FINTRAC’s annual report offers insight into AML compliance efforts

December 13, 2016

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), the Canadian regulatory authority responsible for overseeing anti-money laundering (AML) compliance across the country, tabled its annual report recently. The release of the report offers a glimpse into the state of AML compliance efforts in Canada, including key statistics from FINTRAC’s year:

  • Received 23,727,393 financial transaction reports
  • Conducted 739 compliance examinations
  • Saw an increase of 24% in the number of suspicious transaction reports (STRs) received
  • Issued 22 administrative monetary penalties
  • Imposed a $1.15 million administrative penalty on an unnamed federally regulated financial institution
  • Sent 1,655 disclosures of actionable financial intelligence to partners, including 1,172 that were related to money laundering and 329 that related to money laundering/terrorism financing/threats to Canada’s security

The agency also reports on its efforts to cooperate with international allies, which it is required to do. In fiscal year 2015–16, FINTRAC received 240 queries from allies; sent 147 of its own; and made 384 disclosures to foreign financial intelligence units.

In addition, FINTRAC is mandated to enhance “public awareness and understanding of money laundering and terrorist activity financing”, and to research and analyze “data from a variety of sources that shed light on trends and patterns in money laundering and terrorism financing”. To this end, it hosted two Major Reporters Forums for Canada’s largest financial institutions related to compliance and intelligence issues. The agency also worked with its international counterparts on the Financial Action Task Force’s (FATF’s) paper called ‘New and Emerging Terrorist Financing Risks’. Another FINTRAC document that is useful for reporting entities is the recently published ‘Guidance on the Risk-Based Approach to Combatting Money Laundering and Terrorist Financing’.

There were several other interesting highlights from the report:

  • With the Toronto Police Service, FINTRAC investigated an alleged $93-million pyramid scheme that saw two individuals charged with defrauding the public, possession of proceeds of crime, laundering proceeds of crime and other offences.
  • Since 2013–14, the most examinations per sector was in real estate (529) followed by financial entities (495) and money services businesses (MSBs – 455), indicative of the increasing AML regulatory interest in real estate transactions
  • Casinos filed 172,289 disbursement reports in 2015–16—an increase of almost 33% from 2013–14
  • The number of STRs received by FINTRAC jumped by nearly 40% from 2013–14 to 2015–16

With regulatory reports on the rise, it’s essential that banks, MSBs, casinos and other financial institutions complete and file their reports quickly. The CaseWare AML Compliance solution pre-populates regulatory reports with data drawn from the transaction monitoring platform; after being reviewed by the compliance team, the solution automatically submits the reports to regulators. To learn more about the regulatory reporting capabilities included in CaseWare AML Compliance, watch the video. 

 

About Andrew Simpson:

Andrew Simpson has close to two decades of experience in the information systems audit and security business; specifically data analytics, interrogation and forensics. He is a regular contributor to various auditing conferences and is acknowledged as an expert on continuous controls monitoring and revenue assurance.

Connect:  Andrew Simpson

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