A money services business in Toronto is being sanctioned for alleged compliance failings by the federal anti-money laundering authority, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
The agency announced that it imposed a monetary penalty of just under $250,000 on Marouf Management Inc., based on the findings of a compliance review in 2023, which found that the firm allegedly committed several regulatory violations.
Among other things, FINTRAC said that the firm failed to assess and document the risk of a money laundering or terrorist financing offence; that it failed to properly register; and that it failed to keep up-to-date compliance policies and procedures.
According to the regulator’s notice on the case, one of the alleged violations was classified as “very serious” — that involved failing to report transactions that originated in Iran, in violation of a ministerial directive that imposed tougher restrictions on dealings involving Iran.
“Non-compliance with a minister’s directive poses a very high risk to the integrity of Canada’s financial system and the safety of Canadians,” the notice said — citing the risk of transactions originating from a jurisdiction with an “ineffective or insufficient anti-money laundering and anti-terrorist financing regime.
“In a worst case scenario, suspicious transactions related to money laundering or terrorist financing offences could remain undetected, posing a risk to the financial system and the safety of Canadians,” it said.
Apart from that violation, FINTRAC also said that “Marouf Management Inc.’s policies and procedures did not address the vast majority of the requirements” under the anti-money laundering laws and rules — and that the firm “failed to consider the risks of their products, services and delivery channels, risks related to new developments and technologies or other relevant factors.”
Failing to assess money laundering risks “can also lead to failing to identify high-risk clients and business relationships for which enhanced risk mitigation measures must be applied,” it said.
The firm has appealed the regulator’s decision to the Federal Court, FINTRAC noted.