The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has once again demonstrated its firm stance on compliance violations within the financial sector. On February 25, 2025, FINTRAC announced that MSBG International Holdings Ltd., also known as MTT Centre, had been fined following a compliance review conducted in 2023. The Vancouver-based money services business (MSB) was issued a monetary penalty of $24,750 on December 19, 2024, for non-compliance with Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and associated regulations.

This penalty serves as a clear indication of FINTRAC’s ongoing commitment to ensuring businesses meet their obligations under Canada’s anti-money laundering (AML) and anti-terrorist financing (ATF) laws.

The Nature of MSBG International’s Violation

MSBG International Holdings Ltd. was found guilty of failing to develop and implement written compliance policies and procedures that remained up to date. This violation, while administrative in nature, underscores a critical compliance requirement that all financial service providers must adhere to. Compliance policies are the foundation of an effective AML/ATF program, and businesses that fail to implement them risk regulatory penalties, reputational damage, and potential criminal scrutiny.

The company has since paid the fine in full, concluding the enforcement action. However, the case serves as an important reminder for all businesses operating in Canada’s financial landscape.

FINTRAC’s Role in Enforcing AML Compliance

As Canada’s financial intelligence unit (FIU) and AML/ATF supervisor, FINTRAC plays a crucial role in ensuring that businesses comply with regulations designed to prevent money laundering, terrorist financing, and other financial crimes. The agency monitors compliance across multiple sectors, including:

• Casinos
• Financial entities
• Money services businesses (MSBs)
• Real estate brokers and sales representatives
• Accountants and accounting firms
• Dealers in precious metals and stones
• British Columbia notaries

Each of these sectors is legally obligated under the PCMLTFA to implement compliance programs, maintain client records, and report specific financial transactions to FINTRAC, such as international electronic funds transfers, large cash transactions, and suspicious activities.

The Importance of Suspicious Transaction Reporting

One of FINTRAC’s most valuable tools in the fight against financial crime is the reporting of suspicious transactions. When businesses report unusual financial activities, they provide critical intelligence that can aid law enforcement in investigating and prosecuting money laundering, fraud, terrorist financing, and sanctions evasion.

In 2023-24 alone, FINTRAC issued 12 Notices of Violation to non-compliant businesses, amounting to over $26 million in penalties. Since gaining the legislative authority to impose penalties in 2008, FINTRAC has issued more than 140 penalties across various business sectors. This enforcement track record illustrates the agency’s commitment to maintaining the integrity of Canada’s financial system.

Why MSBG’s Violation Matters

The penalty imposed on MSBG International Holdings Ltd. highlights the following key compliance lessons:

• A Strong Compliance Framework Is Mandatory – Businesses must establish and maintain robust AML/ATF compliance policies to avoid penalties and regulatory action.
• Regular Updates and Implementation – Policies cannot be static; they must evolve to meet changing regulatory requirements and risks.
• Regulatory Scrutiny Is Increasing – FINTRAC continues to enforce compliance with growing intensity, ensuring that businesses take their responsibilities seriously.
• Financial Penalties Are a Deterrent – While the fine imposed on MSBG International may seem modest, the reputational risks and potential for increased regulatory scrutiny are significant concerns for any financial services business.

Strengthening AML Compliance: What Businesses Should Do

To avoid similar penalties, businesses operating in Canada’s financial ecosystem should take proactive steps to strengthen their AML/ATF compliance programs. The following actions are essential:

• Develop and Maintain a Comprehensive Compliance Program
  A compliant AML program includes policies, procedures, and internal controls that ensure adherence to FINTRAC’s regulatory requirements. Regular reviews and updates are necessary to align with legislative changes.
• Conduct Ongoing Employee Training
  All employees handling financial transactions should receive regular AML/ATF training. Understanding red flags, suspicious behaviors, and reporting obligations is crucial for compliance.
• Perform Regular Risk Assessments
  Businesses must continuously assess their exposure to financial crime risks and implement mitigation strategies accordingly. This includes evaluating transaction patterns, client profiles, and geographical risks.
• Establish a Dedicated Compliance Officer
  Having a dedicated compliance officer ensures that regulatory requirements are met and that the organization remains vigilant against financial crime threats.
• Leverage Technology for Compliance
  AML compliance software can automate monitoring, transaction screening, and reporting, helping businesses meet their obligations more efficiently and accurately.

Conclusion: A Call for Proactive Compliance

The enforcement action against MSBG International Holdings Ltd. underscores FINTRAC’s determination to uphold Canada’s AML and ATF framework. Compliance is not optional—it is a critical responsibility for all financial service providers. By proactively implementing strong compliance policies, conducting regular training, and leveraging technology, businesses can avoid penalties and contribute to the security of Canada’s financial system.

As regulatory scrutiny increases, companies must recognize that investing in compliance today will safeguard their operations and reputation in the future. AML compliance is not just about avoiding fines—it is about protecting the financial sector from criminal exploitation.

Related Links

• FINTRAC Official Website
• Proceeds of Crime (Money Laundering) and Terrorist Financing Act
• FINTRAC’s Guidance on Compliance
• Money Laundering and Terrorist Financing Indicators
• FINTRAC’s Administrative Monetary Penalties
• Financial Action Task Force (FATF)

Other FinCrime Central News Reports about FINTRAC

• Powerful Measures to Combat Fentanyl: FINTRAC’s New Alert on Money Laundering
• Exchange Bank of Canada Fined $2.46M by FINTRAC
• Mortgage industry braces for FINTRAC’s new AML rules starting October 11

Source: FINTRAC