Canadian financial intelligence unit slaps RBC with $7.4 million penalty

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The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has imposed a $7.4 million penalty on the Royal Bank of Canada (RBC).

The financial intelligence agency announced its decision to impose the administrative monetary penalty on Tuesday morning following a compliance examination in 2022.

The decision was initially made on November 3 after, according to FINTRAC, RBC did not comply with parts of Canadian regulations about money laundering and the Terrorist Financing Act.

#FINTRAC has imposed an administrative monetary penalty of $7,475,000 on Royal Bank of Canada (RBC). For more information, consult the Centre’s website: https://t.co/lzmfCCLlvB pic.twitter.com/sHPG1XRYYe

— FINTRAC_Canada (@FINTRAC_Canada) December 5, 2023

FINTRAC says RBC failed to submit suspicious transaction reports that were “reasonable grounds to suspect that transactions were related to a money laundering offence.”

In addition, RBC did not provide information in the prescribed form and manner in the suspicious transaction reports and failed to keep written policies and procedures up to date.

“We hold ourselves to the highest standards on our processes to report suspicious activity and quickly took action to address gaps,” said RBC in a statement emailed to Daily Hive.

”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. Equally important, there is no finding that anyone exercised judgment in bad faith or knowingly contributed to violations.”

In Canada, casinos, banks, real estate brokers and sales reps, money services businesses, and other similar business sectors are required to keep certain records, identify clients, maintain a compliance regime and report certain financial transactions to FINTRAC under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

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The agency clarified that the fine on RBC was for administrative violations and not for criminal offences for money laundering or terrorist activity financing.

“FINTRAC will continue to work with businesses to help them understand and comply with their obligations under the Act,” said Sarah Paquet, FINTRAC director and CEO. “We will also be firm in ensuring that businesses continue to do their part, and we will take appropriate actions when they are needed.”

Since it gained the legal power to do so in 2008, FINTRAC has imposed over 125 penalties across several business sectors. In 2022–23, six Notices of Violation of non-compliance were issued to businesses for a total of $1,113,569.