On November 3, 2023, the Royal Bank of Canada (RBC) received an administrative monetary penalty of $7,475,000 for three violations identified during a compliance examination in 2022. These violations, under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated regulations, were administrative in nature and did not involve criminal offenses related to money laundering or terrorist activity financing.
Violation #1: RBC failed to report 16 suspicious transactions out of 130 case files reviewed, where there were reasonable grounds to suspect a connection to money laundering or terrorist financing. This included instances where the bank did not escalate files after receiving production orders or failed to submit reports despite the presence of indicators.
Violation #2: Before May 2021, RBC did not file separate suspicious transaction reports (STRs) for different branch locations. A review found that 29 out of 34 reports included transactions for multiple locations, not reported on separate STRs as per FINTRAC’s guidance.
Violation #3: RBC did not have appropriate and documented governance for developing, updating, and implementing Anti-Money Laundering (AML) and Anti-Terrorist Financing (ATF) policies and procedures. Some procedures related to the identification and reporting of STRs were found to be incomplete, inadequate, and inconsistent.
The penalties highlight deficiencies in RBC’s reporting of suspicious transactions and its AML/ATF policies and procedures.
By FCCT Editorial Team
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