CIBC Fined C$1.3M by Canadian Anti-Money Laundering Authority

Canadian regulatory authorities imposed a $1.3m penalty on the Canadian Imperial Bank of Commerce (CIBC) for violating anti-money laundering and terrorist financing derivatives. 

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) disclosed in the investigation that CIBC did not comply with ongoing AML measures and failed to submit a report of suspicious transactions. The agency added they did not provide the written information related to significant transfers outside the Country. The penalty against the CIBC is the second of this week by FINTRA previously authorities issued a $7.4 million fine on the Royal Bank of Canada (RBC). They also claimed the suspicious transactions of both banks are related to money laundering and terrorist financing. Although banks admit the allegations but commit they were not involved in any illicit activities. 

FINTRAC investigated a vast range of information gathered from millions of electronic data sources from insurance, banks, and other financial service providers. They found thousands of suspicious reports that agency instances detect related to money laundering, and banks are well known that these clients are criminals as well as politically exposed persons. The chief executive of FINTRAC, Sarah Paquet, stated reporting suspicious transactions is to protect Canadians and secure the integrity of the country’s economy. She 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 CIBC spokesperson stated in the defence that their bank relies on robust technology to comply with money laundering and terrorist financing. He claimed that the investigation from the agency is all about the small number of suspicious transactions which banks have resolved, and it continues focusing on advancement in their system to enhance ongoing monitoring. The CIBC spokesperson, Tom Wallis, stated, “we take our responsibilities seriously and will continue to identify, investigate and do our part to deter and detect financial crimes.” 

Since obtaining the legal ability to regulate the financial industry, FINTRAC has levied over 125 fines on various industries in 15 years. These penalties also surge security in other banks, TD bank stated they are enhancing their AML system to combat financial crimes and secure themselves from regulators’ hefty penalties. TD banks expect fines from the US regulators earlier this year due to deficiencies in their compliance framework. 

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