Money Laundering

Date: November 5, 2020
Classification: Unclassified
Branch / Agency: CSCCB / PS

Issue:

Measures taken by the Government to combat money laundering and strengthen Canada’s Anti-Money Laundering / Anti-Terrorism Financing Regime.

Proposed Response:

Background:

The Anti-Money Laundering Regime (AML) was established in 2000, with the Anti-Terrorist Financing (ATF) mandate being added in 2001. The Regime’s legislative framework is the Proceeds of Crime (Money Laundering) and Terrorist Financing Act combined with operational powers under various standing authorities (e.g. the Criminal Code, Customs Act, United Nations Act). This is the main framework for addressing money laundering in Canada, and an important and highly effective tool for blocking access to funds by organized crime groups, disrupting organized crime activities and protecting the integrity of the Canadian financial sector. The AML/ATF is a horizontal initiative involving more than 13 departments and agencies, including Public Safety (PS) and PS Portfolio agencies, such as the RCMP, CBSA and CSIS. The Regime’s work is coordinated through an ADM-level Committee co-led by the Department of Finance and Public Safety Canada.

Budget 2019 proposed a number of measures to modernize Canada’s anti-money laundering and anti-terrorist financing framework; chief among them is strengthening inter-agency cooperation, financial intelligence and information sharing through the Anti-Money Laundering Action, Coordination and Enforcement (ACE) team. This five-year, $24 million pilot initiative will bring together dedicated experts from across intelligence and law enforcement agencies to strengthen inter-agency coordination and cooperation to identify and address significant money laundering and financial crime threats.

Funding was also established for the creation of a multi-disciplinary Trade Fraud and Trade-Based Money Laundering (TBML) Centre of Expertise to strengthen capacity at Canada Border Services Agency and Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to target trade fraud and identify TBML. This Centre of Expertise will complement the efforts of the ACE Team.

Budget 2019 also provided $68.9 million over five years beginning in 2019-20, and $20 million per year thereafter, in net-new funding to strengthen RCMP’s Federal Policing operational and investigative capacity, including to fight money laundering.

The 2018 House of Commons Committee on Finance (FINA) Report, entitled “Confronting Money Laundering and Terrorist Financing: Moving Canada Forward,” was tabled on November 8, 2018. The Report consists of 32 recommendations that cover legislative and regulatory gaps, information sharing, intelligence and enforcement capacity. Government of Canada partners continue to be active in policy work to support the development of new anti-money laundering approaches, and explore options to address recommendations containing in the Report.

Canada is also actively involved in international efforts to combat money laundering and terrorism financing. The Regime engages with the Financial Action Task Force (FATF), an intergovernmental body that sets global standards for AML/ATF whose goal is to maintain the integrity of the global financial system. In 2015-16, the FATF conducted a 4th Round of evaluation of Canada against its technical compliance and effectiveness standards. The report found that Canada has a strong set of anti-money laundering and anti-terrorist financing legislation and regulations. However, a number of weaknesses were identified, including that some types of businesses are not covered by the regime, a lack of availability of accurate beneficial ownership information and its use by competent authorities, and inadequate resourcing devoted to money laundering investigations and prosecutions.

British Columbia (B.C.), in particular, has been focusing its efforts to address money laundering. On September 27, 2018, the province announced a review of vulnerabilities in the real estate and financial sectors and provided specific case examples as a way of illustrating to the public the ways in which money is being laundered. Specific to this, the B.C. and Federal governments have created an ad-hoc working group whose mandate is to enhance communication, information sharing, and alignment amongst relevant operational and policy partners to explore and better address issues and risks related to fraud, money laundering, and tax evasion through real estate in B.C. The B.C. review and the Canada-B.C. working group complement the broader efforts by the Federal Government to enhance Canada’s Anti-Money Laundering/Anti-Terrorism Financing regime by providing better insight into vulnerabilities, gaps and potential solutions to these issues, including efforts to enhance the ability of law enforcement to investigate professional money launderers.

On May 15th, 2019, the Government of B.C. announced a public inquiry into money laundering, headed by B.C. Supreme Court Justice Austin F. Cullen. The inquiry will examine money laundering in B.C. in the financial, real estate, gaming, corporate and professional sectors. The Commission of Inquiry into Money Laundering kicked off in October, with 5 province-wide public meetings set, giving the public an opportunity to provide their input regarding their issues and concerns. Federal officials from Public Safety Canada, the RCMP and the Department of Finance Canada have provided briefings to the commission.

Contacts:

Prepared by: Natasha Maurovic, Senior Policy Analyst, (613) 869-8484
Approved by: Trevor Bhupsingh, A/ADM, (613) 613-769-3042

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