New AML Requirements for Leasing and Financing Entities in Canada

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has expanded its regulatory scope to include businesses engaged in financing or leasing high-value property or vehicles. This change means that entities offering business-purpose leasing or financing must now implement full anti-money laundering (AML) and anti-terrorist financing (ATF) compliance programs, consistent with obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).

Who Is Affected

FINTRAC’s definition of a financing or leasing entity now includes:

• Persons or entities providing financing or leasing of business-purpose property (excluding real estate)
• Entities engaged in financing or leasing property valued at $100,000 or more, other than real property
• Businesses leasing or financing passenger vehicles in Canada

This change captures a broad range of businesses that may not have previously been subject to FINTRAC oversight, including equipment-leasing firms, vehicle-financing companies, and specialised leasing intermediaries.

What FINTRAC Requires

All covered entities must now establish a documented AML/ATF compliance program that includes:

• A designated Compliance Officer with direct oversight responsibilities
• Written policies and procedures describing how compliance obligations are met
• A Risk-Based Assessment (RBA) identifying exposure across clients, products, geography, and delivery channels
• Client identification and verification at the start of a business relationship
• Ongoing monitoring of client relationships and transaction activity
• Reporting obligations to FINTRAC, including Suspicious Transaction Reports (STRs), Large Cash Transaction Reports (LCTRs), and Listed Person or Entity Property Reports
• Recordkeeping of all required documents for a minimum of five years

Why This Matters

The inclusion of leasing and financing entities closes a long-standing regulatory gap in Canada’s AML framework. These businesses often handle significant transaction volumes, operate through layered financing structures, and may deal with high-value assets. As such, they are now expected to apply the same level of due diligence and reporting rigour as other FINTRAC-regulated entities such as banks, MSBs, and real estate professionals.

This new framework strengthens transparency in Canada’s financial system and ensures that leasing and financing arrangements cannot be used to conceal the movement or ownership of illicit funds.

What You Should Do Next

1. Determine if your business is in scope by reviewing whether your financing or leasing activity meets FINTRAC’s definitions.
2. Conduct a compliance gap assessment to identify what policies, processes, or systems need to be created or updated.
3. Appoint or confirm a Compliance Officer responsible for developing and maintaining your AML/ATF program.
4. Develop written procedures covering client onboarding, verification, monitoring, and escalation of suspicious activity.
5. Train staff on compliance obligations, red-flag indicators, and reporting timelines.
6. Document everything — FINTRAC expects traceable evidence of compliance controls and oversight.