Legislation passed in March requires FINTRAC to impose a MANDATORY COMPLIANCE AGREEMENT to companies that receive an administrative monetary penalty.  That means paying the ticket and getting an order on how to fix previous records and reports, and setting up a system to get it right in the future.

Not meeting the standards of that agreement could lead to further monitoring and penalties.  

Potential penalties now can reach $30 million or 3% of global revenue if you breach your compliance order.

TAS can help you keep FINTRAC happy by supporting remedial plan development and execution... better yet, by keeping your program up to speed before the examination happens.

WHAT CHANGED

I.

Mandatory agreements

Under Part 4.1 of the amended PCMLTFA, every reporting entity that receives an AMP must enter a compliance agreement with FINTRAC setting out remedial measures and a Director-determined deadline.

Refusal or failure triggers a compliance order — served, publicised, and entered into the public record under the entity's name.

Important Note:  Compliance Agreements will be required only when any appeals are complete and penalties are final.

II.

Penalties multiplied 40×

Maximum AMPs now reach $40,000 (minor), $4m (serious), and $20m (very serious) per violation. Stack multiple breaches and the cap becomes the greater of $20m or 3% of gross global revenue.

Potential penalties for not meeting mandatory compliance agreement obligations together with the initial penalty can reach up to $30 million or 3% of global revenue.  Together with the initial penalty, that could mean 6% of global revenue as penalties for non-compliance with AML rules.

III.

A new standard to meet for your compliance program

The legal standard for your compliance program elements has moved from "intended to ensure compliance" to "reasonably designed, risk-based and effective" — a substantive test, not a paper one.