B.C. company appealing nearly $230K fine for failing to report transactions originating from Iran

Canadian cash is shown. (Shutterstock.com)

A Surrey-based "money services business" is appealing a roughly $230,000 fine levied against it by Canada's anti-money-laundering and terrorism financing regulator.

The Financial Transactions and Reports Analysis Centre of Canada, better known as FINTRAC, announced the administrative monetary penalty against 1121920 B.C. Ltd., in a news release late last month. 

The numbered company does business as "Simple Canadian Services," according to FINTRAC, which said the penalty stems from a compliance examination it conducted in 2022.

FINTRAC sought to impose the $229,350 fine after identifying five violations of the federal Proceeds of Crime (Money Laundering) and Terrorist Financing Act, and its associated regulations.

The company has appealed the fine in Federal Court, FINTRAC said.

The five violations FINTRAC identified, as described in its release, were:

• Failure to submit incoming electronic funds transfer reports of $10,000 or more in the course of a single transaction, together with prescribed information;
• Failure to develop and apply written compliance policies and procedures that are kept up to date;
• Failure to assess and document the risk of a money laundering or terrorist financing offence;
• Failure to institute and document the prescribed review;
• And failure to treat all transactions from a foreign jurisdiction as high-risk in accordance with ministerial directives.

Specifically, investigators found that Simple Canadian Services had failed to submit 21 "incoming electronic funds transfer reports" between Dec. 10, 2020 and May 7, 2021, in which they "received instructions electronically from outside of Canada for transactions totalling $10,000 or more by or on behalf of the same individual or entity."

"FINTRAC determined that Simple Canadian Services was not consistently following their respective policies and procedures with respect to reporting of electronic wire transfers," FINTRAC said on its website. 

The agency also noted that the company's primary clients "have connections to or are based in Iran," but Simple Canadian Services had not assessed "the specific geographical risks" associated with its operations.

According to FINTRAC, the company failed to comply with a ministerial directive requiring businesses to report all transactions originating from Iran, regardless of the amount of money involved.

"Administrative monetary penalties are meant to be non-punitive and are issued to encourage change in the non-compliant behaviour of businesses," FINTRAC said in its release.