Contributing Lawyers

Canada

Cyndee Todgham Cherniak

United States

Susan Kohn Ross

Australia

Andrew Hudson



Canada's FINTRAC Announces $36,100 Penalty Issued Against BC Company

On March 18, 2010, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) issued a press release in which it announced the imposition of administrative monetary penalties in the amount of $36,100 against Bharat Money Exchange Ltd., engaged as a money services business in Surrey, British Columbia. On November 23, 2009, FINTRAC imposed the penalties for 10 violations of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). The stated violations are as follows:

  • 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 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.

  • 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.

  • 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.

  • Failure to provide, in accordance with a served notice, documents or other information reasonably required by an authorized person, which is contrary to subsection 63.1(2) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

  • Failure of an applicant or a registered person or entity to submit an application for registration in the prescribed manner and with the prescribed information, in accordance with subsection 11.12(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and sections 4(a) and 5 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Registration Regulations.

  • Failure of a money services business to report the sending out of 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 28(1)(b) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.

  • Failure of a person or entity that is required to obtain, keep or create records to retain those records for a period of at least five years, which is contrary to section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and subsection 69(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.

  • Failure of a money services business to keep prescribed records, in accordance with section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and section 30 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.

  • Failure of a money services business to ascertain in the prescribed manner and within the prescribed period the identity of every person who conducts a transaction for the remittance or transmission of $1,000 or more, in accordance with section 6.1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and paragraphs 59(1)(b), 64(1), and 64(2)(b) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.

  • Failure of a person or entity that is required to ascertain the identity of a person to set out prescribed information on the appropriate records in respect of the person, which is contrary to section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and section 67 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.

This announcement is one of many over the 15 months since FINTRAC was given the power to issue such penalties.

A number of business sectors have reporting 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.

For more information about FINTRAC administrative monetary penalties, please go to the following link - http://www.fintrac-canafe.gc.ca/pen/2-eng.asp

For more information about compliance, please contact Cyndee Todgham Cherniak at 416-307-4168.

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