Advocate Early, Advocate Often

FINTRAC’s enforcement process offers multiple opportunities for engagement, and entities that take advantage of each one are far better positioned than those that wait passively for a decision.

The first opportunity is of course the examination stage, when the entity can submit information and submissions that may determine whether FINTRAC conducts a follow-up examination, recommends an AMP, discloses the matter to law enforcement (in extremely serious cases only), or takes no further action.

Then, if a Notice of Violation is issued, entities have 30 days to pay or submit written explanations. Written representations are the reporting entity’s critical record-building opportunity: every fact, argument and mitigating factor must be put before the Director; bare-bones representations will not be permitted to be supplemented if the case goes to court. The Director decides on a balance of probabilities whether a violation occurred, which means it should weigh all the explanations it has received before making a decision.

Lawyering up at this stage brings several key advantages:

Case analysis and procedural fairness. Counsel can test the factual and evidentiary basis of FINTRAC’s allegations, identify procedural deficiencies, raise them early and preserve them for appeal.
Mitigation and negotiation. Counsel can marshal evidence of compliance, remedial steps, co-operation and other mitigating factors, and engage with FINTRAC between the filing of the written representations and the issuance of a Notice of Decision to seek a reduction or cancellation of any recommended AMP.

FINTRAC’s enforcement process ends with a Notice of Decision, issued 90 days after the representations have been filed. In the Notice of Decision, FINTRAC’s Director may impose, reduce or cancel the penalty previously suggested in the Notice of Violation.

A person or entity who receives an adverse decision from the Director may appeal that decision to the Federal Court within 30 days. For minor violations with penalties under $10,000, the Director’s decision is final and is not subject to appeal.

On appeal, the Federal Court does not rehear the case or accept new evidence; it reviews only the material that was before the Director and asks whether the decision was lawful and reasonable on the record.

From Compliance to the Courtroom: Navigating Canada’s Rapidly Escalating Anti-Money Laundering Enforcement Landscape

En cours de traduction.

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