AML Compliance & KYC in Canada
FINTRAC compliance is complex – it doesn’t have to be chaotic
Overview
Canada’s AML regime is defined by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and enforced by FINTRAC. Obligations include Know Your Customer (KYC), Know Your Business (KYB), and Know Your Transaction (KYT) requirements — each demanding increasing layers of verification, recordkeeping, monitoring, and reporting.
Regulated entities must not only prove identity but demonstrate risk controls, document decisions, and maintain full audit trails — for five years or more.
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KYC Requirements in Canada
Who is subject to KYC?
Any individual opening an account, executing large transactions (CAD $10,000+), or engaging in high-risk financial activity must undergo identity verification.
Canada KYC Requirements:
Verify identity using one of five FINTRAC-approved methods (e.g. government ID, credit file, dual process. affiliate method, and the reliance method)
Trigger ongoing monitoring and enhanced due dilgience requests at onboarding and when thresholds are hit (e.g. CAD $10K cash/crypto, CAD $3K FX, CAD $1K EFT)
Screen globally for political exposure, sanctions, watchlists, fitness, probity, human trafficking, crime, financial crime, fraud, terrorist activity, and adverse media on an ongoing basis
Maintain secure, validated records of client identity, date of birth, occupation, and transaction linkage for a minimum of five years after the last transaction
Reassess client risk regularly based on changes in behavior, transactions, or material updates to personal information.
KYB Requirements in Canada
Who is subject to KYB?
Any corporation, partnership, trust, or charity that opens an account or transacts above FINTRAC thresholds must undergo entity-level due diligence.
Canada KYB Requirements:
Verify the legal existence of the entity using reliable sources such as registries, incorporation records, or corporate filings
Identify and verify all beneficial owners with 25% or more ownership and document control and ownership structure
Collect ID and assess the authority of directors, officers, trustees, and authorized signers with control over accounts
Record the nature of the business, business activities, industry classification, source of funds, and the expected nature and purpose of relationships
Monitor entities and UBOs to refresh records on file whenever there are changes in ownership, control, risk classification, or regulatory triggers
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KYT Transaction Monitoring Requirements in Canada
What activity is subject to KYT?
All transactions must be monitored to detect suspicious behavior, trigger reporting obligations, and maintain real-time oversight of client activity.
Canada KYT Requirements:
Monitor transactions exceeding CAD $10,000 in cash, crypto, or international EFTs, and log reportable thresholds
Flag transactions that deviate from known client behaviour or expected account purpose, based on risk profile
Screen all parties and activity daily against real-time sanctions lists, political exposure, and adverse media
Document investigation steps, alert history, and decision rationale for full internal review and regulatory readiness
Retain all transaction, case, and alert records for at least five years after the last relevant client interaction
AML Risk Screening Requirements in Canada
Who is subject to AML screening?
All clients, counterparties, and transactions must be screened against global risk lists — not just at onboarding, but continuously — to meet Canada’s AML and anti-terrorist financing obligations under PCMLTFA.
Canada AML Screening Requirements:
Screen individuals and entities against Canadian and global sanctions lists (e.g. OSFI, UN, EU, OFAC) at onboarding and ongoing intervals
Identify politically exposed persons (PEPs), heads of international organizations (HIOs), and close associates or family members
Monitor for new risk, adverse media, financial crime exposure, human trafficking, narcotics, corruption, and terrorist financing
Assign and update risk scores based on jurisdiction, transaction behavior, client type, and historical alerts
Escalate high-risk profiles for enhanced due diligence and document the rationale, decisions, and supporting evidence
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iComply Platform Modules
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KYB
for Corporates
Onboard, verify, review, refresh, and reporting for legal entities
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KYC
for Individuals
Identity verfication and fraud detection for natural persons
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KYT
for Transactions
Batch processing and real-time transaction monitoring
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AML
Risk Screening
On-demand or continuous monitoring for AML/CFT risk
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