FINTRAC offers more detail on enforcement activity

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is being more open about the misconduct underlying its penalties.

Earlier this month, FINTRAC imposed a $7.5-million penalty on Royal Bank of Canada and a $1.3-million penalty against CIBC for violations of anti-money laundering (AML) rules uncovered in recent compliance exams.

On Friday, FINTRAC said it’s begun providing more detailed information about the compliance failures underlying its penalties.

“Prior to December 2023, FINTRAC had taken a more restrictive approach regarding the information it provided in its public notices on the nature of violations committed by reporting entities,” the agency said.

However, citing a “longstanding request from industry for greater information on the administrative monetary penalties imposed on reporting entities,” along with its pledge to improve transparency, FINTRAC said it is now providing increased detail on the nature of violations in public notices.

“Providing additional details on the nature of violations will help better educate reporting entities and the public about FINTRAC’s compliance and enforcement activities, and strengthen FINTRAC’s ability to foster compliance,” it said.

Additionally, in the wake of a public consultation by the federal Finance department last summer to consider improvements to the AML regime, FINTRAC stated, “the government may take additional actions to introduce legislative and regulatory amendments.”

That consultation contemplated increasing enforcement transparency, noting that regulators such as the Financial Consumer Agency of Canada and other AML agencies (including the U.S. Financial Crimes Enforcement Network) are more forthcoming.

These other regulators “make use of public notices to communicate the basis for violations and penalties imposed to give an indication of their size, scope and magnitude, as well as prescribed remedial measures and final decisions made by adjudicators of penalties,” the consultation paper said.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.