Federal Government Seeks to Increase Money-Laundering Penalties by 40-Fold

The federal government is planning to increase penalties for money laundering by 40 times as part of a series of measures to combat the issue.

Under the proposal, the maximum administrative penalty for banks and other reporting entities would rise to $20 million per violation, up from $500,000.

As outlined in the fall economic statement released on Monday, the government also intends to raise fines for criminal offenses by 10 times and offer more guidance on jail terms.

Additionally, plans include establishing a new task force for law enforcement and the financial sector to exchange and analyze information on “high-end” money laundering schemes, particularly those related to fentanyl trafficking.

Money laundering has garnered increased attention in recent years, with revelations that criminals in the U.S. utilized TD Bank to launder over $969 million in illegal drug profits.

U.S. regulators compelled TD to pay $4.42 billion for its compliance failures, partly due to laws allowing them to impose fines of US$500,000 per day on non-compliant banks.

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