Financial Crime World

Penalties and Consequences for Financial Crimes in Canada: A Look at the Legislation

In Canada, financial crimes such as money laundering, terrorist financing, and regulatory breaches carry significant penalties to discourage individuals and entities from engaging in such activities. Below is a brief overview of some key sections from the Canadian legislation that deals with these offenses, their associated penalties, and the collection of those penalties.

Collection of Penalties

Any person or entity that fails to remit a penalty payable under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) to the Receiver General must pay interest on the amount of the penalty. The interest is calculated at the prescribed rate for the period beginning on the first day after the day the penalty was due and ending on the day it is paid. (Section 73.28)

Garnishment

  • [Notification]: If the Director believes a person or entity is or might become liable for a penalty or interest under this part, they may, by written notice, require the first person or entity to pay the penalty or interest directly to the Receiver General on behalf of the second person or entity.
  • [Employer Requirement]: If an employer is required to pay penalties or interest to the Receiver General, this requirement applies to all future payments of remuneration and must be paid out of each payment. The Director’s receipt serves as discharge of the liability.

Write-off

The Director has the power to write off, in whole or in part, a penalty or interest payable by a person or entity under the PCMLTFA. However, the writing off of the penalty or interest does not affect Her Majesty’s right to collect and recover the penalty or interest. (Section 73.3)

General Provisions

  • [Evidence]: Notice of violations, decisions, documents, and certificates under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act are admissible in evidence without the need for additional proof of their authenticity or official character.
  • [Time Limit]: Section 73.5 sets a two-year time limit for commencing proceedings related to a financial crime violation. Once the subject-matter of the proceedings becomes known to the Canadian Centre for Security Intelligence, the Centre can issue a certificate attesting to the day the information was received, which is admissible in court without further proof under section 73.23.

Offenses and Punishments

Various sections of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act outline penalties for individuals and entities that contravene specific regulations.

Penalties for Contravention

The penalties for these offenses include:

  • Fines of up to $500,000 for individuals or $2.5 million for entities on summary conviction.
  • Fines of up to $5 million for individuals or $25 million for entities on conviction on indictment.
  • Potential imprisonment.

Some sections outline penalties for failing to comply with reporting requirements and engaging in structured financial transactions. These sections carry similar penalties. (Sections 75, 77, 77.1, and 77.3)

Reporting Offenses

  • [Failure to Report]: Individuals or entities that fail to report financial transactions may be subject to fines and imprisonment.
  • [Structured Financial Transactions]: Engaging in structured financial transactions without reporting them can result in similar penalties.

Liability of Officers and Directors

If a corporation commits an offense under the Act, directors, officers, or agents can be held responsible, even if the corporation itself has not been prosecuted or convicted. (Section 78)

Exemptions

Peace officers or people acting under their direction are exempt from the Act’s offenses when they undertake actions for the purpose of investigating a money laundering or terrorist financing offense. (Section 80)

Time and Venue

Complaints or information related to offenses under this Act can be heard, tried, or determined by a court if the accused resides or carries on business within the territorial jurisdiction of that court. (Section 82)

Please note that this article provides a brief look into some of the penalties and consequences for financial crimes under Canadian law. It is important to consult the actual legislation or legal counsel for more detailed information.