Canada's 2026 FATF Mutual Evaluation: What FINTRAC and Finance Canada Said About Supervision, Penalties and Next Steps

The Financial Action Task Force (FATF) and the Asia/Pacific Group on Money Laundering (APG) have published their Mutual Evaluation Report of Canada. On September 29, 2026, FINTRAC and the Minister of Finance each issued a statement in response. The Minister's statement says the report upgraded Canada to "the best outcome category available," and is an improvement on Canada's last evaluation in 2016.

FINTRAC's statement also covers its supervision of businesses subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. FINTRAC says it has finalized a new Supervision Framework, undertook a record number of compliance assessment activities over the past year, and will receive a 60% increase in supervisory-related resources over the next two years. ACAMS reported the statement under the headline "FINTRAC Highlights FATF Evaluation, Record Penalties".

What the Statements Say the Evaluation Found

The Minister's statement describes the report as "an independent peer review assessment of the totality of Canada's anti-money laundering, anti-terrorist financing, and counter proliferation financing (AML/ATF/CPF) system." It names four areas of strong performance: risk assessment, domestic and international cooperation, the use of financial intelligence, and efforts to combat terrorist financing.

The same statement says the report "identifies opportunities to build on Canada's existing advantages to strengthen Canada's regulatory supervision, beneficial ownership transparency, investigations, prosecutions, and asset recovery processes." The Minister said the government "will review and action the recommendations."

FINTRAC's statement attributes these findings to the evaluation:

• FINTRAC is "substantially effective in generating high-quality financial intelligence that is valued by law enforcement and used in 94% of their investigations into money laundering and criminal possession offences."
• FINTRAC's strategic intelligence products are "a significant input to Canada's understanding of money laundering and terrorist financing risks."
• On supervision, FINTRAC "has a strong capability in terms of research and analytics and has a good understanding of the sectoral money laundering and terrorist financing vulnerabilities."

What FINTRAC Says It Is Changing in Supervision

FINTRAC states it has "taken extensive action to strengthen its supervision of businesses subject to the Act consistent with the recommendations in the FATF evaluation." The statement lists these measures and figures:

FINTRAC also says it will work with the Department of Finance Canada and its regime partners "to prepare for the regular follow-up review process in the coming years."

The Penalty Framework That Now Applies

FINTRAC's page on the amended penalties framework states that the Strengthening Canada's Immigration System and Borders Act (Bill C-12) received Royal Assent on March 26, 2026. For violations that occur after that date, FINTRAC will have the authority to:

• define prescribed violations and compliance order violations subject to penalties;
• apply increased maximum penalty amounts, up to 40 times current limits;
• consider ability to pay as part of the criteria for determining a penalty amount;
• require mandatory compliance agreements for prescribed violations;
• introduce compliance orders as an additional enforcement tool.

The same page states that FINTRAC will continue to use the existing penalties policy, amounts and processes for violations that occurred entirely before March 26, 2026. We covered the framework in our Bill C-12 penalties article and the compliance agreement process in what happens after a FINTRAC examination.

Other Measures in the Minister's Statement

• Financial Crimes Agency: to "enhance Canada's capacity to combat serious and complex financial crime and improve enforcement outcomes."
• Money services businesses: targeted action on criminal abuse of money services businesses, including banning crypto ATMs.
• Bill C-12: passed earlier this year, with "comprehensive reforms to strengthen AML/ATF supervision, compliance and enforcement."
• Extortion: dedicated financial intelligence liaison officers working with local police, a Countering Extortion Partnership with financial institutions, government and law enforcement, and published strategic intelligence on how criminals move and hide extortion money.

Six Questions From the Compliance Program Sections

Section 9.6 of the Act and section 156 of the Regulations set out the compliance program that every business subject to the Act must establish and implement. Subsection 9.6(1.1) of the Act requires that program to be "reasonably designed, risk-based and effective."

1. Is a named person responsible for implementing the program? Paragraph 156(1)(a) of the Regulations.
2. Are your written policies and procedures kept up to date, approved by a senior officer, and applied? Paragraph 156(1)(b) requires "developing and applying" them.
3. Does your documented risk assessment cover clients and business relationships, products, services and delivery channels, and geographic location? Paragraph 156(1)(c) lists each factor, plus "any other relevant factor."
4. Was each new technology or development risk-assessed before launch? Subsection 156(2) requires the assessment "before doing so."
5. Is there a written, ongoing training program and a documented training plan, and was the training delivered? Paragraphs 156(1)(d) and (e).
6. Was your effectiveness review done and documented within the last two years, and were its findings reported in writing to a senior officer within 30 days? Subsections 156(3) and 156(4).

Bottom Line

The Minister's statement names regulatory supervision as an area the FATF report identifies for strengthening. FINTRAC's statement lists a new Supervision Framework, 35 notices of violation for more than $247 million in 2025-26, and a $37 million increase in supervisory-related resources over two years, across 38,000 businesses.

FINTRAC says it will use the added resources to continue strengthening its oversight, "including fully addressing FATF's recommendations."