FINTRAC levies $1.3-million penalty against CIBC

The agency, known as Fintrac, says it imposed the penalty over CIBC’s failure to submit a suspicious transaction report when there were grounds to suspect it was related to money laundering or terrorist activity, and failures to report information related to large money transfers from outside Canada.

Fintrac tries to pinpoint money linked to illicit activities by electronically sifting through 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 said that during its 2021 examination, it found an instance where CIBC didn’t file a suspicious transaction report even though it knew the client had been arrested and charged with criminal offences. The agency’s review also found over a thousand instances, out of a sample of 20,000, where information related to money transfers was incomplete.

Sarah Paquet, chief executive of the agency, said in a statement that the rules around reporting are in place to protect Canadians and the security of the economy.

“We will also be firm in ensuring that businesses continue to do their part and we will take appropriate actions when they are needed,” she said.

CIBC spokesman Tom Wallis said in a statement that the bank has robust anti-money laundering and anti-terrorist financing procedures and practices in place.

He said the administrative matters were related to a relatively small number of transactions that the bank has since resolved and it continues to invest in monitoring and detection capabilities.

“We take our responsibilities seriously and will continue to identify, investigate and do our part to deter and detect financial crimes,” Wallis said.

Fintrac said CIBC had paid its penalty in full and proceedings have ended.

RBC, which was hit by the highest-ever penalty by the agency, was found to have failed to submit 16 suspicious transaction reports out of 130 reviewed, when there were reasonable grounds to suspect dealings were related to an attempted or actual money laundering or terrorist financing offence.

In the 2022-2023 financial year, Fintrac issued six notices of non-compliance to businesses for a total of $1,113,569 in penalties.

Fintrac has imposed more than 125 penalties across various sectors since it received the legislative authority to do so 15 years ago.

Other banks are also facing increased scrutiny for their oversight programs, including TD Bank, which disclosed earlier this year that it expects U.S. regulators to impose penalties related to the bank’s anti-money laundering compliance program.