Canadian Anti-Money Laundering Agency Fines RBC $7.4M

Canada’s anti-money laundering regulatory body imposed a C$7.4 million penalty on the Royal Bank Canada (RBC) for failure to comply with AML regulations and reporting suspicious transactions. 

According to the Financial Transactions and Reports Centre (FINTRAC), RBC violated anti-money laundering laws by failing to submit a report of suspicious transactions. The FINTRAC stated the penalty was imposed following the November 3rd 2022, investigation against RBC for breaking ties with anti-money laundering and terrorist financing. The agency claimed that suspicious transactions of a significant amount were used in illicit activities and disguised through electronically shifting various pieces of information from banks, insurance companies, and businesses. Furthermore, the report disclosed that FINTRAC investigated 136 transactions, of which 16 were suspicious. RBC did not report these when there were signs that these dealings involved money laundering and terrorist financing. 

The Royal Bank officials asserted they were not going against the decision, but the fine does not show that their administration was involved with these money launderers. RBC stated, “We chose not to appeal but believe the fine is not commensurate with an administrative matter where there is no connection to money laundering or terrorist financing offences. Equally important, no finding exists that anyone exercised judgement in bad faith or knowingly contributed to violations.” 

The agency added those deals detected by the bank but failed to submit a report to the FINTRAC for further investigation against these transactions. They also claimed the bank was not keeping records and upholding the latest AML measures. FINTRAC director Sarah Paquet asserts that the agency will continue to support financial institutes and businesses to comply with obligations under international laws. The director stated, “We will also be firm in ensuring that businesses continue to do their part, and we will take appropriate actions when they are needed.” The agency specified that these fines are not to demotivate businesses. However, these are meant to change the behaviour of the companies and enhance their security by complying with risk assessment, identity verification, or various AML derivatives. The Canadian regulatory body has fined over 150 companies since it received the legislative authority to do so for 15 years. The financial crime prevention expert, Garry Clement, warned, “What we’re seeing is FINTRAC taking a different approach, and they have in the past… I don’t think there will be any more free passes.”

Suggested Reads: 

CANADA’S FEDERAL GOVERNMENT ANNOUNCES PUBLIC CONSULTATION REGARDING A NEW FRAMEWORK FOR DIGITAL IDENTITY

CANADA’S MP INTRODUCES PRIVATE MEMBER’S BILL TO AMEND CRIMINAL CODE

CANADA TO UPDATE AML LAWS FOR PAYMENTS SERVICES, FINTECHS AND CROWDFUNDING PLATFORMS