Canada's Financial Transactions and Reports Analysis Centre — FINTRAC — publicly announced on 11 December 2024 that it had imposed an administrative monetary penalty of C$2,457,750 on Exchange Bank of Canada. The penalty was imposed on 5 November 2024 and made public five weeks later. The action relates to a series of anti-money laundering and anti-terrorist financing compliance failures identified over the course of a regulatory examination that ran from December 2022 to April 2024.
The announcement detailed three categories of regulatory violation. The most serious, classified by FINTRAC as a Very Serious violation, was the bank's failure to submit suspicious transaction reports as required under Canada's Proceeds of Crime (Money Laundering) and Terrorist Financing Act. In addition, the regulator cited a Minor violation for failure to conduct adequate ongoing monitoring of business relationships, and identified three separate instances in which the bank failed to report large cash transactions at or above the C$10,000 reporting threshold.
EXAMINATION IDENTIFIED IMMATURE COMPLIANCE PROGRAMME
FINTRAC's examination findings went beyond the specific transaction-reporting failures to assess the structural condition of Exchange Bank of Canada's broader compliance framework. The regulator concluded that the bank's anti-money laundering and anti-terrorist financing compliance programme had not sufficiently matured across several key pillars, including oversight exercised by the designated chief anti-money laundering officer, the effectiveness of transaction monitoring systems, and the rigour of the bank's case investigation practices.
ABOUT THE BANK
Exchange Bank of Canada is a federally regulated bank operating primarily in the Canadian foreign exchange and payments sector.
Bank news that matters, every weekday.
Follow The Global Banker on LinkedIn