Consultation to Update Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime

The Honourable Jim Flaherty, Minister of Finance, has launched a consultation aimed at updating Canada’s regime for combating money laundering and terrorist financing. The consultation paper, “Strengthening Canada’s Anti-Money Laundering and Anti‑Terrorist Financing Regime,” puts forward several proposals that may be considered for future changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

The proposals in the paper are organized around the following key areas:

·       strengthening client due diligence standards;

·       closing gaps in Canada’s regime;

·       improving compliance, monitoring and enforcement;

·       strengthening information sharing in the regime;

·       introducing a list of potential countermeasures; and

·       updating reporting requirements.

The paper will also serve to inform the Parliamentary review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act that will be conducted in 2012 by the Standing Senate Committee on Banking, Trade and Commerce. The deadline for comments is March 1, 2012.

Trends in Canadian Suspicious Transaction Reporting (STR) Part II – October 2011

This report (Trends in Canadian Suspicious Transaction Reporting (STR) Part II – October 2011) is the second in a series of FINTRAC publications that are intended to provide strategic financial intelligence and feedback to reporting entities about suspicious transactions reports (STRs). The first FINTRAC report on Trends in Canadian Suspicious Transaction Reporting, released in May 2011, presented a preliminary analysis of STRs submitted to FINTRAC between 2001 and 2010, using geospatial and text mining techniques. That report was the first FINTRAC attempt to use the text mining technique and served as the foundation to the current more sophisticated methodology.

This Trends and Typologies report on STRs is a continuation of the first one, and consists of an enhanced automated analysis of English and French STRs submitted to FINTRAC from January 1st, 2007 to December 31st, 2010. It provides a greater focus on select topics related to money laundering and terrorist financing that are described by reporting entities in the Part G narrative of STRs. In order to keep providing feedback to reporting entities in relation to STRs and keep highlighting interesting trends as FINTRAC’s text mining capabilities develop in sophistication, it is our intention to keep producing this series of analytical publications.

There are several sections in this report. Part 1 provides a broad overview of the material introduced in the first report and addresses the new methodology used to analyze STRs in the current report. Part 2 describes the trends observed in the Part G narrative of STRs, by specific sector, and contains the report’s main findings. Part 3 provides a brief overview of the dominant themes related to reasons for suspicion in STRs across all sectors. Conclusions are offered in Part 4.

Consultation Paper on Proposed Amendments to the Proceeds Of Crime (Money Laundering) and Terrorist Financing Regulations on Ascertaining Identity

The Minister of Finance of the Government of Canada is proposing amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations (the Regulations) to strengthen the identification and customer due diligence (CDD) provisions of the Regulations. The proposed amendments are intended to assist reporting entities to better identify customers and understand their activities, thereby improving the ability of reporting entities to identify transactions and activities that are at greater risk for money laundering or terrorist financing.

Given that cooperation between the public and private sectors is critical to the success of Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime, the Department of Finance would like to invite you to comment on a consultation paper setting out the proposed regulatory amendments.

The consultation paper (Proposed Amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations on Ascertaining Identity) is now available on the Department of Finance website (http://www.fin.gc.ca/activty/consult/pcmltfrai-rrpcfatvic-eng.asp).

Global Bribery and Corruption: Impact on Canadian Businesses

On July 1, 2011, the new Bribery Act 2010 came into effect in the UK, presenting many Canadian commercial organizations with new risks and challenges. The legislation can extend to any company which carries on any part of a business in the UK, regardless of where the company was incorporated. Canadian businesses with a connection to the UK need to carefully consider their existing anti-bribery procedures and whether their controls are up to the task.


To help you keep track of these developments, Deloitte’s advisory team has analyzed the new Bribery Act and has been carefully monitoring Canadian anti-bribery actions. Deloitte offers extensive anti-corruption advisory services helping clients manage bribery and corruption risks, and has been involved in some of the largest and most complex anti-corruption investigations and remediation efforts.

Download the Deloitte report (Global bribery and corruption and the impact on Canadian businesses) to understand the changing nature of anti-bribery legislation and enforcement, and how you can take steps to ensure your business is protected.

Global Anti-bribery and Corruption Survey 2011

In Canada, managing bribery and corruption risks has not assumed the importance and urgency seen in other jurisdictions. To date, Canada’s Corruption of Foreign Public Officials Act (CFPOA), has received little attention from corporations and enforcement by officials. This is in stark contrast to the situation in the United States where the Foreign Corrupt Practice Act (FCPA) is robustly enforced. However, there have been important developments on the Canadian anti-bribery and corruption (AB&C) front. The new reality for Canadian companies is one of increased AB&C enforcement activity, both at home and abroad.

KPMG Forensic commissioned a survey of 214 executives (106 in the US and 108 in the UK) who consider themselves “one of the most senior persons in charge of day-to-day AB&C matters at their company.” The three most significant AB&C compliance challenges cited by both US and UK respondents are auditing third parties for compliance, difficulty in performing effective due diligence on foreign agents/third parties, and variations in country requirements and local laws on issues, such as data privacy and facilitating payments.

(Read the Global Anti-bribery and Corruption Survey 2011.)

FATF-XXIII Calendar of Events (July 2011 – June 2012)

The Financial Action Task Force (FATF) year begins in July and ends in June. During this period, the FATF holds three plenary meetings, a meeting of experts on typologies and, depending on the focus of current work, inter-session meetings and meetings of various ad hoc groups. The plenary meetings usually take place in October, February and June of each year.

Most FATF Plenaries take place in the conference facilities of the OECD in Paris. The meeting of experts on typologies takes place in November of each year and is usually now held jointly with an FATF-style regional body in the country chosen by that body. All of these meetings are only open to delegations from FATF members, observer jurisdictions and observer organizations. They are not open to the public.

The FATF Calendar of Events includes the major FATF meetings along with the meetings of other FATF-style regional bodies and some international organizations that also deal with money laundering issues.

Risks and Responses to Organized Crime: Moving Beyond Cash

(Presentation by Jeanne M. Flemming, Director, Financial Transactions and Reports Analysis Centre of Canada, to the International Symposium on Economic Crime, Cambridge, England, September 7, 2011)

“The world continues to turn, and organized crime continues to mutate. In its 2010 report on organized crime, the Criminal Intelligence Service of Canada noted the changing nature of organized crime in Canada. Traditionally, organized crime was understood as a hierarchical structure comprised of culturally homogeneous groups, citing the examples of Italian, Russian or Albanian mafia. The new reality they describe is one where many organized crime groups are loosely structured, competitive networks with fluid linkages between members and associates, with a diverse range of leadership structures. I can confirm that we are seeing increasing evidence of these fluid structures in our own cases.”

“What is more, organized crime once involved cash-based crimes almost exclusively. As a response, anti-money laundering regimes were developed to combat the illegal profits from the illicit narcotics trade and the organized criminal networks that rose to global prominence three or four decades ago. The infusion of that criminal cash into the financial system was a grave risk that demanded a response. It gave rise to the creation of financial intelligence units, like the one that I head. It also brought regulatory controls and compliance obligations that will be familiar to those of you who work in banking, insurance and securities. In essence, what we have now is a system that was built to address that particular risk. The rules, like the crimes they were meant to address, were largely focused on cash transactions.”

“The question that it begs is: how well does such a system address other risks? In practical terms, can a system of rules intended to keep drug money out of the financial system be effective in addressing the risks posed by offences such as fraud and corruption or any number of other profit motivated crimes loosely grouped under the rubric of “white-collar crime?”