In my blog post of April 14th, I discussed what I referred to as the curious case of the penalty that Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) had imposed on a bank. On April 17th, FINTRAC called with some information relevant to both the contents of my post and of some of the press reports that had addressed the case.  As I found the information to be informative, I thought that I would pass it along.

One of the aspects of the penalty that the post discussed was FINTRAC’s decision not to publish the name of the entity, in this case a bank, on which the penalty had been imposed.  I noted that FINTRAC published on its website, a cumulative list of the penalties that have been imposed that, in each case, includes the name of the entity that paid the fine.  I also suggested that the words used to describe the list seemed to suggest that it is exhaustive of all prior cases since 2009.

FINTRAC told me that there have been 34 additional cases where penalties have been imposed where FINTRAC decided not to publish the name of the entity involved or the facts of the case.  My conversation with the FINTRAC official was friendly and at no time did FINTRAC suggest or recommend that I write a follow-up post.  So, what follows is my own assessment of this information and how it impacts my original post.

As FINTRAC did not disclose to me any of the facts of the bank case, it is not possible to reach any conclusion about whether it was more like the cases where FINTRAC did name the entity or more like those in which it did not.  What we do know is that more often than not, FINTRAC elects not to name the entity.  Therefore, contrary to some press reports, there is no reason to believe that the bank received more favourable treatment just because it is a bank.  In fact, it received the same treatment that a majority of the other entities that paid fines in the past.

As I reported in my previous post, FINTRAC does publish information about the criteria it uses to decide whether or not to publish a particular case.  However, the criteria are principles-based and subjective.  Without knowing more about the cases it did not publish, it is not possible to comment on the fairness of FINTRAC’s decisions.  However, without going too far out on a limb, it is likely appropriate to conclude that it did not base its decision in this case on the simple fact that a bank was involved.  At the same time, as the amount  of the fine imposed is almost three times the amount of the next highest penalty in the cases that have been disclosed, it would have been interesting to know the facts involved.  For example, when compliance officers risk rate applicable regulatory requirements, one factor that is normally considered is the size of penalties that have been imposed in respect of the requirement.  While we know the size of the fine paid, we do not know the breaches to which the penalty relates.

I do wish to thank FINTRAC for the call.  Helping its constituents, including mere lawyers in private practice, to better understand its practices is certainly helpful.