The recent US$3-billion settlement that TD Bank Group has reached with U.S. regulators for its failure to oversee money laundering risks highlights the perceived lack of strong enforcement options in Canada.
According to Denis Meunier, president of DMeunier Consulting Inc. and a former deputy director of Fintrac, fines in Canada must see a significant increase in order to serve as an effective deterrent and not simply be viewed as a cost of conducting business.
Meunier suggests that the Canadian government should introduce substantial fines for cases of gross negligence and raise administrative penalties, as fines in Canada have remained stagnant since 2008.
In Canada, Fintrac has the authority to impose a maximum fine of $500,000 for each severe reporting violation, or it can opt for potential criminal prosecution for violations.
In contrast, the substantial fine imposed on TD was based partly on U.S. regulations that allow regulators to fine banks up to $500,000 per day for lacking a functional anti-money laundering program.
Last year, the Finance Department conducted consultations on enhancing Canada’s anti-money laundering framework, and earlier this year, it strengthened regulatory requirements for various non-bank entities such as casinos and title insurers.
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