Building a Strong AML/ATF Compliance Framework under FINTRAC
As Canada’s financial landscape continues to evolve, with businesses increasingly handling fiat payments, cross-border remittances, and virtual currency transactions, AML/ATF expectations have become more important than ever. For Money Services Businesses (MSBs) in Canada and Foreign MSBs (FMSBs) providing services to clients in Canada, meeting the requirements of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) means putting practical, effective compliance measures in place, not simply checking a regulatory box.
A strong AML/ATF framework should be part of how your business operates every day. It helps identify and manage financial crime risks, supports regulatory compliance, and protects the business from potentially significant financial and reputational consequences.
In this article, the SALVUS Regulatory Compliance team in Canada outlines the key components of an effective AML/ATF compliance framework for MSBs under FINTRAC.
1. The 5 Core Pillars of a FINTRAC-Compliant Framework
2. AML/ATF Compliance: What Does It Mean in Practice?
3. Building Compliance into the Business
4. How SALVUS Can Help
We regularly share bite-sized insights on LinkedIn such as those found in this article
1. The 5 Core Pillars of a FINTRAC-Compliant Framework
Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its Regulations, a compliance program must include five core elements:
- Policies and Procedures: Maintaining tailored, written, and up-to-date policies and procedures, approved by a senior officer, covering client identification (KYC), recordkeeping, reporting, and ongoing monitoring obligations.
- Compliance Officer: Appointing an individual with authority, resources, and industry expertise to implement and manage the AML/ATF program effectively.
- Training Program: Ensuring staff are continuously trained to identify red flags, understand regulatory updates, and carry out compliance protocols.
- Documented Risk Assessment: Assessing and documenting your money laundering and terrorist financing risks, considering your clients and business relationships, products, services, delivery channels, geographic locations, new developments and technologies, and any other relevant factors, and applying appropriate risk-mitigation measures.
- Two-Year Effectiveness Review: Reviewing your policies and procedures, risk assessment, and training program at least every two years to test their effectiveness. The review must be carried out by an internal or external auditor, or by the business itself if it has no auditor.
2. AML/ATF Compliance: What Does It Mean in Practice?
| Area | What Your Business Needs to Do | Why It Matters |
|---|---|---|
| Know Your Client & Beneficial Ownership | Verify clients, understand who owns or controls client entities, and keep information current. | Helps identify who you are dealing with and supports effective risk assessment. |
| Risk Assessment & Enhanced Due Diligence | Assess client and business risks and apply enhanced measures where higher risks are identified. | Ensures higher-risk relationships receive appropriate scrutiny and controls. |
| Transaction Monitoring & Reporting | Monitor transactions for unusual or suspicious activity and complete required FINTRAC reporting. | Supports timely detection and reporting of potential money laundering or terrorist financing concerns. |
| Recordkeeping | Maintain required client, transaction, reporting, and compliance records in an accessible format. | Demonstrates compliance and supports regulatory reviews or examinations. |
| Compliance Program & Governance | Maintain appropriate AML/ATF policies, procedures, controls, oversight, and compliance responsibilities. | Provides a structured framework for meeting FINTRAC obligations consistently. |
| Employee Training & Compliance Culture | Provide role-appropriate AML/ATF training and ensure employees understand their compliance responsibilities. | Helps staff recognize risks and apply AML/ATF requirements in day-to-day activities. |
| Ongoing Review & Regulatory Compliance | Review the AML/ATF program periodically, address gaps, and keep controls aligned with regulatory requirements and business changes. | Helps ensure the compliance program remains effective and up to date. |
3. Building Compliance into the Business
Effective AML/ATF compliance should not sit on the sidelines as a regulatory requirement. It should be built into the way a business onboards clients, processes transactions, manages risk and makes decisions.
Adopt a Risk-Based Approach
Not every client, transaction, product, or jurisdiction carries the same level of risk. A risk-based approach helps businesses focus resources where financial crime risks are greatest. This includes clear risk-rating criteria, appropriate customer due diligence (CDD) and enhanced due diligence (EDD) measures, and regular reviews when circumstances or risk factors change.
Build Compliance into Onboarding & Monitoring
Compliance should begin before a client relationship is established and continue throughout the relationship. Businesses should have processes for identity verification, beneficial ownership, risk classification, screening, and ongoing monitoring, with escalation procedures for higher-risk activity.
Strengthen Transaction Monitoring & Recordkeeping
Businesses should be able to identify unusual transaction patterns and investigate activity that may require further action or reporting. Where appropriate, technology can support transaction monitoring, but it should not replace documented procedures and human review. Clear and accessible records should also demonstrate what information was collected, how risk was assessed, and how concerns were addressed.
Train Employees & Assign Accountability
Employees need practical, role-appropriate AML/ATF training so they can recognize red flags and understand when to escalate concerns. Clear accountability should also be established across management, compliance, and operational teams for monitoring, reporting, recordkeeping, and review.
Review & Evolve the Framework
AML/ATF compliance is an ongoing process. Businesses should periodically review their policies, controls, training, and risk assessments, particularly when introducing new products, technologies, customer segments, jurisdictions, or business models.
At SALVUS, we help businesses move beyond a “check-the-box” approach by developing practical AML/ATF frameworks that are proportionate to their business model, risk profile, and regulatory obligations.
This reflects the Canadian requirement, in force since March 26, 2026, and highlighted by FINTRAC, that compliance programs be “reasonably designed, risk-based and effective.” Our focus is on translating these principles into controls that support day-to-day operations and informed decision-making.
4. How SALVUS Can Help
At SALVUS, we support businesses navigating the Canadian AML/ATF and regulatory landscape with practical, risk-based compliance solutions tailored to their activities and operating model.
Our support includes FINTRAC MSB registration, RPAA registration, AML/ATF frameworks, regulatory gap assessments, risk assessments, policies and procedures, and ongoing compliance support.
We can also assist businesses establishing or expanding in Canada with practical local presence solutions, including office subleasing and fractional AML compliance officer (AMLCO) services.
Through our Regulatory Compliance team, we support businesses with compliance reviews, regulatory monitoring, reporting processes, policy updates, and engagement with regulatory authorities where required.
A strong AML/ATF program should not only meet regulatory requirements but also remain proportionate to the business and evolve alongside its activities, customers, products, and regulatory obligations.
Contact us at info@salvusfunds.com to explore how our Canada team can support your business with MSB and RPAA registration, FINTRAC and Bank of Canada compliance, internal audit, entities for sale, and M&A advisory.
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The information provided in this article is for general information purposes only. You should always seek professional advice suitable to your needs.