Canada Bolsters Anti-Money Laundering Laws to Target Organized Crime and Fentanyl Trafficking

In a sweeping move to combat financial crime and the trafficking of deadly drugs like fentanyl, the Government of Canada has announced a slate of new regulatory amendments aimed at strengthening its Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) framework.

The new measures are designed to significantly enhance the country’s ability to detect, deter, and disrupt criminal financial activity—particularly trade-based money laundering, which is often linked to transnational organized crime and narcotics distribution networks.

A Modernized Regulatory Framework

The amendments include several key initiatives:

• Expanded powers for the Canada Border Services Agency (CBSA) to better identify and stop trade-based financial crimes;

• A new legal framework that enables private sector institutions to share data about money laundering, terrorist financing, and sanctions evasion. This aims to make it more difficult for criminals to exploit gaps in the financial system;

• A new requirement for financial institutions to report any inconsistencies between customer data and the federal beneficial ownership registry maintained by Corporations Canada, ensuring greater transparency and accuracy;

• Extended AML/ATF obligations to previously underregulated sectors such as cheque cashing services, factoring companies, and financing and leasing firms—closing long-standing loopholes used by criminals.

Effective April 1, 2025, provincial and territorial civil forfeiture offices will also start receiving financial intelligence from FINTRAC (Financial Transactions and Reports Analysis Centre of Canada) to help seize assets linked to criminal activities.

Additionally, the Minister of Finance and Intergovernmental Affairs, the Honourable Dominic LeBlanc, will revise directives related to North Korea and Russia to strengthen sanctions enforcement and protect Canada’s financial institutions from being exploited for geopolitical threats.

“These amendments will ensure that we remain effective and nimble in combatting financial crime and block any pathway for organized crime groups to use our financial system to finance their illegal, deadly drug trafficking operations,” said Minister LeBlanc.

A Coordinated Crackdown

The changes come on the heels of several recent federal initiatives. On February 3, 2025, Prime Minister Justin Trudeau announced the formation of a Canada-U.S. Joint Strike Force to tackle cross-border organized crime and fentanyl trafficking. Just weeks later, the government held the first meeting of the Integrated Money Laundering Intelligence Partnership, a collaboration between law enforcement and major Canadian banks aimed at boosting intelligence-sharing on financial crime.

Earlier this year, FINTRAC was also directed to prioritize efforts against cartels and illicit drug traffickers, including those involved in fentanyl distribution, underscoring the government’s urgency in addressing this public safety threat.

Background and Global Coordination

The regulatory amendments follow a consultation period that began with their pre-publication in the Canada Gazette on November 30, 2024, and are part of a broader suite of actions outlined in Budget 2022, Budget 2023, Budget 2024, and the 2023 Fall Economic Statement.

Since 2020, the federal government has invested over $379 million to modernize the AML/ATF regime, bolstering financial intelligence capabilities, expanding investigative tools, and bringing more sectors under regulatory oversight.

Canada’s upcoming 2025 G7 presidency will place a spotlight on global illicit finance. The government plans to rally G7 Finance Ministers around a coordinated “call to action” to address international financial crimes that threaten economic and national security.

As part of ongoing efforts to ensure transparency, a public, searchable beneficial ownership registry for federal corporations was also launched in January 2024—making it harder for criminals to use shell companies to launder money or hide assets.