Editor’s Note
This report highlights the significant financial and legal consequences for businesses that fail to comply with anti-money laundering regulations. The substantial penalty underscores the critical role reporting entities play in Canada’s financial security framework.
A Vancouver-based jewelry company has been ordered to pay a $264,000 penalty after Canada’s financial intelligence unit found it failed to report suspicious transactions as required by law.
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) announced the administrative monetary penalty against Spence Diamonds on Tuesday. The regulator stated that during a compliance examination, it found the jeweller did not submit suspicious transaction reports (STRs) when there were reasonable grounds to suspect that transactions were related to money laundering or terrorist financing.
Businesses dealing in precious metals and stones, like jewelers, are considered reporting entities under Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act. They are legally obligated to implement a compliance program, keep records, verify client identity, and report certain transactions, including large cash transactions and suspicious activities, to FINTRAC.
The penalty comes amid increased regulatory scrutiny on sectors considered high-risk for money laundering, including luxury goods and jewelry. FINTRAC has recently levied several significant fines against other businesses for non-compliance.
Spence Diamonds, which operates stores in British Columbia, Alberta, and Ontario, has agreed to pay the penalty. The company stated it has since enhanced its compliance protocols and training.