A Winnipeg-based credit union, Cambrian Credit Union, was sanctioned by federal anti-money laundering authority, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), for compliance violations.
FINTRAC imposed an administrative monetary penalty of $116,160 on the credit union after uncovering four violations in a 2023 compliance review.
According to a notice from the agency, those violations included failing to conduct enhanced due diligence on a client that had been identified as “high risk” on the basis of a previous suspicious transaction report.
“While the client was rated high risk, Cambrian Credit Union did not conduct enhanced due diligence as per the organization’s prescribed ongoing monitoring frequency or review the client’s continued transactions to determine if there were any new or subsequent transactions meeting the reasonable grounds to suspect threshold. As a result, suspicious transactions conducted by the client were not investigated nor reported to FINTRAC,” it said — a violation that it classified as “very serious.”
It also flagged a couple of “serious” violations, which included weaknesses in the credit union’s compliance policies and procedures.
Specifically, it found that the firm’s policies weren’t adequate in the areas of, “ongoing monitoring, transaction reporting and production orders.”
“When a reporting entity fails to conduct thorough ongoing monitoring of business relationships, it is unaware of changes to the client’s transactions, activities and circumstances, especially those that may pose a higher risk of money laundering and terrorist activity financing,” FINTRAC said in its notice — this, in turn, can hamper the agency’s ability to guard against illicit financial activities, it said.
The agency also found that the firm’s efforts to identify risky clients was inadequate.
“FINTRAC’s examination found that Cambrian Credit Union was not properly risk rating clients who were conducting higher risk transactions. Additionally, Cambrian Credit Union was not considering the impact of the location of its clients and their transactions to their overall risk,” it said.
Finally, the agency also found that the credit union wasn’t consistently following its policies on reporting incoming electronic funds transfers from overseas of at least $10,000.
“This omission was due to human error and the requirement to report the transactions was missed completely,” it said, although it classified that violation as “minor.”