September 22, 2010
Ottawa, September 22, 2010 – The Financial Transactions and Reports Analysis Centre of Canada has assessed administrative monetary penalties against two money services businesses. The penalty was imposed for violating the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
- Sutlej Foreign Exchange Inc., engaged in the business of a money services business in Mississauga, Ontario, was issued a penalty of $ 8,450 on July 26, 2010, for committing six violations:
- Failure of a person or entity to develop and apply written compliance policies and procedures that are kept up to date and, in the case of an entity, are approved by a senior officer, which is contrary to subsection 9.6(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and paragraph 71(1)(b) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
- Failure of a person or entity to assess and document the risk referred to in subsection 9.6(2) of the Act, taking into consideration prescribed factors, which is contrary to subsection 9.6(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and paragraph 71(1)(c) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
- Failure of a person or entity that has employees, agents or other persons authorized to act on their behalf to develop and maintain a written ongoing compliance training program for those employees, agents or persons, which is contrary to subsection 9.6(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and paragraph 71(1)(d) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
- Failure of a money services business to report the sending out of Canada of an electronic funds transfer of $10,000 or more in the course of a single transaction, together with the prescribed information, which is contrary to subsection 9(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and paragraph 28(1)(b) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
- Failure of a money services business to report the receipt from outside Canada of an electronic funds transfer of $10,000 or more in the course of a single transaction, together with the prescribed information, which is contrary to subsection 9(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and paragraph 28(1)(c) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
- Failure of a money services business to keep prescribed records, in accordance with section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and section 30 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
- Nazar Singh Mangat, also operating as Manny Foreign Exchange Inc. and Manny Foreign X-Change, engaged in a money services business in Calgary, Alberta, was issued a penalty of $ 7,370 on July 23, 2010, for committing six violations:
- Failure of a person or entity to develop and apply written compliance policies and procedures that are kept up to date and, in the case of an entity, are approved by a senior officer, which is contrary to subsection 9.6(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and paragraph 71(1)(b) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
- Failure of a person or entity, to assess and document the risk referred to in subsection 9.6(2) of the Act, taking into consideration prescribed factors, which is contrary to subsection 9.6(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and paragraph 71(1)(c) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
- Failure of a money services business to report the sending out of Canada of an electronic funds transfer of $10,000 or more in the course of a single transaction, together with the prescribed information, which is contrary to subsection 9(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and paragraph 28(1)(b) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
- Failure of a money services business to report the receipt from outside Canada of an electronic funds transfer of $10,000 or more in the course of a single transaction, together with the prescribed information which is contrary to subsection 9(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and paragraph 28(1)(c) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
- Failure of a money services business to report the receipt from a client of an amount in cash of $10,000 or more in the course of a single transaction, together with the prescribed information, which is contrary to subsection 9(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and paragraph 28(1)(a) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
- Failure of a person or entity that is required to ascertain the identity of a person to set out prescribed information on the appropriate records in respect of the person, which is contrary to section 6.1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and section 67 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
A number of business sectors in Canada are required to keep certain records, identify clients, maintain compliance regimes, and submit reports to FINTRAC consistent with their obligations under the PCMLTFA. These sectors include banking, life insurance, trusts, securities, real estate credit unions, casinos and money services businesses. Money services businesses also have the obligation to register their business with FINTRAC.
FINTRAC has had the authority to issue administrative monetary penalties in response to non-compliance with the PCMLTFA and related regulations since December 30, 2008. Penalties are used as a last recourse after other measures to ensure compliance with the law have been exhausted.
Administrative monetary penalties serve as an adjunct to existing criminal penalties. Both criminal and civil penalties cannot be issued against the same instances of non-compliance. Violations are classified as "Minor", "Serious" or "Very Serious", and carry maximum penalties of $1,000, $100,000 and $500,000 respectively.
FINTRAC remains committed to working with reporting entities in ensuring compliance with the PCMLTFA and related regulations. The new penalties are a tool to encourage compliance.
FINTRAC is an independent federal government agency with a mandate to assist in the detection, deterrence and prevention of money laundering and the financing of terrorist activities. FINTRAC analyzes financial transaction reports and discloses financial intelligence to law enforcement and CSIS where it has reasonable grounds to suspect that the information would assist in the investigation of money laundering and terrorist activity financing offences or threats to the security of Canada.
FINTRAC is part of Canada's Anti-Money Laundering and Anti-Terrorist Activity Financing Initiative. The initiative is led by the Department of Finance and includes the RCMP, CSIS, Public Safety Canada, Canada Revenue Agency, Canada Border Services Agency, Communications Security Establishment Canada and the Department of Justice.
Additional information can be found at the Administrative monetary penalties section.
Media Contact:
Peter Lamey
FINTRAC Communications Directorate
613-943-3399
