The recent $3 billion settlement that TD Bank Group has made with U.S. regulators for their lack of oversight on money laundering risks has brought into focus the issues surrounding enforcement in Canada.
Denis Meunier, the president of DMeunier Consulting Inc. and a former deputy director of Fintrac, believes that fines in Canada need a significant boost to act as a real deterrent and not just a cost of doing business. He suggests that the federal government should impose substantial fines for cases of gross negligence and increase administrative penalties, as fines in Canada have remained stagnant since 2008.
In Canada, Fintrac has the authority to impose a fine of up to $500,000 for each severe reporting violation, or it can escalate violations to potential criminal prosecution. On the contrary, the hefty fine that TD received in the U.S. was possible due to American regulations allowing regulators to penalize banks up to $500,000 per day for not having an effective anti-money laundering program in place.
Last year, the Finance Department engaged in discussions on how to bolster Canada’s anti-money laundering framework, and recently, it toughened regulatory requirements for various non-bank entities such as casinos and title insurers.
This highlights the pressing need for Canada to reassess its approach to combating money laundering and enforcing regulations effectively. Stronger fines and penalties can create a stronger deterrent effect and ensure that financial institutions prioritize adherence to anti-money laundering measures. As the landscape of financial crimes evolves, it’s crucial that Canada adapts its enforcement methods to stay ahead of illicit activities and protect the integrity of its financial system.
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