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Senate Committee Says Canada’s Anti-Money Laundering and Terrorist Financing Regime Not Working Effectively

Ottawa (March 20, 2013) – Canada needs to strengthen its Regime to fight money laundering and terrorist financing says a report entitled Follow the Money: Is Canada Making Progress in Combatting Money Laundering and Terrorist Financing? Not Really tabled today by the Standing Senate Committee on Banking, Trade and Commerce.

Providing insight into the measures and practices to curtail money laundering and terrorist financing which on a global basis is estimated at $800 billion to $2 trillion US dollars annually, the report contains 18 recommendations for government.

“The fight against money laundering is a continual game of catch up. Make no mistake, criminals are very creative and their methods of laundering money are endless,” says Senator Irving Gerstein, Chair of the Committee. “Keeping pace in an increasingly challenging environment is becoming more difficult particularly as technology evolves. The Committee’s 18 recommendations update the legislative tools, regulatory framework and resources available in an effort to make Canada’s Regime both more effective and efficient.”

The Committee’s recommendations are based on three key priorities. The first priority is that Canada’s Regime performs to its full potential. The second is to strike the right balance between the timely sharing of information, the protection of personal information, and the safety of those who assist investigations. The third priority is to ensure that Canada’s Regime reflects global developments in money laundering, advancements in technology, and the need for public awareness. The ultimate objective is that tax payers get value for their money.

“I feel that currently we are not getting full value for our efforts given the time, money and other resources that are being allocated to this problem,” says Senator Céline Hervieux-Payette, Deputy Chair of the Committee. “We clearly need a consolidated approach if we want to win this fight. Moreover, an international approach is of the utmost importance if we want a successful result in Canada. The time for incremental changes to the Regime is over.”

Money laundering became a criminal offence under Canada’s Criminal Code in 1989. Prior to 2000, Canada’s Regime applied only to transactions conducted by financial institutions. Legislation enacted in 1991 required them to keep records of cash transactions of $10,000 or more, to undertake client identification procedures and to report suspicious transactions directly to law enforcement agencies. In 2000, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) was created to gather and analyse reports from other entities and to provide relevant information to law enforcement and other government agencies. Following the 2001 terrorist attacks in the United States, the Proceeds of Crime Act was amended as part of Canada’s efforts to combat terrorism.

The legislation requires a parliamentary review of the administration and operation of the Act every five years. This is the second five-year review. The Committee’s current review follows consultations initiated by the Department of Finance and the release of two consultation papers with proposals to improve the current system.

In the course of the study, the Committee received testimony from federal departments and agencies, as well as from international and private sector organisations on all aspects of Canada’s Regime to combat money laundering and terrorist financing.

The Committee’s work reflects the rapidly evolving nature and the magnitude of money laundering and terrorist financing activities in this country. The RCMP estimates that in 2011, between $5 and $15 billion was laundered in Canada.

To read the report and recommendations or learn more about the Standing Senate Committee on Banking, Trade and Commerce, go to http://senate-senat.ca/banc-e.asp.

The Senate of Canada is on Twitter: @SenateCA, follow the committee using the hashtag #BANC.