The bank failed to submit 16 suspicious transaction reports out of 130 case files, did not submit separate suspicious transaction reports for different branch locations, and lacked proper governance for implementing AML procedures
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) has fined Royal Bank of Canada (RBC) C$7.5m ($5.5m) for the bank’s failure to report suspicious transactions.
The Canadian anti-money laundering agency said the administrative monetary penalty was imposed following a compliance examination in 2022.
According to FINTRAC, RBC has failed to report suspicious transactions, where there were reasonable grounds to suspect that transactions were related to money laundering.
The Canadian lender failed to provide information in suspicious transaction reports and maintain the documented policies and procedures up to date.
Financial Transactions and Reports Analysis Centre of Canada director and CEO Sarah Paquet said: “Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime is in place to protect the safety of Canadians and the security of Canada’s economy.
“FINTRAC will continue to work with businesses to help them understand and comply with their obligations under the Act. We will also be firm in ensuring that businesses continue to do their part and we will take appropriate actions when they are needed.”
RBC has filed to submit separate suspicious transaction reports for different branch locations and lacked proper governance for implementing AML procedures.
Also, the Canadian bank failed to submit 16 suspicious transaction reports out of 130 case files in a 2022 compliance review.
RBC was fined under the proceeds of Canada’s Crime (Money Laundering) and Terrorist Financing Act, and not for criminal offences for money laundering or terrorist activity financing.
RBC, in a statement, said: “We chose not to appeal but believe the fine is not at all commensurate with an administrative matter where there is no connection to money laundering or terrorist financing offences.
“Equally important, there is no finding that anyone exercised judgment in bad faith or knowingly contributed to violations.”
Last year, RBC agreed to acquire HSBC’s banking business in Canada for a cash consideration of C$13.5bn ($10.1bn), subject to regulatory approvals.
The Canadian lender also agreed to purchase all the preferred shares and debt issued by HSBC Canada and held by the HSBC Group for C$1.1bn and C$1.0bn, respectively.