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Toronto-Dominion Bank, which is in the midst of several probes over its anti-money-laundering controls in the United States, has been hit with a financial penalty of nearly $9.19 million for several instances of non-compliance with Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
The Financial Transactions and Reports Analysis Centre of Canada found Canada’s second largest bank failed to submit suspicious transaction reports where there were reasonable grounds to suspect that transactions were related to a money laundering or terrorist activity financing offence.
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In a statement, FINTRAC noted that the penalties were imposed for administrative violations and there was no allegation of criminal offence for money laundering or terrorist activity financing.
Other administrative violations included failure to assess and document money laundering or terrorist activity financing risks, failure to conduct ongoing monitoring of business relationships and keep record of the measures taken and information obtained when conducting ongoing monitoring of business relationships, and failure to take the prescribed special measures for high risk.
The penalty comes just days after TD said it was setting aside US$450 million in connection with an ongoing U.S. regulatory probe into its anti-money laundering controls. The bank said the provision does not reflect the final aggregate amount of potential monetary penalties or other penalties as the regulatory investigations — including one by the U.S. Department of Justice — are ongoing. Analysts had suggested financial penalties in the U.S. could top out at US$1 billion, but National Bank analyst Gabriel Dechaine said in a note to clients on Tuesday that the preliminary amount set aside suggests that estimate could be exceeded.
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Canadian regulators have been less aggressive on enforcement related to money laundering controls, but FINTRAC stepped up activity late last year.
In December, Royal Bank of Canada was ordered to pay nearly $7.5-million for administrative violations under the Proceeds of Crime (Money Laundering) and Terrorist Finance Act and associated regulations, which was at the time the largest penalty meted out by FINTRAC. RBC issued a statement saying that although the bank did not appeal the assessment, it believed the fine was “not at all commensurate with an administrative matter where there is no connection to money laundering or terrorist financing offences” and “no finding that anyone exercised judgment in bad faith or knowingly contributed to violations.”
Shortly after the RBC penalty was announced, FINTRAC announced a $1.3-million penalty against Canadian Imperial Bank of Commerce, also in connection with administrative violations of the anti-money-laundering act.
• Email: bshecter@postmedia.com
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