Money laundering laws not working, Senate committee says
Banking committee recommends better information sharing, reporting
The laws meant to deal with money laundering and terrorist financing in Canada aren't working and need a major overhaul to be effective, according to a Senate banking committee report released Wednesday.
The time for incremental change of the country's anti-money laundering and anti-terrorist financing laws, described as the regime, has passed, the report says. The committee wants to see changes that make Canada:
- Better able to detect, deter, investigate and prosecute money laundering and terrorist financing.
- Share information at the right time, and change the scope and focus of current laws.
- Direct the legislation to ensuring that people and businesses report the required information to the appropriate entity on time.
"The committee feels that there is a lack of clear and compelling evidence that Canada's regime is leading to the detection and deterrence of money laundering and terrorist financing, as well as contributing to law enforcement investigations and a significant rate of successful prosecutions," the report says.
"It is possible that some witnesses were unable to share confidential information in a public meeting. It is also possible that information about the success or failure of the regime is not being collected. In any event, the committee feels that the current regime is not working as effectively as it should, given the time, money and other resources that are being committed by reporting entities, a variety of federal departments and agencies, other partners and taxpayers."
Senators on the committee said they heard from 40 witnesses, as well as additional witnesses through written submissions, but didn't get enough information to determine whether the current system is helping officials investigate and prosecute cases.
Senators push for oversight body
FINTRAC, the federal agency that gathers and analyzes reports on financial transactions, puts out information to other government agencies like the RCMP. The committee says FINTRAC made 777 case disclosures to law enforcement and other government agencies in the 2010-11 fiscal year.
Money laundering in Canada was estimated to be between $5 billion and $15 billion in 2011, the report said.
A previous report on the legislation around money laundering and terrorist financing recommended forming a working group to look at information sharing, the concerns of organizations covered under the law, and the roles each government agency play. The committee says it would like to see that group formed and supervising new strategies, as well as reporting to Parliament every year on the number of investigations, prosecutions and convictions, and money seized.
The agencies working under the money laundering law, including the Canada Border Services Agency, the RCMP and Canada Revenue Agency, got $64.3 million in direct funding in 2010-11, the report says.
The committee also recommends letting federal law enforcement agencies have direct access to FINTRAC's database to save time, but says the privacy commissioner should be involved in developing guidelines for access.