Canada’s financial intelligence authority has hit Atlantic Lottery Corporation with a financial penalty of just over $212,000, and the company says it is confident in its internal controls, but has accepted the penalty and will not be contesting the decision.
Atlantic Lottery Says FINTRAC Findings Did Not Involve Criminal Conduct
The sanction was issued by the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) following a review of the operator’s compliance with national anti-money laundering and counter-terrorism financing legislation. The company “fell short” on a number of administrative requirements under federal law, the regulator said.
The issues identified included failure to file a report in respect of a transaction that gave rise to reasonable suspicion; deficiencies in maintaining up-to-date internal compliance procedures; and inadequate documentation of the assessment of exposure to the risks of financial crime. These discrepancies are considered critical to help authorities detect and prevent illicit financial activity.
Atlantic Lottery said it has paid the penalty in full, effectively closing the case. The organization said the regulator’s findings were administrative and did not involve any allegations of money laundering, terrorist financing or any other criminal activity involving the company or its customers.
In explaining its decision not to appeal, the corporation said a legal challenge would take money away from the four Atlantic provinces it serves. The company provides lottery products, online gaming, sports betting and video lottery services to New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador.
Atlantic Lottery Penalty Comes Amid Record FINTRAC Enforcement Activity
Atlantic Lottery said it accepted the outcome, but its compliance framework meets or exceeds regulatory expectations. It said it kept working with oversight bodies and law enforcement to beef up safeguards to detect and deter financial crime.
FINTRAC said the enforcement actions are to ensure that businesses comply with their obligations to protect the integrity of Canada’s financial system. The agency said reporting suspicious transactions was key to producing intelligence that fed investigations by police and national security organizations.
The penalty also comes as enforcement activity is increasing more generally. Over the past year, FINTRAC has issued 35 notices of non-compliance in a range of sectors, the highest number in a single year since it was given the power to levy penalties. The sanctions together were worth more than $247 million.
Similar actions will continue where appropriate, sending a message that all regulated entities are expected to have strong compliance systems and meet their reporting obligations, officials have said.