Ottawa, March 22, 2012 — The Financial Transactions and Reports Analysis Centre of Canada has assessed an administrative monetary penalty against a savings and credit union. The penalty was imposed for violating the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
- Sharons Credit Union, a savings and credit union in Vancouver, British Colombia, was issued a penalty of $40,520.00 on February 27, 2012, for committing eleven violations:
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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 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.
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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.
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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.
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Failure of a person or entity to institute and document the prescribed review, which is contrary to subsection 9.6(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and paragraph 71(1)(e) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
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Failure of a financial entity to report the receipt 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 12(1)(a) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
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Failure of a financial entity 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 12(1)(c) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
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Failure of a financial entity to keep prescribed records, which is contrary to section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and paragraphs 14(c) and 14(c.1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
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Failure of a specified person or entity to take reasonable measures to obtain and, if obtained, keep a record of prescribed information, which is contrary to section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and subsection 11.1(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
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Failure to take reasonable measures when opening an account to determine if the account is to be used by or on behalf of a third party, which is contrary to section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and subsection 9(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
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Failure of a financial entity to take reasonable measures within the prescribed period to determine whether a person who initiates an electronic funds transfer of $100,000 or more is a politically exposed foreign person, which is contrary to subsection 9.3(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and paragraph 54.2(c) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
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Failure of a financial entity to take reasonable measures within the prescribed period to determine whether a person who is the beneficiary of an electronic funds transfer of $100,000 or more is a politically exposed foreign person, which is contrary to subsection 9.3(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and paragraph 54.2(d) 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
