This is Part 2 of a two-part series on the accelerated coming-into-force date of AML/ATF amendments. See Part 1 for insights on the impact to businesses in the financing and leasing sectors (including those in the automobile and high-end luxury industries), factoring businesses, and cheque-cashing businesses, as well as the new voluntary information sharing regime for entities with FINTRAC reporting obligations.
As noted in Part 1 of this series, the federal government recently announced (the "Announcement") that key amendments to the country's anti-money laundering and anti-terrorist financing regulations that were stated to come into force on October 1, 2025, would instead be advanced to come into force on April 1, 2025.
Among these amendments (the "Amendments") were those that implemented a requirement that importers and exporters provide a new declaration to the Canada Border Services Agency ("CBSA") to address trade-based financial crime risks posed by imported and exported goods, including sanctions evasion.
New declaration and record keeping obligations for importers and exporters
As discussed at length in our earlier client alerts, Canada's AML Framework Broadens its Reach with Regulatory Amendments, including New Import/Export Declarations and Records (the "Consultations Alert") and Evasive Maneuvers – New Reporting Obligations and Enforcement Tools for Canada's Economic Sanctions Regime (the "AML-Sanctions Amendments Alert"), the Amendments will require importers and exporters of goods to declare to the CBSA:
- "whether the good are proceeds of crime as defined by subsection 462.3(1) of the Criminal Code or are goods related to money laundering, to the financing of terrorist activities or to sanctions evasion; and
- that the goods are actually being imported or exported, as the case may be." (the "Declaration")
The specific requirements for how the Declaration is to be made, as well as record keeping requirements to support the declaration, is set out in the new Proceeds of Crime (Money Laundering) and Terrorist Financing Reporting of Goods Regulations (the "Reporting Goods Regulations").
The accelerated timeline
The Announcement indicates that the timeline for implementing the Declaration and the Reporting Goods Regulations has been accelerated. When the Amendments were released for public consultation, the Canadian Government indicated that the Declaration was set to be implemented on October 1, 2025.
However, as set out in the Announcement, it is apparent that the Canadian government felt this timeline needed to be accelerated to respond to criticisms from the Trump administration regarding alleged issues regarding the Canadian-U.S. border and transnational criminal networks operating in Canada.
Specifically, the Announcement states that:
The amendments will greatly improve efforts to combat money laundering and its link to transnational crime and drug trafficking, particularly fentanyl, and complement the Government of Canada's Border Plan as well as the recently announced creation of a Canada-U.S. Joint Strike Force to combat organized crime and maintain the integrity of our shared border.
New CBSA powers and penalties
In addition to the Declaration, the Amendments also provide the CBSA with significant new powers. As discussed in the AML-Sanctions Amendments Alert:
- CBSA officers have been granted search and seizure powers related to sanctions evasion, money-laundering and terrorist financing, in line with those in the Customs Act for other failures to abide by Canada's importation regime. These search and seizure powers are available in circumstances where an officer suspects on "reasonable grounds" that a person has concealed goods or has made an inaccurate declaration.
- There are mechanisms for the review and appeal of decisions made by the CBSA with regards to this Declaration and the related sanctions evasion, money-laundering and terrorist financing obligations. These review and appeal provisions are nearly identical to equivalent provisions in the Customs Act, and allow for companies to ultimately appeal decisions made by the CBSA to the Federal Court.
Further, as discussed in the Consultations Alert, the Reporting Goods Regulations establish an administrative monetary penalty ("AMP") scheme for failure to abide the Declaration requirements and other related requirements. Importantly, these civil penalties are assessed on a strict liability basis, unlike the existing criminal penalties for violating Canada's economic sanctions and anti-terrorism legislation.
What's next?
The accelerated timeline for these changes leaves businesses that are impacted with only a few weeks to adjust and ensure they are in compliance.
Further exacerbating the problem, the CBSA has not yet released guidance on the Declaration or the Amendments generally. As discussed in the Consultations Alert, when the Amendments were set to be implemented on October 1, 2025, it was indicated that the CBSA would be issuing guidance "by September 1, 2025" and raising awareness of the new obligations before they came into force. However, with the enactment date for the Declaration and Reporting Goods Regulations less than three weeks away, no such guidance has been issued.
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