The Financial Transactions and Reports Analysis Centre of Canada (Fintrac) has issued a $601,139.80 fine to the Saskatchewan-based First Nations Bank of Canada for five violations of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
The five administrative violations found at First Nations Bank of Canada were:
• Failure to submit suspicious transaction reports where there were reasonable grounds to suspect that transactions were related to the commission or attempted commission of a money laundering or a terrorist activity financing offence.
• Failure 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.
• Failure to assess and document the risk of a money laundering or terrorist financing offence.
• Failure of a person or entity to take prescribed special measures.
• Failure to conduct ongoing monitoring of business relationships.
The violations are related to oversight of suspicious transactions, assessments of high-risk clients, and reporting requirements, which the bank has accepted, assuring that its policies and procedures have improved since the compliance investigation.
“First Nations Bank of Canada failed to submit suspicious transaction reports in 31 percent of the case files reviewed by Fintrac, where there were reasonable grounds to suspect that one or more transactions were related to the commission or attempted commission of a money laundering or terrorist activity financing offence,” according to Fintrac’s violation summary.
The agency’s investigation, which looked at transactions made between January 1, 2023 and December 31, 2023, identified gaps in the bank’s policies and procedures regarding monitoring and reporting of suspicious transactions and high-risk clients, which have since been improved upon with the support of compliance experts.
To comply with Canada’s Proceeds of Crime and Terrorist Financing Act, businesses such as casinos, financial institutions, and real estate brokers are required to keep records, identify clients, and report suspicious financial transactions to Fintrac, which uses the information to support the efforts of law enforcement and security agencies in the interest of Canada’s security.
“We consider an administrative monetary penalty to be effective when the penalty amount is proportional to the harm done and prompts a change in behaviour toward future compliance,” according to Fintrac’s website.
