FINTRAC Compliance: Understanding Ministerial Directives and its Applicable Countries
Ministerial Directives issued by the Minister of Finance are a critical part of Canada’s anti-money laundering and anti-terrorist financing regime, and they are mandatory for all Money Services Businesses (MSBs). These directives are issued under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and are enforced by FINTRAC to help mitigate risks related to international financial crime. While they may not change frequently, they carry significant compliance weight.
Currently, Ministerial Directives apply to transactions involving Russia, Iran, and North Korea—countries identified as presenting elevated risks to the integrity of the global financial system. These directives require all reporting entities, including MSBs, to implement enhanced due diligence measures and report certain types of transactions. Critically, every MSB must reflect these directives in a written policy, which must be incorporated into its broader compliance program.
What’s Required of MSBs?
If you're an MSB, the requirement is clear: your compliance program must include a documented policy that describes how your business will meet its obligations under the applicable directives. This isn’t optional, and failure to produce or apply such a policy during a FINTRAC examination could lead to a formal finding of non-compliance.
Your policy should include:
Currently, Ministerial Directives apply to transactions involving Russia, Iran, and North Korea—countries identified as presenting elevated risks to the integrity of the global financial system. These directives require all reporting entities, including MSBs, to implement enhanced due diligence measures and report certain types of transactions. Critically, every MSB must reflect these directives in a written policy, which must be incorporated into its broader compliance program.
What’s Required of MSBs?
If you're an MSB, the requirement is clear: your compliance program must include a documented policy that describes how your business will meet its obligations under the applicable directives. This isn’t optional, and failure to produce or apply such a policy during a FINTRAC examination could lead to a formal finding of non-compliance.
Your policy should include:
- Identification of the countries to which Ministerial Directives currently apply (Russia, Iran, North Korea).
- Internal procedures for identifying transactions associated with these jurisdictions.
- Specific controls for enhanced recordkeeping, client due diligence, and transaction monitoring.
- Steps for submitting suspicious transaction reports (STRs) or large virtual currency transaction reports (LVCTRs), if applicable.
- Evidence that employees are trained to apply the directive-related procedures effectively.
A Moving Target: Why Updates Matter
Ministerial Directives are subject to change at the discretion of the Minister of Finance, based on emerging global risks. For example, the directive concerning Russia was strengthened in 2022 following geopolitical developments and is likely to evolve further. FINTRAC expects MSBs to monitor updates regularly and ensure their written policy reflects the most current requirements.
Failing to keep your directive policy up to date—even if the directive itself hasn’t changed recently—can result in outdated practices that expose your business to risk. As part of your regular compliance reviews, your MSB should revisit this section of your program and verify that all controls, monitoring systems, and staff awareness remain aligned with the directives in effect.
More Than a Form
Ministerial Directives are more than just an administrative formality. They are a strong signal from Canadian authorities that certain jurisdictions require additional scrutiny, and that regulated businesses like MSBs must serve as a frontline defense. By proactively implementing a written policy, training your staff, and staying up to date, your business contributes to the broader effort to safeguard the Canadian and global financial systems.
For full details and the current list of applicable directives, visit FINTRAC’s Ministerial Directives page.
We’re here to help!
Need help navigating the ever-changing compliance landscape? Our firm specializes in streamlining compliance strategies for both new and operating MSBs, helping you focus on what matters most—growing your business. Get in touch with us today to ensure your program is not only compliant but future ready.
Ministerial Directives are subject to change at the discretion of the Minister of Finance, based on emerging global risks. For example, the directive concerning Russia was strengthened in 2022 following geopolitical developments and is likely to evolve further. FINTRAC expects MSBs to monitor updates regularly and ensure their written policy reflects the most current requirements.
Failing to keep your directive policy up to date—even if the directive itself hasn’t changed recently—can result in outdated practices that expose your business to risk. As part of your regular compliance reviews, your MSB should revisit this section of your program and verify that all controls, monitoring systems, and staff awareness remain aligned with the directives in effect.
More Than a Form
Ministerial Directives are more than just an administrative formality. They are a strong signal from Canadian authorities that certain jurisdictions require additional scrutiny, and that regulated businesses like MSBs must serve as a frontline defense. By proactively implementing a written policy, training your staff, and staying up to date, your business contributes to the broader effort to safeguard the Canadian and global financial systems.
For full details and the current list of applicable directives, visit FINTRAC’s Ministerial Directives page.
We’re here to help!
Need help navigating the ever-changing compliance landscape? Our firm specializes in streamlining compliance strategies for both new and operating MSBs, helping you focus on what matters most—growing your business. Get in touch with us today to ensure your program is not only compliant but future ready.
