Federal anti-money laundering agency, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), has sanctioned a British Columbia-based money services business, Crystal Currency Exchange Inc., for a series of compliance failures.
FINTRAC levied an administrative monetary penalty of $348,067.50 against the Burnaby, BC-based firm for a variety of administrative violations, including failing to report large cash transactions and failing to submit suspicious transaction reports. The regulator also found violations in its compliance policies and procedures, training and that it failed to appoint a compliance officer.
According to an enforcement notice, the most serious violation involved three instances in which FINTRAC found that the firm failed to report financial transactions where there were “reasonable grounds” to suspect that the transactions were related to money laundering.
They included indicators that were previously reported for those same clients, it said. Transactions involved large amounts of foreign cash, with connections to jurisdictions that are known to be at a higher risk for money laundering and terrorist financing. They were also inconsistent with the clients’ finances.
This sort of violation, “represents severe non-compliance,” the agency said — as it means that potentially useful financial information is not available for FINTRAC’s analysis. This is classified as a “very serious” violation, the agency noted.
The weaknesses in the firm’s compliance policies, training and personnel, were classified as “serious” violations, while the other reporting violations were deemed minor.
Crystal Currency Exchange has appealed the decision to the Federal Court, FINTRAC noted.