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9. Penalties for non-compliance with the PCMLTFA

Non-compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) may result in significant criminal or administrative penalties.

FINTRAC must make public all administrative penalties imposed.

FINTRAC may disclose non-compliance cases to PCMLTFA enforcement bodies when non-compliance is obvious or is not expected to be corrected in the short or medium term. Criminal penalties may include:

  • Failure to report suspicious transactions: maximum fine of $2 million and/or 5 years imprisonment
  • Failure to report a large cash transaction or an electronic funds transfer: maximum fine of $500,000 for the first offence and $1 million for subsequent offences;
  • Failure to comply with record-keeping requirements: maximum fine of $500,000 and/or 5 years imprisonment
  • Failure to provide assistance or information during the compliance review: maximum fine of $500,000 and/or 5 years imprisonment
  • Disclosing the fact that a suspicious transaction report has been filed or the contents of such a report with the intent to prejudice a criminal investigation: up to 2 years imprisonment

The Homelife/Experience Realty case is an example.

Following a compliance review by FINTRAC, the Ontario real estate agency in question was sent a list of irregularities related to the implementation of a compliance program. Despite the additional time granted, the real estate agency did not follow up on the notice sent to it. It was fined $37,000 (reduced to $27,000).

The real estate agency then provided FINTRAC with an explanation and a series of documents to demonstrate the steps taken to comply with the Act.

When the fine was upheld, the real estate agency applied to the Federal Court, notably arguing that the letter of explanation it had sent had not been taken into account, even though it had been diligent and had taken all reasonable steps to avoid any violation of the Act.

These arguments were not retained.

The Federal Court found that the real estate agency had not been diligent since there was notably no confirmation of the appointment of a compliance officer, there was no evidence that the documents provided existed at the time of the compliance review, that these documents merely reproduced excerpts from the Act, and that the training courses offered by the real estate agency to its brokers did not constitute the continuing education program required by the Act.

Last updated on: December 14, 2021
Numéro d'article: 208780