture regime. As of June 2024, FINTRAC has the authority to disclose financial intelligence related to sanctions evasion to the appropriate law enforcement agencies. As of August 19, 2024, in addition to the longstanding obligation to report transactions where there are reasonable grounds to suspect that they are related to a money laundering or terrorist activity financing offence, reporting entities must report transactions suspected to be related to sanctions evasion to FINTRAC. These transactions are required to be reported using FINTRAC’s suspicious transaction report form. When a reporting entity reaches RGS that a transaction is linked to a sanctions evasion offence, this transaction may be related to the prohibitions in sanctions related to the provision of financial services but may also link to other prohibitions linked to trade (e.g., Russia oil price cap). FINTRAC has published a special bulletin on financial activity associated with sanctions evasion as well as guidance on reporting suspected sanctions evasion for reporting entities to comply with the new reporting requirement. These include characteristics of transactions related to sanctions evasion that can be leveraged. |
Text on screen: Important dates related to sanctions evasion Animation: 2 important dates appear (June 2024 & August 2024) Text on screen:
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As a result of legislative and regulatory changes, the Terrorist Property Report will be enhanced to include the requirement for REs to report to FINTRAC when they must disclose to CSIS or the RCMP on sanctioned property. The name of the report has changed from Terrorist Property Report (TPR) to the Listed Person or Entity Property Report (LPEPR). The reporting obligation has coming into force over two dates.
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Text on screen: Important dates related to sanctioned property Animation: 2 other important dates appear (March 2, 2024 & Oct 1, 2024) Text on screen:
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The original terrorist property reporting requirements set out to track and report on the movements of 'Terrorist property' that we need to monitor for the safety and security of our financial ecosystem. With the new listed person or entity property reporting requirements, the TPR has evolved into the “Listed Person or Entity Property Report”. The LPEPR, as we call it, has a broader range of abilities, including now able to detect property not only owned or controlled by 'Terrorist' but also by 'Sanctioned persons or entities' Since March 2, 2025, reporting entities will be required to report property owned or controlled by persons and entities under an order or regulation made under the United Nations Act. This is in addition to the long-standing obligation with respect to property owned or controlled by a terrorist group as defined in the Criminal Code (subsection 83.01(1)), or a listed person as defined in the Regulations Implementing the United Nations Resolution on the Suppression of Terrorism (section 1). As of October 1, 2025, reporting entities will be required to report property owned or controlled by persons and entities under an order or regulation made under the Special Economic Measures Act, and Justice for Victims of Corrupt Foreign Officials Act. On February 28, 2025, FINTRAC published the updated LPEPR guidance and reporting form. The reporting form remains a fillable PDF to be submitted by Fax or by mail. |
Text on screen: The terrorist property report becomes the LPEPR Animation: An icon on the left pops up follow by 3 blocks with their respective icons in an upward motion. The last item that shoes up on the right side of the screen it the Listed Person or Entity Property Report Text on screen: Expanded definition of Listed Person or Entity Reporting entities required to report property owned or controlled by persons and entities under an order or regulation made under the United Nations Act. Reporting entities required to report property owned or controlled by persons and entities under an order or regulation made under the SEMA and Justice for Victims of Corrupt Foreign Officials Act. |
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As shown on the timeline slide, the reason for the two coming into force dates is that the reporting requirement will change twice. As part of these changes, we are introducing a new definition for “Listed Person or entity” in the PMCLTF STR regulations, which I will detail here to help visualize the reason for the two coming into force dates. On March 2 2025, the definition of listed person or entity was introduced, replacing the Listed Person definition, to include
On October 1, 2025, the definition will change again to include
