An illustration shows a hand turning a tap connected to a pipe shaped like a dollar sign
Anti-Money Laundering

New anti-money laundering rules you need to know 

Recent federal updates strengthen Canada’s AML regime to help staunch the flow of dirty money  

An illustration shows a hand turning a tap connected to a pipe shaped like a dollar signNew AML requirements directly apply to CPAs engaged in activities covered by the PCMLTFA and its regulations (Illustration by Dan Parsons)

As reporting entities in Canada’s AML regime, CPAs have long played an important role in the ongoing fight against money laundering. And in the past few years, several developments have occurred on the AML front that are relevant to the accounting profession. It’s important for us to be aware of these developments and the potential obligations that come with them. 

Particularly noteworthy are the new requirements that came into effect on June 1, 2021, under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). These updates strengthen Canada’s AML regime in the areas of compliance, knowing your client, record-keeping and reporting to FINTRAC. As a result, they bring Canada’s regime more in line with international practices.

The AML rules apply only to CPAs engaged in activities covered by the PCMLTFA and its regulations. Generally, this involves carrying out “triggering activities” such as receiving or paying funds or purchasing or selling assets on behalf of a person or entity. That means if your work does not veer into those specific activities, you are not affected. 

However, if your work does veer into those areas, you not only need to know the rules; you need to make sure you comply with the requirements by having an appropriate compliance program in place, among other obligations.

In terms of knowing your client (KYC), the rules set out several types of circumstances in which you need to verify the identity of the persons and entities with whom you’re dealing: 

  • Large cash transactions ($10,000 or more within a 24-hour period)
  • Large virtual currency transactions ($10,000 or more within a 24-hour period)
  • Suspicious transactions, regardless of the amount
  • Receipt of funds of $3,000 or more.

Other KYC obligations include obtaining beneficial ownership information and determining if you are dealing with a politically exposed person or the head of an international organization. Also, to comply with record-keeping rules, there are a variety of records and reports that must be kept on file. 

When it comes to applying the new KYC rules, obtaining beneficial ownership information may be the most difficult. Since Canada doesn’t have a national registry of beneficial ownership, you must obtain that information. That’s not always easy, especially when you’re dealing with complex corporate structures.

Even so, it’s worth noting that corporate transparency requirements are evolving both at home and abroad. Recent legislative changes by the federal government and certain provinces (B.C., Saskatchewan, Manitoba, Quebec, Nova Scotia, Prince Edward Island; and with changes pending in New Brunswick) mean new beneficial ownership requirements. And the 2021 federal budget proposed to provide $2.1 million over two years toward the implementation of a publicly accessible corporate beneficial ownership registry by 2025.

As far as reporting to FINTRAC is concerned, CPAs affected by the new rules must now submit a Large Virtual Currency Transaction Report when required. That is in addition to the other types of reports that were already required to be filed (such as the Suspicious Transaction Report). 

Important as they are, the new PCMLTFA regulations are not the only updates we need to keep in mind. Just over two years ago, a change was made to the Criminal Code that added the notion of “recklessness” to the offence of money laundering. Essentially, this lowers the threshold to be convicted of an offence when moving money on behalf of another person. If you are aware there is a risk that the money might have come from the proceeds of crime and proceed to move the money, you may be found to have committed an offence. Previously, you had to know or believe that the money came from the proceeds of crime for it to be classified as an offence. 

Taken together, these most recent changes to the requirements represent a substantial increase in AML obligations for CPAs carrying out triggering activities. As the AML regulator, FINTRAC has published guidance on its site specifically applicable to PCMLTFA requirements for accountants and accounting firms. And CPA Canada has a number of resources on its site, including a series of articles on AML developments. It will also be publishing an AML guide in the next few months. 

So, take the time to learn the new rules and how to apply them. You’ll be doing your part to protect the public interest and staunch the flow of dirty money.


CPA Canada has a wealth of resources on anti-money laundering rules and developments, including the new “know your client” requirements and new AML/ATF record-keeping and FINTRAC reporting rules.