Largest penalty
Watchdog to review practices after Manulife Bank revealed as institution fined $1.15 million
Canada’s money-laundering watchdog says it will review its practices after it was revealed Monday that Manulife Financial Corp. was the unnamed financial institution levied the largest penalty in the federal agency’s history.
Last April, Fintrac penalized Manulife $1,154,670 for failing to report a suspicious transaction and various money transfers. At the time, the federal agency did not name the company’s bank, saying it was exercising its discretion to do so - a decision that prompted a public outcry.
Manulife confirmed in a statement issued Monday that its banking unit was the one penalized for “administrative lapses” that were remedied in the first half of 2014. The disclosure came after the CBC, citing anonymous sources, identified Manulife Bank as the financial institution fined by Fintrac last year.
Experts speculated Fintrac’s decision not to name Manulife Bank could have come from an agreement whereby Manulife agreed not to pursue an appeal and pay the penalty in exchange for anonymity. Neither Fintrac nor Manulife have confirmed such a deal took place.
Fintrac director Gerald Cossette said in a statement that he used his discretion to bring about improved compliance behaviour as quickly as possible and send a message of deterrence to other businesses.
“We have found that court proceedings may take many years with information often being sealed and outcomes uncertain,” he said.
It’s likely Fintrac had an agreement with Manulife and felt a significant fine would be enough to satisfy the Canadian public, said Christine Duhaime, a lawyer at Duhaime Law, which specializes in counter-terrorist financing and anti-money laundering law practice.
However, there was significant backlash as the public felt granting a large corporation anonymity — something an average Joe wouldn’t be entitled to — wasn’t fair, she said.
The public needs to know who the entity behind such a large fine is, Duhaime said, adding she believes Fintrac won’t grant anonymity like this again if a similar matter comes up.