CANADIAN BANKS MONEY-LAUNDERING CONTROLS FAIL…

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CANADIAN BANKS MONEY-LAUNDERING CONTROLS FAIL…

An article in the newspaper “The Wall Street Journal” from August 6, 2015, raises concerns about the inadequacies of certain Canadian banks in regard to the fight against money laundering: the federal regulator, the Office of the Superintendent of Financial Institutions (OSFI) found 72 cases of regulatory non-compliance between 2009 and 2014.

The article explains that the banks concerned were not named in the documents obtained by the Wall Street Journal nor whether the banks had faced financial penalties. The article also mentions that Canada has been facing growing international pressure to intensify its efforts to combat money laundering: In 2013, the U.S. State Department named Canada as a country of “primary concern” when it comes to money laundering. The U.S. State Department emphasizes that currency transactions at financial institutions involving large sums of money from international drug trafficking as being “problematic”. According to the Wall Street Journal, concerns also remain about Canadian banks within the country. The newspaper referred to a recent report from Canada’s Department of Finance that rated the vulnerability of deposit-taking institutions as “high to very high”.

The article specifically talks about the case of the Royal Bank of Canada (RBC) that moved to close down its wealth-management operations in Latin America and the Caribbean last year after having suffered a string of investigations in different countries, and in 2013, a warning from a U.S. regulator advised that RBC’s anti-money-laundering controls were unsatisfactory. RBC defends itself by explaining that it is doing everything possible to ensure the integrity of its corporation by respecting the legal and regulatory framework of every country in which it operates. At the same time, Ottawa announced its intention to strengthen Canada’s anti-money-laundering regime in order to remain at the forefront of the global fight against money laundering and terrorist financing, according to the Wall Street Journal.

We can see that a long road lies ahead in the fight against money laundering and that it will remain the central focus of financial institutions for many years to come. 

To find the full article from the Wall Street Journal (available only to subscribers): http://www.wsj.com/articles/canadian-banks-money-laundering-controls-failed-1438904411

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