The introduction of this new term and definition is very important for REs to be aware of. I do want to emphasize that while the term is listed person or entity, a Terrorist Group as defined in the Criminal Code may be a listed entity by Public Safety Canada but could include cases where a reporting entity comes across information that leads them to determine that a client is associated with or is part of a terrorist group (e.g. media, publicly available information, or other official lists (OFAC, EU Lists)). In these cases, the terrorist group may not be listed but it does fall under the definition of a listed person or entity. terrorist group means (a) an entity that has as one of its purposes or activities facilitating or carrying out any terrorist activity, or (b) a listed entity, and includes an association of such entities |
Text on screen: Definition of Listed Person or Entity Animation: A first box appear on the right with the first date of CIF followed with 3 boxes of definitions This follows with a the second CIF date with the 2 last definitions Text on screen:
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Now as we look to compliance expectations for reporting entities, REs may have previously treated their obligations under the PCMLTFA and associated regulations as separate from their obligations to comply with sanctions, but the legislative and regulatory changes have introduced opportunities that a more holistic approach be taken. As a result of the requirement to include suspicions of a sanctions Evasion Offence, FINTRAC has published guidance on reporting on sanctions evasion and updated the suspicious transaction report to include sanction evasion as a suspicion type. In preparation for the new LPEPR reporting requirements, FINTRAC will publish updated guidance and reporting form for the LPEPR to assist reporting entities in complying with their obligations. |
Text on screen: Compliance expectations for reporting entities |
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Now looking at the compliance officer obligation, Appointed Compliance Officers should have knowledge of sanctions evasion risks and sanctions evasion trends and typologies and are responsible for updating the compliance program to integrate sanctions evasion and sanctioned property reporting obligations. |
Text on screen: Compliance officer Animation: 3 blocks (blue, yellow and grey) forming a triangle appear on the screen. This follows with the 3 Compliance officers appearing by the blocks. Text on screen: Risks, Trends & Typologies & Compliance program |
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For the policies and procedures, REs must update their policies and procedures to capture the expansion of the reporting requirement for Listed Person or Entity Property Report and to consider the characteristics of a sanctions evasion offence for STR reporting. Policies and procedures should cover how the reporting entity will become aware of sanctions. Reporting entities will need to ensure their screening and monitoring procedure capture the sanctions lists that apply The Consolidated Canadian Autonomous Sanctions List is available to search names. This list includes individuals and entities subject to specific sanctions regulations made under SEMA, and the Justice for Victims of Corrupt Foreign Officials Act. The United Nations Security Council Consolidated List provides a list of entities subject to measures imposed by the United Nations Security Council under the United Nations Act. FINTRAC’s guidance includes references to lists of individuals and entities subject to sanctions. Still, sanctions are subject to change without notice; therefore, reporting entities are encouraged to consult the Global Affairs Canada website for the most up to date information and regulations. |
Text on screen: Policies and procedures Animation: 3 hexagons with a lock, key and an unlocked key respectively appear Following that, 3 texts appear under the hexagons. Text on screen:
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Now moving on to the training program.Reporting Entities’ Training Program should identify characteristics of a sanctions evasion offence and how their business or profession could be vulnerable. Additional training may be needed for employees whose roles and responsibilities are related to detecting and deterring ML, TF and sanctions evasion offences, and when dealing with potentially suspicious activities or transactions. The training program and plan should be tailored to the business's size, structure and complexity, and its degree of exposure to ML, TF and sanctions evasion risks. |
Text on screen: Compliance training program Animation: A circular icon is on the screen followed by 3 boxes attached to the circle with trainings Text on screen:
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Now for the risk assessment.Reporting entities must continue to assess their risks by considering the prescribed factors. FINTRAC’s risk assessment guidance already included expectations for reporting entities to consider high risk countries, including those subject to economic sanctions, embargoes or other measures. |
Text on screen: Risk assessment Animation: A magnifying glass is on the screen and it follows with 5 risk assessments Text on screen:
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There are some common observed indicators to look out for when assessing if a transaction is at risk of attempting to evade sanctions. This can include, but is not limited to, the use of intermediary jurisdictions; the evasion of import and export controls; the use of opaque corporate structures; non resident banking; the use of proxies and enablers and the use of virtual currencies or other financial channels. |
