Latest Payments News: Canada Seeks 40-Fold Increase In AML Penalty Fines, and more

Catch up on six of the stories our payments compliance analysts have covered lately, and stay up-to-date on the latest news.

Canada Seeks 40-Fold Increase In AML Penalty Fines

After TD Bank, Canada’s second-largest lender, was hit with a record-breaking money laundering fine in the US, Canada is also looking to beef up its own penalties.

In its 2024 Fall Economic Statement, the Canadian government announced plans to significantly increase the severity of financial penalties for individuals found to be in non-compliance with AML law.

The legislative changes proposed would raise all individual administrative monetary penalty (AMP) amounts by 40 times their current amount.

Similarly, fines for all criminal offences would be increased ten-fold, and potential prison terms would be increased to up to one year.

If adopted, the new amendments would be added to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), Canada’s foundational AML law.

The government’s proposed changes would also allow FINTRAC, Canada’s AML regulator, to refuse or revoke the registration of money service businesses (MSBs) with an outstanding AMP.

In addition, a new criminal offence would be added for providing false, misleading or incomplete information to FINTRAC.

“Canada is taking forceful action to hold businesses responsible for the actions they oversee,” the government said. “New reforms will ensure non-compliance is treated as a serious priority.”

The proposals follow a recording-breaking settlement between TD Bank and the US Department of Justice (DOJ) earlier this year.

In October, as covered by Vixio, TD Bank became the first bank in US history to plead guilty to conspiracy to commit money laundering.

It was also hit with a total penalty of more than $3bn, made up of a $1.7bn criminal fine and $1.33bn in civil fines.

The criminal fine was the largest the DOJ has ever imposed under the Bank Secrecy Act.

Filipino Remittance Provider Loses Licence Due To Compliance Failures

The Philippines central bank has cancelled the licence of Fil-Express Remittance and Delivery Services, a local money service business (MSB), due to compliance failures.

Announcing the licence cancellation on Monday (December 16), the Bangko Sentral ng Pilipinas did not give specific details as to the nature of the compliance failures.

However, the central bank did note that Fil-Express was found to be in violation of Section 901-N of the Manual of Regulations for Non-Bank Financial Institutions for a Money Service Business (MORNBFI).

Section 901-N of the (MORNBFI) outlines the licensing requirements for companies wishing to operate as MSBs within the Philippines.

It obligates covered entities to establish and implement robust anti-money laundering (AML) and know your customer (KYC) policies and procedures.

It also requires MSBs to submit regulatory reports to the BSP including financial statements, transaction records and AML compliance reports.

Finally, Section 901-N grants the BSP the authority to conduct inspections and audits to ensure that MSBs are operating within the legal and regulatory framework.

EU Adopts 15th Sanctions Package

The European Union has adopted its 15th package of sanctions aimed at curbing Russia’s capacity to continue aggression towards Ukraine. The measures announced target individuals, entities and mechanisms supporting Moscow’s military and industrial complex.

“Russia continues its brutal attack against Ukraine and Ukrainian people. This package of sanctions is part of our response to weaken Russia’s war machine and those who are enabling this war,” commented Kaja Kallas, the EU’s high representative for foreign affairs and security policy.

The package includes sanctions against 54 individuals and 30 entities responsible for undermining Ukraine’s sovereignty. Those listed include military units linked to attacks on civilians, while high-ranking officials from North Korea, implicated in aiding Russia’s war efforts, were also targeted.

On the corporate front, the EU has sanctioned Russian defence and shipping companies profiting from transporting crude oil and stolen Ukrainian grain. It has also imposed its first sanctions on Chinese entities supplying drones and microelectronics to Russia.

The measures also crack down on maritime circumvention tactics by adding 52 more vessels to a ban list, bringing the total to 79, and 32 new entities, including companies in China, India, Iran and Serbia, face tighter export restrictions on dual-use goods that enhance Russia’s defence capabilities.

To protect EU businesses meanwhile, the EU has barred recognition of Russian court rulings enforcing anti-suit injunctions, preventing disproportionate penalties on European firms and has extended derogations for companies divesting from Russia, enabling an orderly withdrawal.

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