Manulife Financial Corporation has issued a statement clarifying that Manulife Bank was sanctioned by FINTRAC for administrative lapses and not financial misconduct.
Manulife Bank received a $1.15 million sanction from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) last April. At the time, the name of the bank was withheld by FINTRAC. However, media reports recently unveiled that the penalty was given to Manulife Bank.
Lapses remedied in 2014
On Feb. 27, Manulife Financial Corporation released a statement saying that “the penalty essentially related to administrative lapses in reporting to FINTRAC. Although we operate at the highest ethical standard, we are capable of administrative errors. They were remedied in the first half of 2014. There is no evidence to suggest that the administrative reporting violations were connected to any financial misconduct.”
The statement goes on to state that “Manulife did not enable or facilitate money laundering and media reports to the contrary are inaccurate. One violation involved a customer who had already been reported to law enforcement and FINTRAC by Manulife. Additional information released by FINTRAC in 2016 shows that Manulife proactively worked with law enforcement in both Canada and the United States in relation to the matter underlying the one suspicious transaction report (STR) violation, including advising law enforcement prior to the failure to file this one STR.”
FINTRAC to review penalty program
Gérald Cossette, the director of FINTRAC, also released a statement Feb. 27 regarding the issue. He confirmed that the violations were of a technical nature. “I emphasize that the penalty has nothing to do with money laundering or the financing of terrorism. I also took into account the measures that the bank took to address its client's activities, including: the identification of the client's transactions; reporting on previous transactions linked to the client's account; and the bank's engagement with Canadian and American law enforcement authorities in relation to the client's activities.”
May not have met transparency expectations
Cossette added that while it was within his discretion to withhold the name of the bank, he now understands “that it may not have met public expectations in relation to openness and transparency.”
He stated that FINTRAC will look to work with Finance Canada to review legislation in relation to its penalty program. “We are also examining our administrative monetary penalty policies to ensure, among other things, that they strike an appropriate balance between the need for transparency and the requirements of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.”