Text on screen: Risk assessment – Characteristics Animation: 6 characteristics examples of risk assessment are on the screen Text on screen:
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As part of the process of reporting suspicious transactions related to the commission of a sanctions evasion offence, businesses must actively monitor and identify transactions and risks related to sanctions evasion. Transactions where there are reasonable grounds to suspectthat an ML, TF or sanctions evasion offence has occurred must be reported to FINTRAC. These transactions are required to be reported using FINTRAC’s suspicious transaction report form. Reasonable grounds to suspect is the required threshold to submit a STR to FINTRAC and is a step above simple suspicion, meaning that there is a possibility that an ML, TF or sanctions evasion offence has occurred. You do not have to verify the sanctions evasion indicators that led to your suspicion, nor do you have to prove that a ML, TF or sanctions evasion offence has occurred in order to reach this threshold. Your suspicion must be reasonable and therefore, not biased or prejudiced. Reaching this threshold means that you considered: the facts the context the money laundering or terrorist activity financing indicators * the sanctions evasion characteristics related to a financial transaction These suspicious transaction reports are critical to FINTRAC's ability to develop and disseminate financial intelligence. |
Text on screen: Transaction monitoring and reporting Animation: 5 hexagons appear on the screen with 5 meaning of reaching the threshold. Text on screen:
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Now looking at ministerial directives. Reporting entities must also comply with Ministerial Directives Under Part 1.1 of the PCMLTFA, the Minister of Finance may:
These authorities allow the Minister of Finance to take steps to protect the integrity and reputation of Canada’s financial system from foreign jurisdictions and foreign entities that are considered to present high risks for facilitating ML, TF, sanctions evasion or financing of threats to the security of Canada. They include countermeasures for reporting entities that enhance or add to existing obligations. Currently, Ministerial Directives are in force with respect to three jurisdictions also subject to Canadian sanctions: the Democratic People’s Republic of Korea, the Islamic Republic of Iran and Russia. |
Text on screen: Ministerial Directives Animation: On the left we have the 3 ministerial directives & on the right, a cover of the ministerial directives shows Text on screen:
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Now how to report to FINTRAC. When reporting a financial transaction to FINTRAC, all information that helps identify the transaction as suspected sanctions evasion activity should be included. |
Text on screen: How to report to FINTRAC |
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This includes detailing information related to the products and/or services involved in the suspicious transactions, including theaccounts and addresses involved, particularly if they are linked to jurisdictions associated with the facilitation of financial flows from sanctioned jurisdictions. Reporting entities should continue to include any information on the ownership, control, and structure of entities involved in transactions, such as listing the owners, directors, officers and those with signing authority, as well as any information about related persons or entities involved, where possible. Reporting entities should also include all available identifying information and descriptions of any legal entities or arrangements involved or associated with the financial transactions. FINTRAC will assess compliance through supervisory assessment activities e.g. case file review related to reporting requirement and identification of unreported STRs. |
Text on screen: Reporting to FINTRAC Animation: A clip board is on the screen with 4 information to include when reporting to FINTRAC/CANAFE Text on screen:
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STR sanctions evasion considerations If a transaction is suspected of being related to both a ML, TF offence, and a sanctions evasion offence, ne report containing details and all required information of each of the suspected offences should be submitted. FINTRAC has added sanctions evasion values to the STR report. Under “suspicion type” you may now select:
In cases where the primary suspicion type is sanctions evasion, businesses will have two options to report: Businesses with system capability to select the new sanctions option can select the primary suspicion type from the drop down list. Businesses with no system capability at this time to select new sanctions options, must select ‘money laundering’ value from the drop down list and add #SANCTIONS as the grounds for suspicion in the description of suspicious activity section (this was previously referred to as the Part G in Generation 1 reports). FINTRAC has already received some STRs related to sanctions evasion so thank you for that. |
