Bill C-2 Tightens FINTRAC Reporting: More Obligations, Jail Exposure for Non-Compliance, and Much Bigger Fines
Bill C-2 (tabled June 19, 2025) raises the stakes for every organization subject to Canada's Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). The message is simple: more reporting, higher accuracy, and tougher penalties for getting it wrong.
Critical Update: Bill C-2 significantly expands FINTRAC's enforcement powers and introduces criminal penalties for compliance failures, including potential imprisonment and fines up to $20 million for entities.
1) More—and clearer—reporting obligations
Bill C-2 broadens and codifies duties that directly affect your FINTRAC filings, including:
New Requirements
- Mandatory enrollment with FINTRAC for every reporting entity, with ongoing renewal requirements.
- Expanded inspection powers, allowing FINTRAC to examine any person or entity it reasonably believes falls under the Act.
- Explicit accuracy duties: submitting false, misleading, or incomplete information now constitutes an offence on its own.
- Ban on anonymous accounts or accounts for unidentified clients.
These add to the existing requirements to file STRs, LCTRs, LVCTRs, and EFTRs accurately, maintain KYC documentation, train employees, and conduct periodic compliance reviews.
Key takeaway: Every submission to FINTRAC is now treated as a regulated filing with explicit accuracy requirements. Documentation and audit trails have never been more critical.
2) Non-compliance can mean imprisonment
Bill C-2 confirms that certain failures can trigger criminal prosecution, not just administrative action:
Criminal Offenses
- Failing to enroll with FINTRAC.
- Failing to file a required report.
- Opening or maintaining anonymous accounts.
- Making false or misleading statements—even by omission.
In short, gaps once viewed as "administrative" can now result in criminal liability and potential jail time.
Critical warning: Compliance failures that were previously administrative violations can now result in criminal prosecution and imprisonment. The stakes have fundamentally changed.
3) Penalties jump to record highs
The new maximum Administrative Monetary Penalties (AMPs) are dramatic:
New Maximum Penalties
Standard Violations
- • Individuals: up to $4 million (previously $100k)
- • Entities: up to $20 million (previously $500k)
Breaches of Compliance Orders
- • Individuals: $5 million or 3% of income
- • Entities: $30 million or 3% of gross revenue
Compliance failures can now hit the balance sheet hard—especially for larger institutions.
Financial impact: The 40x increase in maximum penalties means that compliance failures can now threaten the financial stability of even large organizations.
What this means right now
Immediate Action Items
- Treat every filing as a regulated submission, not an internal report.
- Maintain documentation that proves enrollment, timely reporting, data accuracy, and audit trail integrity.
- Strengthen "reason-for-no-STR" documentation to show defensible risk-based decisions.
- Eliminate all anonymous or partial-ID onboarding practices.
The takeaway
Bill C-2 raises compliance standards across Canada's AML regime. Accuracy and timeliness are now non-negotiable—and non-compliance can mean multimillion-dollar fines or imprisonment.
To stay ahead, compliance leaders must automate error-checking, submission tracking, and evidence logging.
How Comply+ Can Help
Comply+ automates FINTRAC reporting—including STRs, LCTRs, LVCTRs, and EFTRs—through a secure FINTRAC API integration that:
- Validates data before submission to ensure accuracy
- Ensures on-time delivery of all required reports
- Maintains a full audit trail for your records
- Provides compliance documentation for enrollment requirements
- Automates error-checking and submission tracking
Impact on Different Business Types
Money Services Businesses (MSBs)
- • Mandatory FINTRAC enrollment verification
- • Enhanced accuracy requirements for all reports
- • Criminal liability for false submissions
- • Zero tolerance for anonymous accounts
Financial Institutions
- • Expanded FINTRAC inspection powers
- • Higher accuracy standards for reporting
- • Potential criminal prosecution for failures
- • Documentation requirements for all decisions
Securities Dealers
- • Enhanced compliance monitoring
- • Criminal penalties for non-compliance
- • Mandatory enrollment verification
- • Audit trail requirements
Other Reporting Entities
- • Universal enrollment requirements
- • Enhanced inspection exposure
- • Criminal liability expansion
- • Documentation standards
Final Thoughts
Bill C-2 represents a fundamental shift in Canada's AML enforcement approach. The combination of expanded obligations, criminal penalties, and dramatically increased fines creates a new reality for compliance programs across all sectors.
Organizations must now treat FINTRAC compliance as a mission-critical business function, not just a regulatory checkbox. The cost of non-compliance has never been higher—both financially and personally for compliance officers and executives.
The time to act is now. Review your compliance programs, strengthen your documentation, and consider automation solutions to ensure accuracy and timeliness in this new enforcement environment.
Navigate Bill C-2 with Automated FINTRAC Reporting
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