The global anti-money laundering (AML) and counter-
terrorist financing (CTF) compliance landscape has been
changing at a phenomenal rate over the last 10 years.
AML/CTF has moved from being a mere second thought
in the minds of Boards of Directors at leading financial
firms, to an issue that now drives business decisions as
organizations work to find their way through the myriad
of regulation to meet their obligations.
Enforcement in many parts of the world is strict
and aggressive. Companies, as a result, face the
unpleasant risk of media headlines if compliance
with AML/CTF requirements is found to be wanting.
Besides the financial cost of potentially record fines,
damage to reputation is a very real and significant
cost. Witness the extraordinary press coverage and
other attention that has accompanied record fines
being imposed on global banks for breaches of AML
regulations, particularly in the US and the UK. In one
case, a fine of US$1.9 billion was levied by the US
Department of Justice to settle a money laundering
case as a result of alleged AML regulatory breaches
and inadequate controls. A quick scan of the reputation
impact shows the unenviable attention in the world’s
media as well as the other potential fall-out related to
litigation, hearings and remediation costs.
But how does this all relate to Canada? It is important
to set the scene in order to see how, to meet
international expectations, Canada has had to up
its game in the fight against money laundering and
terrorist financing. One might argue that since the
maximum administrative monetary penalty that the
Canadian regulatory body, Financial Transactions and
Reports Analysis Centre of Canada (FINTRAC), has
the capacity to issue is $500,000, that the financial
cost of lax compliance does not justify the expense of
a robust, thorough and complete AML/CTF program.
However, Canadian-based organizations are operating
in an environment where increasingly, non-compliance
will not be tolerated. And, the real cost of exposure of
non-compliance will be greatly in excess of regulatory
penalties as a result of reputational damage, potential
litigation and other remedial costs. As a result, it is in
the interest of companies to protect their reputations
and profit margins by establishing and maintaining
effective AML/CTF regimes.
But the situation in Canada is anything but static.
Tides are turning; the general consensus is that it is
only a matter of time before the prevalence and size
of administrative monetary penalties increases within
Canada. In addition, we are seeing increased focus on
regulatory enforcement. Our clients have responded
to the changing environment with increasing requests
for effectiveness testing of AML/CTF regimes,
implementation of training programs, general support
for identifying money laundering and terrorist financing
concerns and recommending controls to mitigate
this risk. They are responding to the serious call for
accountability required by regulatory authorities.
is a Manager in KPMG’s Forensic practice where she serves as a specialist in Anti-Money
Laundering Services. She joined KPMG in May 2011 and has worked from KPMG’s London,
England and Toronto offices. Candice has been involved in a variety of projects relating to
anti-money laundering (AML) processes and procedures including assisting clients with
regulatory enquiries, remediation, and independent effectiveness testing. Prior to KPMG,
Candice worked within the financial services industry specifically aligned to AML, holding
compliance positions within two global investment banks.
Candice Ramlogan
Contact:
candiceramlogan@kpmg.ca
or
(647) 777- 5333
© 2013 KPMG LLP, a Canadian limited liability partnership and a member firm of the KPMG network of independent member firms
affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.
At Risk
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Volume 7, No. 1
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