Are penalties only for businesses caught actually laundering money?

No. This is the single most misunderstood point. Administrative monetary penalties attach to violations of your obligations (no compliance program, no risk assessment, missing records, no training) regardless of whether any money laundering or terrorist financing actually occurred. A clean, honest business with a paper-thin program is still exposed, and under Bill C-12 a program that isn't 'reasonably designed, risk-based and effective' is itself a very serious violation.

Are penalty decisions made public?

Yes. FINTRAC publicly discloses penalties where a serious or very serious violation was committed, or where the total penalty is $10,000 or more, and notices stay on FINTRAC's public website for five years. For a dealership or leasing company, that's a reputational cost layered on top of the financial one.

Is there a way to reduce a penalty once a violation is found?

FINTRAC's penalty framework considers factors like harm, compliance history, and whether the violation was addressed. Bill C-12 also introduced mandatory compliance agreements for prescribed violations where a penalty is imposed. Refusing one, or failing to comply with one, can lead to a compliance order. A business that self-identifies and fixes an issue is in a materially better position than one an examiner has to find it in.

Does the size of my business affect the penalty amount?

FINTRAC is required to consider a reporting entity's ability to pay, and cumulative penalties for multiple violations are capped at the greater of $20 million or 3% of gross global revenue for larger entities. But Bill C-12's roughly 40x increase to the ceilings was specifically aimed at making penalties meaningful for smaller reporting entities too. A small dealership is not automatically capped at a token amount, especially for a very-serious-tier violation like a missing program.

Bill C-12 penalties: what FINTRAC non-compliance actually costs

Bill C-12 raised FINTRAC's penalty ceilings roughly 40-fold and made a missing compliance program a 'very serious' violation on its own. Here's the real tiered structure and what it means for a dealership or leasing company.

Bill C-12 (the Strong Borders Act), which received royal assent on March 26, 2026, substantially rewrote FINTRAC's penalty framework, and the change matters most for exactly the businesses newly in scope since April 1, 2025, whose enforcement grace year ended April 1, 2026: smaller dealerships and leasing companies who may have assumed penalties were a big-bank problem, or who are still picturing the old, much smaller numbers.

The new tiered structure

FINTRAC classifies violations into three severity tiers. Bill C-12 raised the ceiling for each tier by roughly a factor of 40:

Tier	New maximum (per violation)
Minor	$40,000
Serious	$4,000,000
Very serious	$20,000,000

Cumulative penalties across multiple violations are capped at the greater of $20 million or 3% of gross global revenue for entities above $20 million in revenue: not a limit most dealerships or leasing companies will approach, but it signals how seriously the framework now treats repeated or compounding failures.

The important detail: $40,000 is the ceiling for the lightest tier (paperwork-level issues), not a "minimum" or a typical outcome for a missing program. Bill C-12 explicitly added a requirement that a compliance program be "reasonably designed, risk-based and effective," and failing that standard (which describes a missing or paper-only program) is classified as a very serious violation, putting the real exposure for the most common finding (see our five-element compliance program guide) up to $20 million, not $40,000.

Penalties don't require wrongdoing

The most important thing to understand about this framework: administrative monetary penalties are not a proxy for catching a criminal. They attach to failing to meet your own obligations as a reporting entity: an unappointed compliance officer, an unwritten risk assessment, a client file missing proper identification. A business that has never processed a suspicious dollar in its history can still be penalized for not having a program that could catch one.

What drives the amount within a tier

Within a violation's tier, FINTRAC's penalty policy considers factors including:

The nature and harm of the violation.
Whether it's a first occurrence or part of a pattern.
The entity's compliance history: a business found deficient once and never remediating is treated differently than one that self-corrects.
The entity's ability to pay, which Bill C-12 now requires FINTRAC to factor in.

New under Bill C-12: mandatory compliance agreements

Where a penalty is imposed for certain prescribed violations, the reporting entity is now required to enter into a mandatory compliance agreement with FINTRAC: a documented plan and deadline for fixing the gap. Refusing to sign one, or failing to comply with one, can lead to a formal compliance order. The penalty is no longer the end of the process; it comes bundled with an enforced remediation timeline.

Publication is part of the cost

FINTRAC publicly discloses penalties where a serious or very serious violation was committed, or where the total penalty reaches $10,000, and keeps the notice public for five years. For a dealership that depends on local reputation and lender relationships, a public compliance finding can carry a cost well beyond the dollar figure.

The cheapest way to handle this

Building and maintaining a real compliance program (a named officer, written procedures, a documented and current risk assessment, evidence captured on every deal, tracked training) costs far less than even a minor-tier penalty, and it's the direct answer to the "reasonably designed, risk-based and effective" standard that determines whether a program-level finding lands in the $40,000 tier or the $20,000,000 one.

Start with the free 12-item readiness checklist to see where your exposure is, or see how Provasure keeps the evidence built automatically instead of reconstructed under deadline.

Sources: FINTRAC's administrative monetary penalties policy is at fintrac-canafe.canada.ca/pen/2-eng. Penalty figures and framework details reflect Bill C-12 as of its March 26, 2026 royal assent and are subject to further regulation. Verify current amounts against official guidance or counsel before relying on this summary.

This article is general regulatory information, not legal advice. Requirements depend on your business: verify against FINTRAC's official guidance or counsel.