What Financing and Leasing Companies Need to Know
The federal government and the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) published amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (PCMLTFA) on March 26, 2025. These amendments will require financing and leasing companies to play a key role in the detection and deterrence of money laundering and terrorist financing in Canada.
The amendments, apply to any entity or individual engaged in the business of financing or leasing:
- Property (excluding real estate or immovables) for business purposes.
- Property valued at $100,000 or more (excluding real estate or immovables).
- Passenger vehicles in Canada.
What are the new obligations?
The amendments introduce new compliance obligations for financing and leasing companies, which include:
- Establishing and maintaining a compliance program: Companies must develop or adjust their Anti-Money Laundering (AML) programs to meet the new requirements.
- Enhanced Know Your Customer (KYC) requirements: This includes more stringent processes for client identification, ongoing monitoring of accounts and high-risk clients, verification of beneficial ownership, and third-party determination.
- Transaction reporting for specific activities and thresholds.
- Recordkeeping to ensure all required information is tracked and accessible.
What All Reporting Entities Need to Know
- Effective Oct. 1, 2025, all reporting entities are obliged to report material discrepancies between their records and a company’s registry filings regarding federal corporate beneficial ownership in circumstances where reporting entities assess a high risk of a money laundering or terrorist financing offence.
Key Dates
- Apr. 1, 2025: The regulations came into force, and all financing and leasing entities must ensure compliance. During the first year, FINTRAC will focus on engagement and outreach to provide guidance and support to help businesses adjust to the new requirements.
- Oct. 1, 2025: Beneficial ownership and discrepancy reporting obligations will become mandatory for all reporting entities.
You can access the full details of the amendment here.
How can ESC help?
ESC is equipped to help businesses stay ahead of these compliance requirements without slowing down their operations through our due diligence solutions.
- Accurate Business Data Verification – ESC’s Legal Entity Validator (LEV) offers a Know Your Business (KYB) solution that ensures your organization meets enhanced due diligence requirements. It validates your business client’s existence, status, and jurisdiction, streamlining the onboarding and monitoring process.
- Secure non-face-to-face ID verification – ESC’s SIDni (Secure Identification Network for Individuals) solution verifies individuals in a non-face-to-face context using multiple verification methods, ensuring compliance with FINTRAC guidelines while offering a smooth verification process for your customers.
- Audit Ready Recordkeeping – Easily accessible records are available for efficient reporting and compliance.
- Beneficial Ownership Compliance – With ESC’s upcoming reporting solution, you can capture accurate beneficial ownership information and manage material discrepancies in compliance with the new PCMLTFA amendment.
Contact Us
To learn more about how ESC can support you in meeting these new obligations, contact us at [email protected].
