Administrative monetary penalty on Synergy Credit Union

[2025-11-27]

Synergy Credit Union, a provincial credit union headquartered in Lloydminster, Saskatchewan, was imposed an administrative monetary penalty of $214,500 on September 26, 2025, for committing 4 violations. The violations were found during the course of a compliance examination. The administrative monetary penalty has been paid in full and the case is closed.

Nature of violation

Violation #1

Failure of a person or entity 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 – section 7 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and subsection 9(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations.

FINTRAC’s examination determined that, in 2 instances, Synergy Credit Union failed to report multiple financial transactions in respect of which there were reasonable grounds to suspect that they were related to the commission or the attempted commission of a money laundering or a terrorist activity financing offence. There were a number of money laundering or terrorist activity financing indicators in the financial transactions; however, Synergy Credit Union failed to report these financial transactions in suspicious transaction reports to FINTRAC.

In each of the two instances, FINTRAC’s examination determined that Synergy Credit Union failed to consider and report transactions conducted following other transactions, which were included in a previously submitted Suspicious Transaction Report to FINTRAC, and that demonstrated the presence of similar suspicious indicators meeting the reasonable grounds to suspect threshold.

In the first instance, the indicators observed during the examination were as follows:

• Suspected use of a personal account for business purposes, or vice-versa.
• Large wire transfers or high volume of wire transfers (including electronic funds transfers) are conducted or received through the account that do not fit the expected pattern of that account.
• Unrelated parties sending email money transfers or other forms of electronic transfers to the same beneficiary with no apparent relation to the recipient.
• Transactions involve persons or entities identified by the media, law enforcement and/or intelligence agencies as being linked to criminal activities.

In the second instance, the indicators observed during the examinations included similar and additional indicators as follows:

• Client refuses to provide information when required or is reluctant to provide information.
• Funds transferred in and out of account on the same day or within a relatively short period of time.
• Suspected use of a personal account for business purposes, or vice-versa.
• Size or type of transactions atypical of what is expected from the client.

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 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 #2

Failure to assess and document the risk of a money laundering or terrorist activity financing offence, taking into consideration prescribed factors – subsection 9.6(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and section 156(1)(c) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations

FINTRAC’s examination determined that Synergy Credit Union’s risk-based assessment was incomplete, as it did not document an adequate assessment of the money laundering and terrorist activity financing risks of the prescribed factors, namely in relation to Synergy Credit Union’s clients and business relationships risk.

While Synergy Credit Union’s risk assessment does outline what factors it considers high risk, most of the high-risk factors are considered on a case-by-case basis. The risk rating determination is a subjective process and does not follow a documented, detailed and consistent process.

In one example observed, a client’s risk rating was reduced from high to medium in error by a compliance staff member. This client is an entity whose beneficial ownership is unknown, which means that the entity must be rated as high risk.

In another example, an entity related to a client that was a subject of previous suspicious transaction reports was not rated as a high risk. Since the entity is related to the client for which a Suspicious Transaction Report was previously filed, the entity’s risk is elevated and enhanced due diligence should be conducted.

FINTRAC’s examination found that Synergy Credit Union did not assess key money laundering or terrorist activity financing risk factors as they relate to its business, including the likelihood and impact of those risks. Without this analysis, the credit union could not effectively apply mitigation measures to high-risk areas. Reporting entities are required to evaluate all prescribed risk factors in the context of their operations and identify the associated risks accordingly.

Violation #2 is classified by regulations as a Serious 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 to take the prescribed special measure for high risk activities – section 9.6(3) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and section 157 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations

FINTRAC’s examination revealed that Synergy Credit Union did not conduct enhanced ongoing monitoring of high-risk clients in accordance with its own policies and procedures. Although Synergy Credit Union’s policy requires annual reviews, 46 of 102 high-risk clients had not been reviewed in over 12 months, and 24 of those had not been reviewed in over 24 months.

Although Synergy Credit Union has procedures for enhanced ongoing monitoring, including more frequent reviews for higher-risk clients, FINTRAC’s examination found these procedures were not being followed in practice. Delays in reviewing high-risk clients hinder the credit union’s ability to identify and respond to suspicious behaviours and transactions, undermining effective risk mitigation as required under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

Violation #3 is classified by regulations as a Serious 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 #4

Failure 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 – section 156(1)(b) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Suspicious Transaction Reporting Regulations

FINTRAC’s examination determined that Synergy Credit Union’s documented policies and procedures were incomplete, as they did not fully and accurately address the requirements of ongoing monitoring and enhanced due diligence.

The policies and procedures did not outline a timeframe for reviewing and updating client information for clients of all risk levels. While documented policies and procedures required high-risk clients to be reviewed annually and medium-risk clients on a biennial basis, those policies and procedures were not always followed, as detailed in Violation #3. In addition, during the examination, Synergy Credit Union confirmed that there is no set timeframe for reviewing low-risk clients.

Moreover, FINTRAC’s examination revealed the documented policies and procedures pertaining to record keeping were not followed in practice. Specifically, during the examination, FINTRAC requested additional information on 29 individual and entity clients. It was found that beneficial ownership documents were missing for 4 clients, entity verification documents were missing for 2 clients, and a documented intended use of account statement was missing for 4 clients.

Violation #4 classified by regulations as a Serious 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.   

Related link

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