Administrative monetary penalty on Cambrian Credit Union

From: Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)

[2025-06-10]

Cambrian Credit Union, a credit union headquartered in Winnipeg, Manitoba, was imposed an administrative monetary penalty of $116,160 on March 3, 2025, for committing 4 violations. The violations were found during the course of a compliance examination in 2023. The administrative monetary penalty has been paid in full and proceedings have ended.

FINTRAC’s examination determined that for the period under review, Cambrian Credit Union failed to develop and implement a complete and an effective compliance program. Cambrian Credit Union’s compliance program, specifically its documented policies and procedures for ongoing monitoring and its risk assessment, lacked sufficient documentation and details to allow it to meet its obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated Regulations.

Nature of violation

Violation #1

Failure to report financial transactions that occurred in the course of its activities and in respect of which there are reasonable grounds to suspect that the transactions are related to the commission or the attempted commission of a money laundering or a terrorist activity financing offence – Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Act), section 7, and the Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations, paragraph 9(1)

FINTRAC determined that Cambrian Credit Union failed to submit 1 Suspicious Transaction Report, where there were reasonable grounds to suspect that 1 or more transactions were related to the commission or attempted commission of a money laundering or terrorist activity financing offence.

FINTRAC’s examination determined that Cambrian Credit Union had failed to review the profile of a client who was rated high risk due to the submission of 1 previous Suspicious Transaction Report. While the client was rated high risk, Cambrian Credit Union did not conduct enhanced due diligence as per the organization’s prescribed ongoing monitoring frequency or review the client’s continued transactions to determine if there were any new or subsequent transactions meeting the reasonable grounds to suspect threshold. As a result, suspicious transactions conducted by the client were not investigated nor reported to FINTRAC in an additional Suspicious Transaction Report.

Violation #1 is classified by regulations as a Very serious violation. The imposed penalty takes into account the criteria in section 73.11 of the Act and section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.

Violation #2

Failure to report the receipt from outside of Canada of an electronic funds transfer of $10,000 or more in the course of a single transaction, together with the prescribed information – Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, paragraph 7(1)(c)

FINTRAC determined that Cambrian Credit Union failed to report 2 electronic funds transfer reports for incoming electronic funds transfers from outside of Canada of $10,000 or more, together with the prescribed information.

FINTRAC’s examination determined that Cambrian Credit Union was not consistently following its policies and procedures with respect to reporting of electronic funds transfers. As a result, the transactions of $10,000 or more were not identified or reported to FINTRAC despite meeting the prescribed transaction reporting requirements. This omission was due to human error and the requirement to report the transactions was missed completely.

Violation #2 is classified by regulations as a Minor violation. The imposed penalty takes into account the criteria in section 73.11 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.

Violation #3

Failure of a person or entity to develop and apply written compliance policies and procedures that are kept up to date and, in the case of an entity, are approved by a senior officer – Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, paragraph 156(1)(b)

FINTRAC determined that Cambrian Credit Union’s compliance policies and procedures did not comply with the requirements of paragraph 156(1)(b) of the Regulations. Overall, Cambrian Credit Union did not document and apply the necessary measures in its compliance policies and procedures to meet all of its obligations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Act) and associated Regulations.

FINTRAC’s examination determined that Cambrian Credit Union’s policies and procedures were not developed in detail and did not provide adequate information for staff to follow and apply in order to fulfill the requirements. Cambrian Credit Union did not sufficiently develop and document its compliance policies and procedures in relation to ongoing monitoring, transaction reporting and production orders.

The policies and procedures related to suspicious transaction reporting and ongoing monitoring did not include adequate information about how ongoing monitoring is conducted. It also did not include details about what information is to be reviewed and recorded as part of Cambrian Credit Union’s enhanced measures. Additionally, while Cambrian Credit Union had a procedure for when a request from law enforcement (in other words, a production order) related to a predicate offence is received, the procedure did not include adequate information about what should be reviewed to determine whether the reasonable grounds to suspect threshold for submitting a Suspicious Transaction Report have been met.

The requirement to conduct ongoing monitoring of a business relationship is important to protect Canada's financial system from money laundering and terrorist activity financing. When a reporting entity fails to conduct thorough ongoing monitoring of business relationships, it is unaware of changes to the client's transactions, activities, and circumstances, especially those that may pose a higher risk of money laundering and terrorist activity financing. Consequently, when the reporting entity is unaware of these changes, the client's information and risk assessment are not updated to reflect the true level of risk which may potentially result in ineffective risk mitigation and unreported transactions. Where a lack of ongoing monitoring results in the failure to submit suspicious transaction reports and prescribed transaction reports, it negatively affects FINTRAC's mandate to analyze and disclose information to assist in the detection, prevention and deterrence of money laundering and terrorist activity financing. As a result, these requirements were not applied at all times as demonstrated by Violation #1.

Violation #3 is classified by regulations as a Serious violation. The imposed penalty takes into account the criteria in section 73.11 of the Act and section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.

Violation #4

Failure of a person or entity to assess and document the risk referred to in subsection 9.6(2) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, taking into consideration prescribed factors – Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, paragraph 156(1)(c) and subsection 156(2)

FINTRAC’s examination determined that Cambrian Credit Union’s risk-based assessment was incomplete as it did not clearly outline the risks associated with its clients and business relationships nor the geographic risk of its clients. FINTRAC’s examination found that Cambrian Credit Union was not properly risk rating clients who were conducting higher risk transactions. Additionally, Cambrian Credit Union was not considering the impact of the location of its clients and their transactions to their overall risk. Furthermore, Cambrian Credit Union was not assessing the risk related to new developments and technology that was being implemented.

Overall, the analysis of the risk factors as they relate to Cambrian Credit Union’s business, including likelihood and impact, was missing. Without this information, Cambrian Credit Union may not be applying effective risk mitigation measures to high-risk areas. A reporting entity is required to consider all the prescribed risk factors in relation to its business and identify the risks associated with each. Once the risks are identified, it should provide a written narrative to explain its rationale for the level of money laundering and terrorist activity financing risk that it is exposed to. If a reporting entity identifies situations that represent a high risk for money laundering and terrorist activity financing activities, it also needs to control these risks by implementing mitigation measures, including conducting enhanced monitoring and keeping client information up to date.

Violation #4 is classified by regulations as a Serious violation. The imposed penalty takes into account the criteria in section 73.11 of the Act and section 6 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Administrative Monetary Penalties Regulations.

Related link

• News Release : FINTRAC imposes an administrative monetary penalty on Cambrian Credit Union