Is your dealership compliant with the new anti-money laundering requirements?

What steps should your business be taking to comply with FINTRAC?

If your dealership meets the criteria above, there are five key elements that your dealership needs to include when setting up and maintaining an AML compliance framework that meets the regulatory requirements.

This checklist can help you assess your progress:

1. Have you appointed a compliance officer?

The first step is to identify the individual who will be responsible for your AML compliance program. The responsibilities of a compliance officer include developing policies and procedures, training employees, and implementing the tools needed to comply with the regulations.

Your compliance officer should have the necessary authority, access to resources, and understanding of your dealership’s operations and AML regulations. This ensures they have the knowledge to understand how legislation will impact your business and can leverage the right resources to ensure your dealership is compliant.

2. Have you performed and documented a risk analysis?

The regulations require a risk-based approach. This means your dealership needs to understand its money laundering (ML), terrorist financing (TF), and sanctions evasion (SE) risks and invest in the proper measures to mitigate those risks and ensure compliance.

Your dealership must consider the risks associated with the products, services, and delivery channels it offers. This risk analysis must also include geographic location(s) where you conduct leasing and financing activities, your clients, new developments and technologies, and other relevant factors. Your dealership must also demonstrate these have been considered by documenting this assessment.

3. Are your policies and procedures written, actionable, and accessible to relevant staff?

Once you understand your risks, the next step is to develop written policies and procedures. These must provide a clear roadmap of how the people, processes, and systems in your dealership will work together to manage the dealership’s ML / TF / SE risks and comply with the AML regulations. This involves, but is not limited to, collecting and verifying information about a client (including their identity and beneficial ownership), performing ongoing monitoring, and reporting certain transactions to FINTRAC.

4. Have you implemented a training program?

After you have developed written policies and procedures, it is necessary to develop a training program for all relevant staff and agents to ensure they understand not only ML / TF / SE fundamental concepts but also your dealership’s specific AML program and their role in its success.

5. Have you pencilled in reminders to maintain the program on an ongoing basis and conduct a biennial review?

The regulations require your dealership to keep its AML program updated on an ongoing basis and to have it reviewed every two years, which can be supported by an internal audit department or external firm. The first biennial review of your dealership’s AML program is required to start prior to April 1, 2027. This not only ensures you are meeting the minimum requirements but also helps ensure your business has the right program in place and remains up to date with evolving risks in the sector.

What are the penalties for non-compliance?

As noted above, FINTRAC has indicated that it aims to foster awareness and understanding amongst those newly impacted by the regulations that came into force on April 1, 2025. However, it is still important to note that FINTRAC has the authority to issue both financial penalties and criminal charges for instances of non-compliance.

Financial penalties vary by degree of importance, with violations categorized as minor, serious, and very serious and range from a maximum of for a minor violation to a maximum of $500,000 for a very serious violation. Additionally, FINTRAC has the power to publicly name reporting entities on its website that are issued penalties for AML compliance deficiencies. Severe or repeated non-compliance may cause reputational damages to your dealership. 

Another important consideration is that the Strong Borders Act (Bill C-2), introduced on June 3, 2025, proposed multiplying the current penalty caps by 40 times. This increases maximum penalties to:

• Minor: $40,000
• Serious: $4 million
• Very serious: $20 million

At the time this article was written, Bill C-2 had completed its first reading in the Canadian House of Commons, and the second reading was pending. 

Take the next steps

It is crucial to establish an effective AML compliance program to comply with FINTRAC’s requirements. Contact MNP’s Anti-Money Laundering Services team for advice or assistance on creating an AML compliance program for your dealership.