FINTRAC Fines Atlantic Lottery C$212,025 for AML Violations

FINTRAC Imposes C$212,025 Penalty on Atlantic Lottery – Compliance Failures Under Canada’s Anti-Money Laundering Law Identified

Key Takeaways

• FINTRAC has imposed an administrative monetary penalty of C$212,025 on Atlantic Lottery.
• The penalty relates to three violations of Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated regulations.
• Findings include failure to submit a suspicious transaction report and shortcomings in compliance policies and risk assessment.
• FINTRAC confirmed there are no allegations of money laundering, terrorist financing, criminal activity or wilful misconduct by Atlantic Lottery or its players.
• Atlantic Lottery has paid the penalty and concluded the examination.

FINTRAC Penalty Follows Compliance Examination

The Financial Transactions and Reports Analysis Centre of Canada, known as FINTRAC, has imposed an administrative monetary penalty of C$212,025 on Atlantic Lottery. The decision follows a compliance examination that identified three violations of Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its associated regulations.

FINTRAC stated that the violations are administrative in nature. The regulator clarified that its findings do not include allegations of money laundering, terrorist financing, criminal activity or wilful misconduct by Atlantic Lottery or its players.

The case relates specifically to compliance obligations under Canada’s anti-money laundering and anti-terrorist financing framework. As a reporting entity under the Act, Atlantic Lottery is required to meet defined standards for monitoring, reporting and internal controls.

Three Specific Violations Identified

According to FINTRAC, Atlantic Lottery committed three administrative violations.

First, the operator failed to submit a suspicious transaction report where there were reasonable grounds to suspect that a transaction or attempted transaction was related to the commission or attempted commission of a money laundering offence or a terrorist activity financing offence.

Second, the company failed to develop and apply written compliance policies and procedures that are kept up to date and approved by a senior officer. Such policies form part of the internal compliance framework required under the Act.

Third, Atlantic Lottery did not assess and document the risk of a money laundering or terrorist activity financing offence, taking into account the prescribed risk factors set out in the legislation and regulations.

Together, these findings relate to reporting obligations, governance requirements and formal risk assessment procedures. FINTRAC did not indicate that the violations involved confirmed criminal conduct, but rather failures to meet statutory compliance standards.

FINTRAC Emphasizes Role of AML Framework

In commenting on the decision, Stéphane Sirard, acting director and CEO of FINTRAC, highlighted the purpose of Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime.

He stated that the regime is designed to protect the safety of Canadians, the security of Canadian businesses and the integrity of Canada’s financial system. The obligations set out in the Act are intended to deter criminals and terrorists from operating within the legitimate economy.

Sirard also noted that compliance ensures FINTRAC receives the reporting necessary to generate actionable financial intelligence. This intelligence supports law enforcement and national security investigations.

He added that FINTRAC will take firm action when required to ensure that businesses fulfill their obligations under the law.

Atlantic Lottery Accepts Penalty and Concludes Examination

Atlantic Lottery reiterated that the findings are administrative and do not involve allegations of money laundering, terrorist financing, criminal activity or wilful misconduct by the organization or its players.

The company stated that it takes its regulatory and compliance obligations seriously and remains committed to maintaining a robust anti-money laundering compliance program across its operations. According to Atlantic Lottery, it has established policies, procedures and controls designed to detect and deter money laundering and other financial crime.

The operator also said it works closely with regulators, law enforcement and industry partners to strengthen its measures on an ongoing basis.

While expressing confidence that its compliance program meets or exceeds its obligations, Atlantic Lottery said it decided not to dispute the penalty through a legal appeal. The company stated that it would not be in the best interest of Atlantic Canadians to divert funds that would otherwise be returned to provincial shareholders. As a result, it has paid the administrative penalty, bringing the examination to a close.

Atlantic Lottery further indicated that it looks forward to continuing to work with FINTRAC on improvements to its anti-money laundering compliance program and on ensuring that the regulatory framework keeps pace with changes in the Canadian gambling landscape.

Regulatory Implications for Gambling Operators

The case underlines that gambling operators subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act must maintain up to date written compliance policies, conduct and document formal risk assessments, and file suspicious transaction reports where required.

FINTRAC’s action demonstrates that administrative penalties can be imposed for failures in internal controls and reporting processes, even where no underlying criminal conduct is alleged. For operators and stakeholders in the gambling sector, compliance examinations may therefore focus not only on detected financial crime, but also on documentation, governance and procedural standards.

Our Assessment

FINTRAC has imposed a C$212,025 administrative monetary penalty on Atlantic Lottery for three compliance violations under Canada’s anti-money laundering and anti-terrorist financing legislation. The regulator confirmed that the findings are administrative and do not involve allegations of criminal activity. Atlantic Lottery has paid the penalty and concluded the examination, while stating its intention to continue strengthening its compliance framework in cooperation with FINTRAC.