Canada’s financial intelligence agency said it imposed a $7.4-million penalty against the Royal Bank of Canada for non-compliance with anti-money laundering and terrorist financing measures.
The Financial Transactions and Reports Analysis Centre of Canada says the violations include failing to submit suspicious transaction reports where there were reasonable grounds to suspect ties to a money laundering offence.
RBC failed to submit 16 suspicious transaction reports out of 130 case files reviewed, the agency said.
The agency, known as Fintrac, said the administrative penalty was imposed on Nov. 3 following a compliance examination in 2022.
“We chose not to appeal but believe the fine is not at all commensurate with an administrative matter where there is no connection to money laundering or terrorist financing offences,” RBC told CBC News in a statement.
“Equally important, there is no finding that anyone exercised judgment in bad faith or knowingly contributed to violations.”
RBC’s penalty was imposed under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, and not for criminal offences for money laundering or terrorist activity financing.
Agency upping anti-money laundering vigilance
Fintrac tries to pinpoint money linked to illicit activities by electronically sifting millions of pieces of information each year from banks, insurance companies, money services businesses and others.
It then discloses intelligence to police and other law-enforcement agencies about the suspected cases.
Fintrac director Sarah Paquet said in a recent speech that the agency’s priority is to work with businesses to help them comply with their reporting obligations.
But she clearly flagged that some were falling behind and that Fintrac would take appropriate action when needed.
Recently, the agency has increased anti-money laundering vigilance.
“What we’re seeing is, Fintrac is taking a different approach and they have in the past … I don’t think there are going to be any more free passes,” said Garry Clement, financial crime prevention expert and CEO of Clement Advisory Group.
The penalty, a rarity among Canadian banks, comes after Toronto Dominion, the country’s second biggest bank, this year said it was being investigated by the U.S. Justice Department for anti-money laundering compliance south of the border.
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