Canada just fined the world’s largest bank for not following anti-money laundering rules. A local subsidiary of the Industrial and Commercial Bank of China (ICBC) paid over $700k in penalties last year. Despite only being fined weeks ago, FINTRAC, Canada’s financial intelligence unit, found the problems during a routine audit in 2019. The regulatory body says the bank failed to file suspicious transaction reports, even when they had reasonable grounds to suspect money laundering or terrorist financing.
Chinese State-Owned Bank Found In Violation of Anti-Money Laundering Reporting Standards
The Canadian subsidiary of the world’s largest bank was lax with its reporting standards, says a government agency. Following a routine compliance audit in 2019, Canadian authorities found several “administrative violations.” Those include:
- Failure to treat activities in respect of some entities as high risk and to take the prescribed special measures;
- Failure to submit suspicious transaction reports where there were reasonable grounds to suspect that transactions were related to a money laundering or a terrorist financing offense; and
- Failure to institute and document the prescribed review of some areas of its compliance policies and procedures.
More bluntly, FINTRAC accused them of not following anti-money laundering rules.
Canada Hits The World’s Largest Bank With A $700k Fine
Two years later, they’re circling back and asking the bank to pay a fine. Despite the audit being conducted in 2019, the fine was issued on October 4, 2021. ICBC has since paid the $701,250 fine. A lot of questions about how the fine’s value was determined. However, that data isn’t publicly available at this point.
The Canadian regulator is using the opportunity to remind financial institutions they’ll continue to ensure they follow compliance. “…we will be firm in ensuring that businesses continue to do their part and we will take appropriate actions when they are needed,” said Sarah Paquet, Director and Chief Executive Officer, FINTRAC.
Ironically, today it was revealed the under-resourced agency conducted 64% fewer audits in 2021. That helps explain why it takes 2 years to leverage a fine.