The CIBC logo displayed the the lobby of its headquarters in Toronto on Monday, Oct. 25, 2021. THE CANADIAN PRESS/Evan Buhler
Canada's financial intelligence agency, the Financial Transactions and Reports Analysis Centre of Canada (Fintrac) has disclosed a $1.3-million penalty against CIBC for non-compliance with regulations concerning money laundering and terrorist financing measures. Although imposed on October 23, the penalty was only reported on Thursday, marking the second fine announced this week, following RBC's $7.4-million penalty publicized on Tuesday.
The penalty against CIBC was enforced due to several breaches, notably, its failure to submit a suspicious transaction report when there were indications of potential ties to money laundering or terrorist activities. Additionally, the bank was faulted for lapses in reporting information regarding significant money transfers originating from outside Canada.
Fintrac's primary task is to identify funds associated with illicit activities by sifting through vast amounts of data annually from banks, insurance firms, money service businesses, and other entities. It then shares intelligence concerning suspected cases with law enforcement agencies.
During Fintrac's examination in 2021, it was discovered that CIBC neglected to file a suspicious transaction report despite being aware that the client had been arrested and charged with criminal offenses. Moreover, the agency's review revealed over a thousand instances, out of a sample of 20,000, where data linked to money transfers lacked essential information.
Sarah Paquet, the agency's chief executive, emphasized that the reporting regulations are in place to safeguard Canadians and the economy's security. She stated, "We will also be firm in ensuring that businesses continue to do their part, and we will take appropriate actions when they are needed."
Responding to the penalty, CIBC's spokesperson Tom Wallis affirmed the bank's implementation of robust anti-money laundering and anti-terrorist financing procedures. Wallis highlighted that the administrative issues pertained to a relatively limited number of transactions, which the bank has since resolved, while continuing to invest in monitoring and detection capabilities. He reiterated the bank's commitment to identifying, investigating, and deterring financial crimes.
Fintrac confirmed that CIBC had paid the penalty in full, concluding the proceedings. RBC, on the other hand, faced the highest-ever penalty from the agency for its failure to report 16 suspicious transactions out of 130 reviewed, where reasonable grounds suggested potential links to money laundering or terrorist financing offenses.
In the fiscal year 2022-2023, Fintrac issued six notices of non-compliance to businesses, resulting in a total of $1,113,569 in penalties. Over the past 15 years, since acquiring legislative authority, Fintrac has imposed more than 125 penalties across various sectors. The increased scrutiny on financial institutions' oversight programs has extended to other banks, with TD Bank also anticipating penalties from U.S. regulators related to its anti-money laundering compliance program, as previously disclosed this year.
