The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has issued guidance clarifying that businesses engaged in factoring, with or without recourse against the assignor, will be subject to anti-money laundering and anti-terrorist financing obligations as “factors” under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated regulations from 1 April 2025. The guidance outlines core requirements for factors, including implementing a compliance program, meeting know-your-client obligations, reporting required transactions, keeping records, and applying ministerial directives. It also sets expectations for FINTRAC compliance examinations, which may review areas such as the compliance program, transaction reporting, client identification, record keeping, and third party determination, and notes FINTRAC’s authority to impose administrative monetary penalties for non-compliance. FINTRAC indicates that during the first year after the coming-into-force dates it will emphasize engagement, outreach, and guidance activities related to the new obligations, including industry consultation to develop guidance to support new reporting entities in implementing and maturing their compliance programs.
Financial Transactions and Reports Analysis Centre of Canada 2025-03-26
Financial Transactions and Reports Analysis Centre of Canada publishes AML and ATF compliance guidance for factoring businesses effective 1 April 2025
FINTRAC has announced that businesses in factoring will face anti-money laundering and anti-terrorist financing obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act starting 1 April 2025. Requirements include compliance programs, know-your-client obligations, transaction reporting, and record keeping. FINTRAC can impose penalties for non-compliance but will focus on engagement and guidance in the first year to aid new reporting entities.