Canada Fined A Chinese State-Owned Bank For Anti-Money Laundering Non-Compliance

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.

15 Comments

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  • Fazid 12 months ago

    How many domestic banks fail to report and it’s just seen as normal? I bet they don’t even audit all of the branches the way they scrutinize smaller banks.

  • PK 12 months ago

    They just run a bank and can’t be expected to know basic banking procedure like real estate agents are now required to know. Canada putting the wrong focus, as usual.

    • Dax 12 months ago

      …are you actually excusing a bank from it’s responsibility…of being a bank?

  • The Smoking Man 12 months ago

    I’m going to vomit. More disturbing than a ridiculous and miniscule fine against the ginormous iceberg of criminal financial activity facilitated by the banks every day, is the statement that FINTRAC is underfunded and toothless. I have an idea – lets bring it up with the ombudsman – the final recourse before you give up. No? Oh ya, most banks ‘opted out’. How about that independent ADR Chambers Ombudsman? No? Looks like a bunch of former bankers are protecting current bankers. Maybe banks are just self-policing criminal organizations destroying everything? I wonder how many cases got dropped to motivate the fine payment.

    • Kate Wright 12 months ago

      I believe that statement was presented at the Cullen Commission, when they said they said they didn’t have the resources to review everything. Keep in mind that there was a drop in FINTRAC audits in 2021, but also Canada disassembled the RCMP financial crime unit for Ontario.

  • e P 12 months ago

    $700000fine…. That will learn them to be more better🤣🤣🤣. That’s like one days laundering profit… Gee I wonder what the ramifications will be if they don’t pay. …

  • Ron Bruce 12 months ago

    $Billions of dollars has been laundered over the decades, and FINTRAC calls this $700 K fine a win. The $700 K has already been earned backed via offshore investors investing in Real Estate. Banks are complicit in this fraud, while FINTRAC and the CRA shuffle paper. There is no teeth/accountability in Canada, and the rest of the world knows it. Every dime coming from Chinese Banks should be turned away, and the recipients of untraceable funds in Canada investigated by the RCMP. Wake the hell up.

  • D 12 months ago

    Try depositing $500 in the bank and they‘ll play 21 questions with you and treat you like a terrorist by putting you on FINTRAC. Canada isn’t free, it’s a feudal society.

  • RainCityRyan 12 months ago

    700k … not even a drop in the bucket.
    This wouldn’t even register for a large or mid-sized bank.

    Imagine finding a ticket on your windshield for 0.17$ … I don’t know about you but I sure wouldn’t park there anymore.
    /s

  • Heather 12 months ago

    You’ all saying this is just coffee money?

  • Arthur 12 months ago

    Dirty money flows around the world better in U.S. Dollars not Canadian$.
    With U.S. international transfers one additional option available for Canadian Banks is to ensure that the Bank’s New York offices that processed the wire transfers via SWIFT are, reporting as required, the suspicious transactions to the U.S. Regulator FinCEN. FinCEN are much better & efficient in the prosecution of U.S money laundering laws . Fines, especially against banks’ for “willful blindness” to obvious laundering activities typically range from a minimum of U.S. $250,000 or if greater, all the money that flowed through the bank. No need really to change Canadian AML laws – just improve cooperation with U.S law enforcement.

    • The Smoking Man 12 months ago

      The money is flowing into Canada in all currencies. To your point, it would be easier to launder it through the lax Canadian offices rather than tighter US offices, no? Regarding that $250K fine, I think that equal to what Scotiabank is paying every 2 minutes for their sign on The Maple Leafs rink. It’s almost nothing to them.

      • The Smoking Man 12 months ago

        Sorry, I was over-zealous there, Scotiabank pays $109,000 per day for the sign on the rink. For 20 years.

        Ted Rogers bought the SkyDome – the actual building and its land – for $50M and hung his sign on it. That’s how meaningless bank money is.

  • amin 12 months ago

    should arrest all the company managers and lock themup
    like they did to the two micahaels or close the bank period
    no ifs and or buts

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