Text on screen: How to report sanctions evasion related transactions Text on screen: Reporting entities must report suspected sanctions evasion transactions in one report if:
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As the Listed Person or Entity Property Report is replacing the Terrorist Property report, it is to be submitted the same way, either by fax, which would be preferable so long as the reporting entity has electronic capabilities, or bymail. |
Text on screen: How to report LPEPR Animation: A clip board is on the screen, the LPEPR report shows up the left side of the screen followed by 2 ways to send the report appears on the clipboard. Text on screen:
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Now on The Fight Against Illegal Fentanyl Financing The Prime Minister issued the Directive on Transnational Crime and Border Security. This Directive acknowledged the urgent threats that the international and domestic drug trades, including the trafficking of fentanyl, pose to the livelihoods and safety of Canadians, as well as the role that organized crime groups and money laundering play in driving these threats. These changes will strengthen border security by giving the CBSA the authority to detect, deter, and disrupt illicit financial activities conducted through trade. By requiring traders to declare that their imported or exported goods are not linked to money laundering, terrorist financing, or sanctions evasion, the CBSA will be better equipped to identify and prevent financial crimes that exploit trade channels. The illegal production and distribution of synthetic opioids, particularly fentanyl, poses a serious security and public health threat by exacerbating the opioid overdose crisis. Criminals are laundering their illicit funds from opioid trafficking though cash smurfing, trade-based money laundering, flow-through account activity and the use of underground banking. Traffickers also use nominees to launder their illegal funds and to conceal the beneficial ownership. The ability to compel supporting documents and enforce penalties for non-compliance will enhance regulatory oversight, closing loopholes that previously allowed criminals to move illicit funds across the Canada-U.S. border undetected. These measures will strengthen cross-border enforcement, combat trade-based money laundering, and improve overall financial and national security. |
Text on screen: Fight against illegal fentanyl financing Animation: 2 icons appear, 1 of 5 characters putting their hand together on the left and on the right an image of a fentanyl trade arrest |
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FINTRAC continues to issue guidance to reporting entities. |
Text on screen: FINTRAC guidance and resources |
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We’ve published guidance on reporting suspected sanctions evasions and on the LPEPR. We also published the new LPEPR form. FINTRAC’s strategic intelligence analysis developed a Special Bulletin that has been published on financial activity associated with suspected sanctions evasion. |
Text on screen: Resources and support Animation: A box appears and it follows the published guidances followed by the strategic intelligence products Text on screen: Guidance published on the FINTRAC website
Strategic intelligence products
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And now in terms of key takeawaysA sanctions evasion offence occurs when someone violates a restriction or prohibition under the United Nations Act, the Special Economic Measures Act, or the Justice for Victims of Corrupt Foreign Officials Act. Since August 19, 2024, reporting entities must report STRs related to suspected sanctions evasion offences. As of March 2, 2025, reporting entities must report Listed Person or Entity Property Reports (United Nations Act). As of October 1, 2025, reporting entities must report Listed Person or Entity Property Reports (Special Economic Measures Act, Justice for Victims of Corrupt Foreign Officials Act). Now this concludes our information session, I hope that the information was useful. You will be receiving a short survey if you could take a few minutes to fill it out. Thank you very much and wishing everyone a wonderful afternoon. |
Text on screen: Key takeaways Animation: 4 bullets appear with the key takeaways from this presentation Text on screen: A sanctions evasion offence occurs when someone violates a restriction or prohibition under the United Nations Act, the Special Economic Measures Act, or the Justice for Victims of Corrupt Foreign Officials Act. Since August 19, 2024, reporting entities must report STRs related to suspected sanctions evasion offences. Since March 2, 2025, reporting entities must report Listed Person or Entity Property Reports (United Nations Act). As of October 1, 2025, reporting entities must report Listed Person or Entity Property Reports (Special Economic Measures Act, Justice for Victims of Corrupt Foreign Officials Act). |
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