FINTRAC Penalty on Commerciale I.C. - Pacific Inc.: A Clear Warning to MSBs

On 5 February 2026, FINTRAC announced a significant Administrative Monetary Penalty (AMP) of $224,235 against Commerciale I.C. - Pacific Inc., a money services business (MSB) in Montréal, Quebec, also operating as I.C. - Pacific Trading Inc. The penalty, imposed on 2 September 2025, followed a compliance examination under Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its Regulations.

This case goes well beyond a single dollar figure. It touches core elements of AML compliance in Canada for MSBs: timely FINTRAC reporting, written policies and procedures, risk assessment, independent review, and adherence to a Ministerial Directive. For MSBs across the country, this enforcement action is a clear signal that FINTRAC is tightening expectations and accelerating FINTRAC enforcement activity.

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What Happened: FINTRAC's Examination Findings

FINTRAC found that Commerciale I.C. - Pacific Inc. committed multiple administrative violations. Each of these failures maps directly to fundamental PCMLTFA requirements for MSB compliance.

Failure to report electronic funds transfers within five working days

FINTRAC requirement: Reporting entities must submit electronic funds transfer (EFT) reports to FINTRAC no later than five working days after the transfer when reporting thresholds and conditions are met.

FINTRAC's finding: Commerciale I.C. - Pacific Inc. failed to report certain electronic funds transfer reports within the prescribed five working day window.

Why it matters: Late EFT reporting undermines the timeliness and usefulness of FINTRAC reporting for law enforcement and national security partners. For MSBs, which often process high‑risk cross‑border flows, delayed EFT reports can mean missed opportunities to detect money laundering, terrorist activity financing, sanctions evasion, and other threats to the security of Canada.

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Failure to develop and apply written compliance policies and procedures

FINTRAC requirement: Under the PCMLTFA, MSBs must develop, document, and apply written compliance policies and procedures tailored to their operations, covering record keeping, client identification, transaction monitoring, and reporting obligations such as suspicious transaction reporting and large virtual currency transaction reporting.

FINTRAC's finding: The MSB did not have adequate written policies and procedures in place, nor were they properly applied in practice.

Why it matters: Written policies and procedures are the backbone of MSB compliance. Without them, staff lack clear direction on how to identify clients, when to file suspicious transaction reports, or how to use tools such as a FINTRAC API or RegTech systems to support automated reporting. This gap increases operational risk and the likelihood of systemic non‑compliance.

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Failure to assess and document risk considering prescribed factors

FINTRAC requirement: Reporting entities must assess and document money laundering and terrorist financing risk, taking into account prescribed factors such as products, services, delivery channels, geography, and client types, and must adjust controls accordingly.

FINTRAC's finding: Commerciale I.C. - Pacific Inc. did not properly assess and document its risk exposure in line with prescribed factors.

Why it matters: A documented risk assessment is central to a risk‑based approach. For MSBs, which often serve higher‑risk client segments and corridors, an inadequate risk assessment leads to weak transaction monitoring, poor suspicious transaction reporting, and misaligned controls. It also leaves the business exposed during AML audit preparedness exercises and FINTRAC examinations.

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Failure to institute and document the prescribed review

FINTRAC requirement: Reporting entities must carry out a periodic, documented review of their compliance regime (often referred to as an independent or internal review) to test effectiveness and identify deficiencies.

FINTRAC's finding: The MSB failed to institute and properly document this prescribed review of its compliance program.

Why it matters: Without a documented review, management has no reliable assurance that controls are working as intended. For MSBs, this is a missed opportunity to identify and fix issues before FINTRAC does. It also signals to FINTRAC that the compliance culture may be weak or reactive rather than proactive.

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Failure to comply with a Ministerial Directive

FINTRAC requirement: When the Minister of Finance issues a Ministerial Directive to address specific money laundering, terrorist financing, or sanctions risks, reporting entities must comply with all related obligations, which may include enhanced reporting, restrictions, or additional due diligence.

FINTRAC's finding: Commerciale I.C. - Pacific Inc. failed to comply with at least one applicable Ministerial Directive.

