Documentation · Risks

Money laundering

Money laundering disguises the origin of criminal proceeds so they can be used in the legitimate economy. This guide explains the risk, the warning signs regulators and investigators look for, what Canadian and other rules expect, and how to screen for it with Crown Intelligence.

What the risk is

Money laundering is the processing of criminal proceeds to disguise their illegal origin, so the person who committed the crime can use the money without exposing its source. The UN Office on Drugs and Crime describes it as a process that typically moves through three stages [1]:

The stages do not always occur in order or separately. Placement and layering can happen in one step, and the stages can repeat [1]. UNODC estimates that between 2% and 5% of global GDP is laundered each year, but notes that the true figure is hard to measure because the activity is concealed [1]. Treat that figure as an estimate, not a measurement.

In Canada, the Criminal Code makes it an offence to deal with property or its proceeds with intent to conceal or convert it, where the person knows, believes, or is reckless as to whether the property came from a designated offence. The maximum is 10 years' imprisonment, or 14 years where the conduct is for the benefit of, at the direction of, or in association with a criminal organization [2]. A court may infer the required knowledge or recklessness where the way the property was handled is markedly unusual, or where the dealings are inconsistent with lawful activity typical of the sector [2]. That inference rule matters for any business that handles client funds.

How it shows up

Regulators and investigators look for patterns rather than single events. The indicators below are drawn from FINTRAC's guidance for financial entities and from FATF typology work [3][4][5][6]:

• Structuring. Cash or transfers split into amounts below reporting or identification thresholds, across branches, days, or several people acting together. FINTRAC lists this as a common method of committing money laundering [6].
• Fast in and out movement. A cash deposit followed quickly by a wire transfer out, or funds moving in and out of an account on the same day or within a short period [6].
• No apparent purpose. Transactions that are unnecessarily complex for their stated purpose, have no clear business or economic reason, or link parties that would not normally deal with each other, such as a food importer and an automobile parts exporter [6].
• Shell and pass-through entities. A suspected shell entity with no economic or logical reason to exist, accounts used to receive and then send funds on to others, or several entities sharing the same directors or signing authority without a clear reason [6].
• Unexplained change in ownership or activity. A business account whose ownership changes, followed by a rise in transactions with no explanation, or a long-inactive account that suddenly becomes active [6].
• Trade-based laundering. Misstating the price, quantity or quality of imports and exports to move value. FATF notes it is often combined with other techniques and that it becomes more attractive as other channels are tightened [7].
• Professional enablers. Money laundering networks that offer laundering as a fee-based service to several criminal clients, sometimes working with corrupt bankers, lawyers or accountants who provide otherwise legitimate services [8].
• Underground and alternative banking. Hawala and other similar service providers, which move value outside the regulated banking system. FATF published a dedicated report on this in 2026 [4].

No single indicator proves money laundering. FINTRAC is explicit that indicators are one piece of the picture and should be read together with context [6].

What regulators expect

Canada

• The PCMLTFA and its regulations set the core obligations for reporting entities, including record keeping, identity verification, compliance programs, and reporting. The Act was last amended on 26 March 2026 and is current to 21 September 2026 [12].
• Large cash transactions. A report must be filed with FINTRAC when $10,000 or more in cash is received in a single transaction. Multiple cash receipts totalling $10,000 or more within a consecutive 24-hour window can also trigger a report under the 24-hour rule. Reports are due within 15 calendar days of receipt [8].
• Suspicious transactions. Reporting entities must report suspicious transactions to FINTRAC, and FINTRAC publishes indicators to help them recognize these [8][6].
• Client due diligence and records. Reporting entities must verify identity, determine third parties, and keep records that can be produced to FINTRAC [8].

United States

The Bank Secrecy Act requires financial institutions and other businesses to keep records and file reports to help detect and prevent money laundering. These include currency transaction reports for cash transactions above $10,000 (daily aggregate), and reports of suspicious activity. Structuring transactions to evade reporting is prohibited under 31 U.S.C. 5324 [9].

United Kingdom

Regulation 19 of the Money Laundering Regulations 2017 requires relevant persons to establish and maintain risk-based policies, controls and procedures. These must be approved by senior management, reviewed regularly, and must provide for scrutiny of transactions that are unusually complex or large, have an unusual pattern, or have no apparent economic or legal purpose. Regulation 19 was amended on 30 June 2026 [10].

European Union

Directive (EU) 2024/1640 sets out risk assessment duties for Member States and obliged entities. Its recitals state that the results of risk assessments should be made available to obliged entities in a timely way so they can identify, manage and mitigate their own risks [11].

International standard

The FATF Recommendations are the global framework. Their cornerstone is the risk-based approach: countries and firms identify the risks they face and put their resources where the risk is highest [5].

How to screen for it with Crown Intelligence

Money laundering screening combines two things: who the customer or counterparty is (sanctions, politically exposed persons, debarments, enforcement actions, and ownership), and what the business relationship looks like. Crown Intelligence covers the first. The live figures below come from the data service.

Live source counts could not be loaded. Open the data sources page for the current list.

