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FINTRAC Ministerial Directives: A 2026 Guide for Canadian MSBs

5–7 minutes

FINTRAC Ministerial Directives are legally binding measures that require Canadian reporting entities to apply specific controls to transactions connected with designated foreign jurisdictions or entities.

For money services businesses (MSBs), payment companies, fintechs, and virtual currency businesses, these directives can affect customer due diligence, transaction monitoring, recordkeeping, identity verification, and regulatory reporting.

As of 2026, active Ministerial Directives apply to transactions involving Russia, Iran, and the Democratic People’s Republic of Korea (North Korea). Each directive has its own requirements, so MSBs should not treat them as a single generic high-risk-country rule.

What Is a FINTRAC Ministerial Directive?

Under Canada’s anti-money laundering and anti-terrorist financing framework, the Minister of Finance can issue a directive when a foreign jurisdiction or entity presents heightened money laundering or terrorist financing risks.

A directive may require reporting entities to take measures beyond their standard AML procedures. Depending on the directive, these measures may include:

  • verifying the identity of clients or other parties to a transaction;
  • treating specified transactions as high risk;
  • applying enhanced customer due diligence;
  • establishing the source of funds or virtual currency;
  • determining the purpose of a transaction;
  • identifying beneficial ownership information;
  • keeping additional records; and
  • filing reports with FINTRAC.

The exact obligations vary by jurisdiction. An MSB should review the wording of each applicable directive and the related FINTRAC guidance before processing affected transactions.

Which FINTRAC Ministerial Directives Are in Effect in 2026?

According to FINTRAC, three country-related Ministerial Directives are currently in force.

Russia

The directive concerning certain transactions associated with Russia took effect on February 24, 2024, and was updated on March 22, 2025.

MSBs should ensure that their screening, risk assessment, transaction review, recordkeeping, and reporting procedures reflect the requirements that apply to covered transactions connected with Russia.

Iran

The directive concerning Iran took effect on July 25, 2020, and was updated on November 17, 2025. FINTRAC’s related compliance guidance and reporting instructions were subsequently updated on June 23, 2026.

The directive requires reporting entities to apply prescribed measures to applicable transactions connected with Iran. These measures include treating covered transactions as high risk and completing the required identity verification, due diligence, recordkeeping, and reporting steps.

Democratic People’s Republic of Korea (North Korea)

The directive concerning North Korea took effect on December 9, 2017, and was updated on March 22, 2025.

FINTRAC states that transactions originating from or destined for North Korea must be treated as high risk, regardless of the transaction amount. Reporting entities must apply the measures specified in the directive and related guidance.

Ministerial Directives remain in force until they are revoked, suspended, or amended. They are also reviewed at least once every three years.

Why FINTRAC Ministerial Directives Matter for MSBs

MSBs often process cross-border transfers, foreign exchange transactions, remittances, payments, and virtual currency transactions. This can create direct or indirect exposure to jurisdictions covered by Ministerial Directives.

Even when an MSB does not intentionally serve customers in a designated country, an affected transaction may still arise through:

  • the sender or recipient;
  • a beneficiary or beneficial owner;
  • an intermediary financial institution;
  • a payment corridor;
  • an IP address, address, telephone number, or identification document;
  • the source or destination of funds or virtual currency; or
  • other geographic or transactional indicators.

For this reason, a general statement such as “we do not serve sanctioned countries” is not enough. An MSB needs documented procedures showing how relevant exposure is identified, reviewed, escalated, recorded, and reported.

What FINTRAC Expects MSBs to Document

FINTRAC enforcement actions show that having a generic high-risk-country policy may not satisfy Ministerial Directive requirements.

In one administrative monetary penalty published in 2026, FINTRAC identified failures involving electronic funds transfer reports connected with Iran and deficiencies in policies and procedures relating to the applicable directive. In another 2026 case, FINTRAC cited inadequate documentation describing how the reporting entity would identify transactions subject to Ministerial Directives and what steps it would take.

The practical lesson is clear: an MSB’s compliance program should explain not only that Ministerial Directives exist, but also how staff and systems will apply them in day-to-day operations.

Common Ministerial Directive Compliance Gaps

Common weaknesses may include:

  • referring generally to high-risk jurisdictions without naming active directives;
  • failing to distinguish the requirements of one directive from another;
  • relying only on customer nationality or residence;
  • failing to screen senders, recipients, beneficiaries, and beneficial owners;
  • not documenting geographic indicators and indirect exposure;
  • incomplete source-of-funds or source-of-virtual-currency procedures;
  • missing escalation and approval steps;
  • incomplete transaction records;
  • unclear FINTRAC reporting procedures; and
  • policies that are not updated when directives or guidance change.

These gaps can create regulatory exposure even when the MSB has a broader AML compliance program in place.

Practical Steps for Canadian MSBs

Canadian MSBs should consider the following actions:

1. Review current directives and FINTRAC guidance

Confirm which Ministerial Directives are currently in force and identify the exact measures required under each one.

2. Update AML policies and procedures

Create a dedicated section for Ministerial Directives rather than relying only on a general high-risk-jurisdiction policy.

3. Map relevant geographic indicators

Document how the business identifies direct and indirect links to covered jurisdictions across customers, counterparties, beneficiaries, payment routes, financial institutions, and transaction data.

4. Configure screening and monitoring controls

Ensure that manual reviews and automated systems can detect relevant geographic and transactional indicators. Test these controls regularly.

5. Define enhanced due diligence requirements

Specify when identity verification, source-of-funds review, beneficial ownership checks, transaction-purpose analysis, senior approval, or other measures are required.

6. Establish reporting and recordkeeping procedures

Document what information must be recorded, which FINTRAC reports may be required, who is responsible for filing them, and how deadlines will be monitored.

7. Train staff and retain evidence

Provide role-specific training and keep evidence of completed reviews, decisions, escalations, reports, and policy updates.

8. Reassess controls when requirements change

Ministerial Directives and related guidance can be amended. Assign responsibility for monitoring FINTRAC updates and revising the compliance program when necessary.

Why This Is Especially Important in 2026

FINTRAC continues to emphasize effective, risk-based compliance programs and documented operational controls. At the same time, cross-border payments, fintech services, and virtual currency activity continue to increase the complexity of identifying jurisdictional exposure.

For MSBs, Ministerial Directive compliance should therefore be an active operational process—not a paragraph added to an AML manual and left unchanged.

Key Takeaway

FINTRAC Ministerial Directives create specific legal obligations for transactions connected with designated jurisdictions. Canadian MSBs should maintain clear, jurisdiction-specific procedures for detecting affected activity, applying enhanced measures, keeping records, and completing required reports.

Canada Compliance supports MSBs, payment companies, fintechs, and virtual currency businesses with reviews of AML policies, risk assessments, transaction-monitoring controls, and procedures related to FINTRAC Ministerial Directives.

Need help strengthening your MSB compliance program? Contact Canada Compliance for support reviewing and updating your AML policies, risk assessment, and compliance procedures in line with current FINTRAC requirements, including applicable Ministerial Directives.

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