FINTRAC fines TD Bank record $6.7M over AML program failings

Written by Amanda

TD Bank violated Part 1 of Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act, FINTRAC announced in a press release Thursday. A FINTRAC spokesperson confirmed the penalty was the largest the regulator has ever imposed.

On Tuesday, the bank said it set aside $450 million to settle separate allegations in the United States related to AML and Bank Secrecy Act program failures.

The details: The shortcomings in TD Bank’s AML program were discovered by FINTRAC during a compliance examination conducted in 2023, according to the regulator’s public notice.

TD Bank was cited for failing to file suspicious transaction reports on 20 transactions where the regulator determined there was “reasonable grounds” to suspect those transactions were facilitating money laundering or terrorism.

The bank failed to assess AML/countering the financing of terrorism risks, and FINTRAC found weaknesses in its process and controls for assessing client risk. The regulator said it found 96 clients in a review period between March 1, 2022, to March 31, 2023, who should have been classified as high risk but were not.

FINTRAC further alleged TD Bank failed to take measures required by the law to address high risks for 85 clients. The bank failed to apply enhanced due diligence measures on 11 clients, as required by the law and its own policies and procedures, the notice said.

The regulator found 96 instances where the bank did not reassess a client’s risk rating and 20 other instances when it did not adequately review a client’s activity to determine whether transactions were consistent with information obtained about the client. TD Bank also allegedly failed to keep proper records of its ongoing monitoring of business relationships.

Compliance considerations: FINTRAC noted the fine was an administrative penalty levied on the bank for its AML failings and not for any criminal activity connected with money laundering or terrorism. The penalty has been paid in full, the regulator said.

TD Bank did not immediately respond to a request for comment.

Source: complianceweek.com

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