FATF/APG Mutual Evaluation Report of Canada 2026

• Canada faces material money laundering risks driven by major profit-generating crimes. Money laundering in the country is mainly linked to proceeds from drug trafficking, fraud, commercial trade fraud and tax crimes, often involving organised crime groups and professional money laundering intermediaries.
• Through successive National Risk Assessments, Canada has developed a mature and nuanced understanding of its money laundering and terrorist financing threats and vulnerabilities. The report shows that Canada has a strong multi-layered inter-agency co-ordinating mechanism, which has taken significant measures to mitigate the jurisdiction’s highest money laundering threats through operational reforms and initiatives.
• Canada applies a risk-based approach to its AML/CFT framework, with enhanced measures for higher risk areas and simplified measures or exemptions permitted for lower risk areas. However, the National Risk Assessment provides limited identification of lower risk sectors, limiting country’s ability to enable simplified measures where risks are lower.

• The assessment finds that Canada has a sound legal framework for international co-operation, supported by a wide network of bilateral and multilateral treaties.
• When receiving co-operation requests, Canada demonstrates constructive engagement with foreign counterparts, including through liaison officers, bilateral and multilateral consultations, and the provision of guidance, templates and mock cases to facilitate co-operation.
• However, overall effectiveness is diminished by persistent timeliness challenges, particularly in mutual legal assistance and asset recovery cases.

• Canada’s AML supervisor FINTRAC demonstrates a good understanding of risks affecting financial institutions (FIs) and virtual asset service providers (VASPs), and has taken steps to enhance its risk-based supervision.
• However, there are constraints related to model design, with a significant proportion of FIs and VASPs not being subject to an entity-level risk assessment. The report also finds that supervisory frequency and intensity of the different sectors are not always in line with the assessed risk.
• For Designated Non-Financial Businesses and Professions, Canada focuses its supervision on higher risk entities. This limits the country’s overall coverage and enforcement, leaving certain sectors vulnerable, notably Dealers in Precious Metals and Stones (DPMS) and real estate.

• Since its last mutual evaluation, Canada has considerably advanced its framework for beneficial ownership transparency.
• The country applies a multi-pronged approach to accessing BO information, enabling authorities to access it in a timely manner and supporting investigative needs.
• The assessment however finds that the overall effectiveness is impacted by uneven implementation across provinces and territories.

• Canada demonstrates a strong capacity to access, develop, and use financial intelligence in support of money laundering and terrorist financing investigations.
• FINTRAC produces high quality operational and strategic intelligence that is actively used by authorities, supporting investigations into high-risk predicate offences such as fraud and drug trafficking.
• Although law enforcement agencies have access to FINTRAC intelligence through proactive disclosures and the Voluntary Information Record mechanism, lengthy response times in non-urgent cases reduces the timeliness of financial intelligence.
• This has resulted in law enforcement agencies increasingly relying on alternative proactive intelligence gathering techniques, in attempts to enable faster access to financial information and more targeted use of investigative powers.

• The report shows that Canada identifies and investigates money laundering to a large extent in line with its risk profile. Financial investigations are systematically embedded in case prioritisation, particularly within Royal Canadian Mounted Police Federal Policing, ensuring that major cases are supported by parallel financial enquires.
• Despite strong investigative capacity, Canada faces persistent challenges in prosecuting professional money laundering, particularly in standalone cases where predicate offences cannot be prosecuted. Laundering Proceeds of Crime (LPOC) cases involving third party laundering are high-value and sophisticated, but difficult to prove.

• Canada recovers proceeds of crime to some extent, with clear improvements in prioritisation and capacity during the assessment period. Asset recovery is increasingly treated as a core policing function, supported by dedicated resources, specialised units, and a growing culture of parallel financial investigations.
• However, operational and legal constraints continue to limit the securing and recovery of assets, particularly in complex cases. Compensation of victims from confiscated assets occurs to some extent but remains inconsistent.
• Canada’s use of Property of Corresponding Value (PoCV) confiscation is very limited. The evaluation found that fines in lieu of forfeiture are not subject to provisional measures, cannot be directly enforced against PoCV, and lack effective incentives or enforcement mechanisms. As a result, value-based confiscation does not meaningfully mitigate situations where criminal property cannot be directly restrained or has dissipated.

• The assessment shows that Canada has a well-established and effective system to detect and investigate terrorist financing. While the number of terrorist financing-related prosecutions remains low, the jurisdiction has the necessary mechanisms to prosecute cases effectively as they arise, in line with its terrorist financing threat environment.
• Canada implements proliferation financing targeted financial sanctions (PF-TFS) without delay and has demonstrated a sound understanding of its proliferation financing risks. Although financial institutions and VASPs largely understand and comply with PF-TFS obligations, understanding is more uneven among DNFBPs.

Following the assessment, Canada received a roadmap of Key Recommended Actions to complete within three years. These include strengthening the effectiveness of risk-based supervision, including of DNFBPs, continuing to progress implementation of a pan-Canadian corporate beneficial ownership framework, prioritising investigation and prosecution of complex professional and standalone money laundering cases in line with the country’s risk profile, and expanding asset recovery.

Based on Effectiveness and Technical Compliance Ratings, Canada is placed in regular follow-up. Canada will report back to the FATF on its progress.