Administrative monetary penalty on Commerciale I.C. - Pacific Inc.
[2026-02-05]
Commerciale I.C. - Pacific Inc., also operating as I.C. - Pacific Trading Inc., a money services business, in Montréal, Quebec, was imposed an administrative monetary penalty of $224,235 on September 2, 2025, for committing 5 violations. The violations were found during the course of a compliance examination. Commerciale I.C. - Pacific Inc. has appealed the decision to the Federal Court.
Nature of violation
- Violation #1
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Failure to report electronic funds transfer reports no later than five working days after the transfer – Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, subsection 132(1)
FINTRAC conducted a review of 22 electronic funds transfer reports (incoming and outgoing) that were submitted during the scoping period. FINTRAC’s review revealed that in 8 instances, Commerciale I.C. - Pacific Inc. failed to submit electronic funds transfer reports (incoming and outgoing) within five working days as required by subsection 9(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and subsection 132(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations.
When a report is not submitted within the prescribed period, FINTRAC is unable to analyze, assess and disclose information in a timely manner. FINTRAC may need the information to provide intelligence to law enforcement, or to provide advice to the Minister on measures to put in place to protect Canada's financial system. In the case of terrorism financing in particular, late submissions can be detrimental to the safety of Canadians.
Violation #1 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 #2
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Failure to develop and apply written compliance policies and procedures – Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, paragraph 156(1)(b)
FINTRAC’s review revealed that Commerciale I.C. - Pacific Inc.’s written policies and procedures were not fully developed, with incomplete and missing requirements in critical areas, such as: business relationships, ongoing monitoring, politically exposed persons and heads of international organizations, transaction reporting policies and procedures, 24-hour rule, travel rule, and Ministerial Directives and related transaction restriction.
Policies and procedures are critical in a compliance program as they communicate the important principles of compliance and standards that employees and delegated persons with compliance responsibilities must meet. Documented policies and procedures also serve to ensure clarity and consistency in business operations. Failing to develop, apply, and keep written compliance policies and procedures up to date can result in not meeting other requirements set out in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated Regulations, and undermines sound business practices designed to minimize a business’ exposure to money laundering and terrorist activity financing.
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
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Failure to assess and document the risk referred to in subsection 9.6(1) of the Act, taking into consideration prescribed factors – Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, paragraph 156(1)(c)
FINTRAC’s review of Commerciale I.C. - Pacific Inc.’s risk assessment document found it to be incomplete, as it did not adequately address the prescribed factors. Commerciale I.C. - Pacific Inc.’s risk assessment document failed to evaluate key risk factors, including its products and delivery channels, geographic locations, clients and business-based relationships, as well as other risks specific to its operations.
Assessing and documenting money laundering and terrorist financing risks ensures that reporting entities are aware of their potential exposure and vulnerability. Failing to assess and document the risks of money laundering and terrorist financing prevents reporting entities from identifying areas of its operations that are vulnerable to being exploited for these purposes and prevents appropriate mitigation measures from being put in place. This can also lead to failing to identify high-risk clients and business relationships for which enhanced risk mitigation measures must be applied. This can further result in the failure to detect and report suspicious transactions to FINTRAC.
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
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Failure to institute and document the prescribed review referred to in subsection 9.6(1) of the Act – Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, paragraph 156(1)(f)
Pursuant to subsection 9.6(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Act) and paragraph 156(1)(f) of the Regulations, a person or entity shall institute and document a review of their policies and procedures, their risk assessment and their training program for the purpose of testing their effectiveness. Under subsection 156(3) of the Act, such review is required to be carried out every two years by an internal or external auditor of the person or entity, or by the person or entity if they do not have such an auditor.
During the examination, FINTRAC determined that Commerciale I.C. - Pacific Inc. had not conducted a comprehensive review of its compliance program beyond what was documented.
For example, the documentation provided by Commerciale I.C. - Pacific Inc. was insufficient for FINTRAC to determine the following:
- The period that was covered by the review;
- The results of the tests that were performed, if any; and
- The conclusions, including deficiencies, and action plan, if any.
Changes to an organization's structure, personnel, policies and processes, and environment may require over time, if not immediately, revisions to the compliance program that is in place. The purpose of the prescribed review is to ensure that reporting entities’ compliance program is continuously adapted to continue to comply with the requirements of the Act and associated Regulations. The prescribed review of the compliance policies and procedures, and that of the ongoing training program tests the reporting, client identity verification, record keeping and appropriate mitigation measures application. The prescribed review of the risk assessment ensures that reporting entities are adequately assessing, identifying and mitigating the risks of money laundering and terrorist financing over time.
Violation #4 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 #5
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Failure to comply with a Ministerial directive – Proceeds of Crime (Money Laundering) and Terrorist Financing Act, section 11.43
In accordance with section 11.43 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the Act), a person or entity to which a Ministerial Directive under Part 1.1 of the Act applies shall comply with it within the time and in the manner specified in the directive.
FINTRAC determined that Commerciale I.C. - Pacific Inc. conducted multiple transactions that either originated from Iran or were bound for Iran, which Commerciale I.C. - Pacific Inc. failed to report to FINTRAC, as required under the July 25, 2020, Ministerial Directive on the Islamic Republic of Iran. Specifically, the examination revealed 110 instances where the obligation for reporting electronic funds transfers under the Ministerial Directive was not met for transactions that occurred during period March 1, 2022 to August 31, 2022. Moreover, since Commerciale I.C. - Pacific Inc.’s policies and procedures did not cover the requirements of the July 25, 2020, Ministerial Directive on the Islamic Republic of Iran, FINTRAC determined that Commerciale I.C. - Pacific Inc. was non-compliant with the Ministerial Directive on the Islamic Republic of Iran since its implementation on July 25, 2020.
Ministerial Directives are targeted measures to protect Canada's financial system from being used as a vehicle for money laundering and terrorist financing. Compliance policies and procedures that do not meet the measures set out in a Ministerial Directive can result in the failure to comply with priority areas intended to detect, prevent and deter specific threats to Canada's financial system and the safety of Canadians. As a result, such a failure represents very significant harm to the achievement of the objectives set out in paragraph 3(d) of the Act.
Violation #5 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.
Related link
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