From the Chronicles of: Monte Friesner
April 12, 2016
DID FINTRAC FAIL TO SERVE THE PUBLIC GOOD BY WITHHOLDING NAME OF OFFENDING BANK ?
A firestorm of protest continues to emanate from the financial community in Canada, because the country's anti-money laundering regulator, FINTRAC, has declined to release the name of the bank against which it imposed a CAN$1.1m fine, deserves an answer. Notwithstanding that FINTRAC routinely releases the identifies of other non-bank financial institutions (NBFI) that it names & shames, the agency continues to shield the name of the offending bank from disclosure.
All of Canada's major banks have reportedly denied that they are the guilty parties, leaving the small regional banks, which are unlikely, and the Canadian branches of foreign banks, where the guilty party is most probable. The ostensible reason given by FINTRAC, regarding the failure to name the bank, would involve a lengthy appellate process; if this was truly the case, then why does the agency generally release the names of the non-banks that it sanctions and fines ? I frankly cannot buy this argument.
The other FINTRAC argument is that, if the bank is named, then all its correspondent accounts may be terminated. I do not buy that argument either; if the unnamed bank loses its correspondents, the such action is necessary for any risk-based compliance program of the banks it is doing business with. The bad bank brought the hardship on itself.
Canada's big banks have a valid point: if the offender is not named, then all the banks, which are most likely not involved, are now under the cloud of suspicion ? Also, the business public has a right to know who it should avoid. Canada's regulators are clearly not sensitive to the greater good here, and they should be called on the carpet for it, in the court of public opinion, to discourage similar actions in the future.