FINTRAC Penalises Toronto MSB Over AML and Reporting Breaches

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has imposed an administrative monetary penalty of $67,150 on Juba Express Inc., a Toronto-based money services business, following a compliance examination that identified multiple breaches of Canada’s anti-money laundering and counter-terrorist financing framework. The penalty, issued on August 29, 2025, relates to violations of Part 1 of the Proceeds of Crime, Money Laundering, and Terrorist Financing Act and its associated Regulations. FINTRAC found that the company failed to meet several core compliance obligations, including deficiencies in its AML/CTF compliance program, weaknesses in its risk assessment processes, and failures to meet mandatory transaction reporting requirements. The enforcement action reflects the regulator’s continued focus on ensuring that reporting entities, particularly those operating in higher-risk sectors such as money services businesses, comply fully with the controls designed to protect Canada’s financial system from illicit activity.

Under the Proceeds of Crime, Money Laundering, and Terrorist Financing Act, all reporting entities are required to establish, implement, and maintain a comprehensive and effective AML compliance program that is documented, approved by senior management, and kept up to date as business operations and risks evolve. FINTRAC determined that Juba Express Inc. did not meet this standard, identifying shortcomings in its written compliance policies and procedures, which are intended to guide employees on key obligations such as record keeping, client identification, and regulatory reporting. The absence of clearly defined and properly approved policies leaves a business without a functional compliance framework, increasing its vulnerability to exploitation by criminals seeking to launder proceeds of crime or finance terrorism. FINTRAC regarded these deficiencies as serious, as they undermine the fundamental objectives of the Canadian AML/CTF regime.

A further significant failing related to the company’s obligation to assess and document its money laundering and terrorist financing risks. The legislation requires reporting entities to conduct a formal risk assessment that takes into account prescribed factors relevant to their activities, including customer types, products and services offered, delivery channels, and geographic exposure. This assessment forms the foundation of a risk-based approach, informing the level of due diligence, monitoring, and controls that must be applied. FINTRAC concluded that Juba Express Inc. did not properly carry out this requirement, leaving it without a clear understanding of the specific risks inherent in its operations. An inadequate or missing risk assessment prevents a money services business from tailoring its controls appropriately and creates conditions in which higher-risk transactions may not be identified or examined with sufficient scrutiny. These weaknesses represented a systemic failure in the business’s first line of defence against financial crime.

Canada’s AML/CTF framework is structured to detect and deter the key stages of money laundering—placement, layering, and integration—by obligating reporting entities to maintain audit trails and submit reports on certain types of transactions. Money services businesses are particularly exposed to misuse during the placement and layering stages because they often handle cash transactions and facilitate electronic funds transfers, including cross-border remittances. For this reason, their reporting obligations are considered critical to the effectiveness of the national financial intelligence system.

FINTRAC found that Juba Express Inc. failed to comply with mandatory transaction reporting requirements, a central component of the regulatory regime. Specifically, the company did not submit required Electronic Funds Transfer Reports (EFTRs) and Large Cash Transaction Reports (LCTRs) for transactions exceeding the $10,000 reporting threshold. Electronic funds transfers of $10,000 or more, whether incoming or outgoing, must be reported to FINTRAC because they are a common method for moving funds across borders during the layering stage of money laundering. Similarly, large cash transactions at or above the same threshold are essential indicators during the placement stage and must also be reported. The failure to submit these reports deprived FINTRAC of timely and accurate information needed to identify patterns of suspicious activity and to support law enforcement and national security investigations.

When reporting thresholds are consistently missed, it points to deeper weaknesses in transaction monitoring and record-keeping systems. In the context of a money services business that enables rapid movement of funds, including internationally, such gaps can significantly impair Canada’s ability to detect and disrupt money laundering and terrorist financing networks. FINTRAC emphasised that these reporting failures are not merely administrative oversights but represent serious vulnerabilities that can be exploited by criminals to move illicit funds through the formal financial system without detection.

In addition to the deficiencies in its AML program and transaction reporting, Juba Express Inc. was also cited for failing to notify FINTRAC of changes to its registration information. All money services businesses are required to register with FINTRAC and to keep their registration details current, including changes related to ownership, services, or business structure. This obligation is essential for regulatory transparency and effective supervision. Failure to update registration information creates gaps in accountability and hampers FINTRAC’s ability to understand who controls a business and what activities it conducts, further weakening oversight of the sector.

The administrative monetary penalty of $67,150 was imposed as a proportionate and dissuasive response to the scope and seriousness of the violations identified. FINTRAC categorises violations according to their severity, and failures involving foundational elements such as compliance policies, risk assessments, and mandatory reporting are generally treated as serious because of the elevated money laundering risk they create. For money services businesses, which already face heightened inherent risk due to their role in handling cash and cross-border transfers, regulatory expectations for effective AML controls are particularly stringent. The penalty serves as a warning to the sector that incomplete or passive compliance approaches will result in tangible enforcement consequences.

Beyond the immediate financial impact, non-compliance can expose money services businesses to broader repercussions, including reputational harm, enhanced regulatory scrutiny, compliance agreements, or, in extreme cases, deregistration, which would prevent the entity from operating legally. FINTRAC has repeatedly stressed that compliance programs must be operational and effective in practice, not merely documented on paper. The increasing frequency and scale of enforcement actions, including the twenty-three Notices of Violation issued in the 2024–25 period with total penalties exceeding $25 million, illustrate a sustained trend toward tougher supervision and a low tolerance for systemic weaknesses across all regulated sectors.

The case of Juba Express Inc. highlights the interconnected nature of AML compliance obligations and the way deficiencies in one area can cascade into broader failures. An inadequate risk assessment can undermine transaction monitoring, while weak policies and procedures can lead to reporting lapses and governance breakdowns. For money services businesses, the lesson is clear: maintaining a proactive and continuously evolving compliance posture is essential. This includes investing in staff training, implementing reliable systems for monitoring and reporting transactions, conducting regular audits, and ensuring that all regulatory information remains accurate and up to date.

FINTRAC’s enforcement action reinforces the principle that AML and counter-terrorist financing obligations are not optional or secondary considerations but a core responsibility of doing business in Canada’s financial sector. By holding reporting entities accountable, the regulator aims to strengthen the collective defence against money laundering and terrorist financing, protect the integrity of the financial system, and safeguard the broader Canadian economy from the harms associated with illicit finance.

By fLEXI tEAM