To find sources that cover this risk, search the source directory for terms such as FINTRAC, trade, or enforcement. To screen names across collections, use search. For batch screening and integration, see the developer documentation.

Screening results show that a name appears in a source. They do not show that the person has committed an offence. Review each match against the source record, its date and its publisher before you act.

Checklist

• Keep a written risk assessment for your business and review it on a set schedule.
• Verify the identity of clients and identify beneficial owners and third parties.
• Screen clients, beneficial owners, directors and counterparties against sanctions, PEP and enforcement registers at onboarding and on a regular basis.
• Track cash receipts, including multiple receipts within 24 hours, and file the required reports on time.
• Set rules for structuring, fast in-and-out movement, and sudden changes in account ownership or activity.
• Review trade documents for price, quantity and quality mismatches before you pay or accept payment.
• Record the reason for escalation and the decision taken, and keep the records available for the regulator.
• Train staff on the indicators and on how to escalate internally.

Frequently asked questions

Does a sanctions or PEP match mean someone is laundering money?

No. A match is a reason to check further. It is not a finding. Review the source record, the match quality and the context before you make a decision.

When is a cash report required in Canada?

When you receive $10,000 or more in cash in a single transaction, or two or more cash amounts totalling $10,000 or more within a consecutive 24-hour window where you know the transactions are related. The report is due within 15 calendar days [8].

Can a business be liable for money laundering if it did not know?

Under section 462.31 of the Criminal Code, the offence can be committed by someone who is reckless as to whether property came from crime. The court may infer that knowledge or recklessness where dealings are markedly unusual or inconsistent with the sector's lawful activity [2].

Is trade-based money laundering only a customs issue?

No. FATF treats it as a financial crime risk that involves banks, traders and their advisers. It is often combined with other techniques, so it should be screened alongside payments, ownership and counterparty data [7].

What is a professional money launderer?

An individual, organization or network that, for a fee, launders the proceeds of crime for others. They often work for several criminal clients and may use legitimate services to add a veneer of legitimacy [3].

Does Crown Intelligence file reports for me?

No. Crown Intelligence provides screening data. Your business remains responsible for its own obligations under the rules that apply to it.

Sources

All sources were read on 2026-10-10. Page dates are as shown on the source.

1. UNODC, "Money Laundering" overview. https://www.unodc.org/unodc/en/money-laundering/overview.html (read 2026-10-10)
2. Criminal Code (R.S.C., 1985, c. C-46), section 462.31, current to 2026-09-21. https://laws-lois.justice.gc.ca/eng/acts/C-46/section-462.31.html (read 2026-10-10)
3. FATF, "Professional Money Laundering", report of 26 July 2018. https://www.fatf-gafi.org/en/publications/Methodsandtrends/Professional-money-laundering.html (read 2026-10-10)
4. FATF, "Methods and Trends", listing the 2 Sep 2026 report on professional money laundering, underground banking and hawala and other similar service providers. https://www.fatf-gafi.org/en/topics/methods-and-trends.html (read 2026-10-10)
5. FATF, "The FATF Recommendations". https://www.fatf-gafi.org/en/topics/fatf-recommendations.html (read 2026-10-10)
6. FINTRAC, "Money laundering and terrorist financing indicators: Financial entities". https://fintrac-canafe.canada.ca/guidance-directives/transaction-operation/indicators-indicateurs/fin_mltf-eng (read 2026-10-10)
7. FATF, "Trade-Based Money Laundering". https://www.fatf-gafi.org/en/publications/Methodsandtrends/Trade-basedmoneylaundering.html (read 2026-10-10)
8. FINTRAC, "Reporting large cash transactions to FINTRAC: FINTRAC's compliance guidance". https://fintrac-canafe.canada.ca/guidance-directives/transaction-operation/lctr-doie/lctr-doie-eng (read 2026-10-10)
9. FinCEN, "The Bank Secrecy Act". https://www.fincen.gov/resources/statutes-and-regulations/bank-secrecy-act (read 2026-10-10)
10. The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, regulation 19, as amended on 30 June 2026. https://www.legislation.gov.uk/uksi/2017/692/regulation/19 (read 2026-10-10)
11. Directive (EU) 2024/1640, recitals 13 to 17. https://eur-lex.europa.eu/eli/dir/2024/1640/oj/eng (read 2026-10-10)
12. Proceeds of Crime (Money Laundering) and Terrorist Financing Act (S.C. 2000, c. 17), current to 2026-09-21. https://laws-lois.justice.gc.ca/eng/acts/P-24.501/ (read 2026-10-10)

Citation keys used above: [1] UNODC; [2] Criminal Code s. 462.31; [3] FATF 2018 report; [4] FATF Methods and Trends; [5] FATF Recommendations; [6] FINTRAC financial entities indicators; [7] FATF trade-based money laundering; [8] FINTRAC large cash transactions guidance; [9] FinCEN; [10] UK Regulation 19; [11] EU Directive 2024/1640. The PCMLTFA (source 12) is cited for the amendment and currency dates.

Last updated 2026-10-10