Executive Summary
According to the United Nations, money laundering is “any act or attempted act to disguise the source of money or assets derived from criminal activity.” The annual value of global money laundering is estimated to be between US$800 billion and US$2 trillion, while money laundering in Canada in 2011 was estimated to be between $5 billion and $15 billion.
The Standing Senate Committee on Banking, Trade and Commerce (the Committee) began a five-year statutory review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act in February 2012. In addition to written briefs from those unable to appear in person, the Committee heard from more than 40 witnesses, including representatives from federal, provincial and international departments and agencies, as well as the private sector.
The report summarizes the oral and written evidence received by the Committee during the review, and contains 18 recommendations designed to improve the effectiveness of Canada’s anti-money laundering and anti-terrorist financing regime (the Regime).
In undertaking the review, the Committee focused on three areas in the broad context of ensuring that the Regime provides “value for money” to the Canadian taxpayer:
- desired structure and performance;
- the appropriate balance between sharing of information and the protection of personal information; and
- optimal scope and focus.
Desired structure and performance
The Committee believes that Canada’s Regime will only be effective, and its performance optimized, if it has the correct structure. The right oversight is required, sources of funds must be identified, specialists must be employed and ongoing review is necessary to ensure that the “results” of everyone’s efforts are maximized in light of the time, monetary and other costs committed by governmental departments and agencies, and by reporting entities. To that end, the Committee makes five recommendations regarding supervision, performance review, funding and expertise.
Appropriate balance between the sharing of information and the protection of personal information
The Committee feels that the effectiveness of Canada’s Regime is enhanced – that is, the “results” are greater – when appropriate and timely information is shared among relevant parties, including the Financial Transactions and Reports Analysis Centre of Canada, law enforcement agencies, reporting entities, the employees of reporting entities and other individuals. The Committee’s eight recommendations in this area are designed to improve case disclosures and the sharing of information, bearing in mind the need to protect personal information, reduce the compliance burden on reporting entities, and ensure the safety of those who assist in investigations and prosecutions of money laundering and terrorist financing.
Optimal scope and focus
The Committee’s opinion is that changes are needed in response to global developments in money laundering and terrorist financing, advancements in technology and the need for public awareness about the Regime. From that perspective, the five recommendations made by the Committee focus on risk-based reporting and an adherence to global standards, and to create public awareness.
The Committee is of the view that implementation of the 18 recommendations would lead to a more effective anti-money laundering and anti-terrorist financing regime in Canada.