Why it matters: Non‑compliance with a Ministerial Directive is particularly serious. These directives are targeted tools used to address elevated national security or foreign policy risks. For MSBs operating in higher‑risk corridors, failure to follow such directives can expose Canada’s financial system to significant threats and will almost certainly draw strong enforcement responses.

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Why This Penalty Matters

Heightened scrutiny on money services businesses

MSBs are inherently exposed to cross‑border flows, cash‑intensive activity, and non‑face‑to‑face services. FINTRAC has long identified MSBs as high‑risk for money laundering and terrorist financing, which explains the strong emphasis on MSB compliance and targeted examinations.

Core compliance regime failures, not technical errors

The violations here are not minor technical lapses. They go to the heart of the compliance regime: policies, risk assessment, independent review, timely EFT reporting, and Ministerial Directives. This signals that FINTRAC is prepared to impose substantial AMPs when foundational PCMLTFA requirements are not met.

Reinforcing FINTRAC’s shift toward stronger enforcement

FINTRAC’s Director and CEO, Sarah Paquet, emphasized that the regime exists to protect Canadians and the security of Canada’s economy, and that FINTRAC will take “appropriate actions when they are needed.” This case is consistent with a broader trend of more frequent and higher‑value FINTRAC enforcement actions across sectors.

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Lessons for Reporting Entities

Build and maintain a documented, risk‑based compliance regime

MSBs must ensure their compliance program is fully documented and proportionate to their risk. This includes:

• A written, up‑to‑date compliance manual
• A documented ML/TF risk assessment using prescribed factors
• Clear procedures for EFT, large cash, large virtual currency transaction reporting, and suspicious transaction reporting

Use technology and FINTRAC API integrations to strengthen reporting

Where feasible, MSBs should leverage RegTech solutions and FINTRAC API integrations to automate data capture and reporting, reduce manual errors, and ensure EFT reports are filed within the five working day deadline.

Treat Ministerial Directives as non‑negotiable

Ministerial Directives should be embedded into policies, training, and systems as soon as they are issued. MSBs should:

• Map directives to impacted products, countries, and clients
• Update screening and monitoring rules
• Document implementation steps for future AML audits and FINTRAC reviews

Conduct regular, well‑documented compliance reviews

An annual or risk‑based review of the compliance regime should be formally scoped, executed, and documented. Findings should feed into remediation plans, with board or senior management oversight. This is central to AML audit preparedness.

Elevate training and culture of compliance

Staff at all levels must understand PCMLTFA requirements, including when and how to file suspicious transaction reports, and the consequences of non‑compliance. Regular, role‑specific training is essential, particularly for front‑line and operations staff in MSBs.

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The Bigger Picture

FINTRAC’s quick facts underscore a broader enforcement context:

• In 2024–25, FINTRAC issued 23 Notices of Violation, the largest number in a single year in its history.
• Those Notices totalled more than $25 million in AMPs.
• Since gaining legislative authority to impose AMPs in 2008, FINTRAC has levied more than 150 penalties across most regulated sectors, including casinos, financial entities, MSBs, real estate brokers and sales representatives, and others.

These figures show a clear evolution from a primarily educational approach to a more assertive enforcement posture. While FINTRAC still “works with businesses to help them understand and comply,” it is increasingly prepared to use significant Administrative Monetary Penalties to encourage change in non‑compliant behaviour.

For all reporting entities subject to the PCMLTFA—especially MSBs—this means that robust AML compliance in Canada is no longer optional or purely reputational; it is a regulatory expectation backed by meaningful financial consequences.

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Final Thoughts

The $224,235 AMP against Commerciale I.C. - Pacific Inc. is a clear warning shot to MSBs nationwide. Failures in EFT reporting, written policies, risk assessment, compliance reviews, and adherence to Ministerial Directives will attract scrutiny and potentially substantial penalties.

MSBs that invest now in risk‑based programs, technology‑enabled FINTRAC reporting, and strong governance will be better positioned for future examinations—and will contribute more effectively to Canada’s collective fight against money laundering, terrorist financing, sanctions evasion, and broader threats to the security of Canada.