PCMLTFA (PCMLTFA)
The PCMLTFA is Canada's Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c. 17. It is the statute from which Canadian AML obligations flow, and it is the source of law — FINTRAC administers it and issues guidance, but guidance is not the obligation.
Also called: Proceeds of Crime (Money Laundering) and Terrorist Financing Act
The Act, together with the regulations made under it, creates the Canadian anti-money-laundering regime: it identifies the businesses that are reporting entities, requires them to register where registration applies, and imposes client identification, record-keeping, reporting and compliance-programme obligations. FINTRAC is the financial intelligence unit established under the Act to receive reports, supervise compliance and impose administrative monetary penalties.
Money services businesses are among the reporting entities. A Canadian MSB — and, since 2020, a foreign money services business directing services at persons in Canada — must register with FINTRAC before operating, maintain a compliance programme with an appointed officer, written policies, training and a biennial effectiveness review, and report large cash transactions, electronic funds transfers over the threshold, suspicious transactions and terrorist property.
The distinction between the statute and the regulator is the one that repeatedly matters in practice. FINTRAC guidance is how the regulator reads the law and is extremely useful, but where guidance and the regulations diverge, or where guidance is silent, the obligation is whatever the Act and the regulations say. Enforcement is brought under the Act.
In practice
"FINTRAC requires" is a shorthand that hides the source of the duty. Obligations arise from the PCMLTFA and its regulations; a compliance programme built only from guidance documents will have gaps wherever guidance has not caught up with an amendment — and the regulations have been amended repeatedly, including to bring in foreign MSBs and virtual-currency dealers.
Example
A foreign money services business with no Canadian premises but Canadian customers is a reporting entity under the Act and must register with FINTRAC. Its obligation comes from the statute's scope, not from having a presence a Canadian regulator can visit.
Commonly confused with
| Term | How it differs |
|---|---|
| FINTRAC | FINTRAC is the agency that administers the Act and receives the reports. The PCMLTFA is the law it administers. |
| Retail Payment Activities Act | A separate and much newer Canadian statute covering payment service providers' operational and safeguarding obligations. Registration under one says nothing about the other. |
| Bank Secrecy Act | The US equivalent in function. Different statute, different regulator, different thresholds — and a US programme does not satisfy Canadian obligations. |
See also
- FINTRACCanada’s financial intelligence unit and anti-money-laundering supervisor. Money services businesses must register with FINTRAC before operating in Canada, report prescribed transactions to it and are examined by it — but FINTRAC issues no license and grants no permission to move money.
- Retail Payment Activities ActThe Retail Payment Activities Act is Canada’s framework requiring payment service providers to register with the Bank of Canada and meet operational risk and end-user fund requirements. RPAA registration is separate from, and additional to, FINTRAC registration as a money services business.
- Money Services BusinessA money services business is a category in US federal law under the Bank Secrecy Act, covering seven capacities: dealer in foreign exchange, check casher, issuer or seller of money orders or traveler’s checks, provider of prepaid access, seller of prepaid access, money transmitter, and the US Postal Service.
- Foreign Money Services BusinessA foreign MSB is a money services business located outside the United States that does business wholly or in substantial part within the United States, and must therefore register with FinCEN. Canada uses the same term for a separate status of its own.
- AML ProgramAn AML program is the documented set of controls a regulated firm must maintain to detect and deter money laundering. In the United States it is conventionally described as four pillars: written policies and procedures, a designated compliance officer, staff training, and independent review. Other regimes frame the same components differently.
- Suspicious Activity ReportA suspicious activity report is a confidential filing made to FinCEN when a US financial institution knows, suspects, or has reason to suspect that a transaction above a set dollar floor involves illicit funds, has no apparent lawful purpose, or is designed to evade reporting rules. It is filed without telling the customer.