Administrative monetary penalties
Administrative monetary penalties (AMPs) are an additional tool to criminal sanctions with the objective of supporting and enhancing efforts to ensure compliance on the part of reporting entities. AMPs allow for a measured and proportionate response to particular instances of non-compliance.
Violations are classified by the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations as minor, serious or very serious and carry the following range of penalties:
- Minor violation: from $1 to $1,000 per violation
- Serious violation: from $1 to $100,000 per violation
- Very serious violation: from $1 to $100,000 per violation for an individual, and from $1 to $500,000 per violation for an entity (e.g. corporation)
The limits above apply to each violation, and multiple violations can result in a total amount that exceeds these limits. A list of violations is available on the Justice Canada website.
Determining the penalty
As stipulated by the governing legislation and regulations, FINTRAC considers the following three criteria in determining the penalty amount:
The harm caused by the violation(s)
FINTRAC assesses harm in relation to the degree to which the violation obstructs Canada's ability to detect and deter money laundering and terrorist financing. The resulting harm of a violation can vary within the minor, serious and very serious classifications – for example, a serious violation may be considered to have a high impact on Canada’s ability to detect and deter money laundering and terrorist financing; however, different violations that are also classified as serious, may be considered to have a medium or low impact. A level of harm is assessed for each violation and is used to identify the base penalty amount.
The compliance history of the reporting entity
FINTRAC looks back at five years of compliance history of reporting entities to determine whether the penalty amount should be adjusted. A positive compliance history results in a penalty amount reduction; a negative compliance history results in a penalty amount increase. Compliance history depends on past indicators of compliance and non-compliance. Examples of these indicators include the results and findings of past examinations, whether information requested by FINTRAC has been properly submitted, or if the reporting entity was previously subject to enforcement action on the part of FINTRAC.
The non-punitive nature of an administrative monetary penalty
Finally, the purpose of the AMP program is to encourage compliance with the PCMLTFA, rather than to punish non-compliance. As such, FINTRAC considers the reporting entity size, based on its number of employees, and further adjusts the penalty amount to reflect the reporting entity’s ability to pay the AMP.
Upon receipt of a notice of violation, a person or entity can make payment by completing the remittance form and submitting it with the payment in Canadian funds to:
24th Floor, 234 Laurier Avenue West
Ottawa, ON K1P 1H7
All payments are to be made payable to the Receiver General for Canada. Payments can be made in the form of a certified cheque, money order, or bank draft.
Requesting a review by FINTRAC’s Director
A person or entity may request a review of a notice of violation. This can be done by making written representations on the violations and/or the proposed penalty, to the Director of FINTRAC, within 30 days of receiving the notice of violation.
Public notice of AMPs imposed is an important component of the program. FINTRAC can, at its discretion, publish specific details of an AMP imposed once all proceedings in respect of the AMP have concluded (i.e., all avenues of review and appeal have been exhausted). The purpose of public notice is to promote awareness, encourage a change in compliance behaviour and demonstrate transparency. As such, FINTRAC has published details on administrative monetary penalties imposed, from the start of the program in 2009.
As of June 26, 2013, a person or entity subject to an administrative monetary penalty may be named if one of the following criteria is met:
- The person or entity has committed a very serious violation; or
- The base penalty amount is equal to or greater than $250,000, before adjustments are made in consideration of the person or entity’s compliance history and ability to pay; or
- Repeat significant non-compliance on the part of the person or entity.
When a person or entity is named, FINTRAC will specifically publish the name of the person or entity that committed the violation(s), the business sector, the nature of the violation, the city where the business is located, and the penalty amount imposed.
You can view the public list of AMPs imposed by FINTRAC on the Public Notice page.
FINTRAC publishes statistical information on administrative monetary penalties imposed by business sector.
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