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Table 11: Horizontal Initiatives
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Horizontal Initiative |
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1. Name of Horizontal Initiative: Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime[1] |
2. Name of Lead Department(s): Department of Finance Canada |
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3. Start Date of the Horizontal Initiative: June 2000 |
4. End Date of the Horizontal Initiative: 2009–10 |
5. Total Federal Funding Allocation (start to end date): $329,989[2] ($ thousands) |
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6. Description of the Horizontal Initiative (including funding agreement): The National Initiative to Combat Money Laundering (NICML) was formally established in 2000 as part of the government's ongoing effort to combat money laundering in Canada. Legislation adopted that year, the Proceeds of Crime (Money Laundering) Act (PCMLA), created a mandatory reporting system for suspicious financial transactions, large cross-border currency transfers, and certain prescribed transactions. The legislation also established the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to collect and analyze these financial transaction reports and to disclose pertinent information to law enforcement and intelligence agencies. In December 2001, the PCMLA was amended to include measures to fight terrorist financing activities and renamed the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). At this time, the Horizontal Initiative was also renamed the Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime. The PCMLTFA was amended in December 2006 to address revised international standards and recommendations made in the 2004 report of the Auditor General of Canada and in a 2004 Treasury Board-mandated evaluation of the regime. |
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7. Shared Outcome(s): To detect and deter money laundering and the financing of terrorist activities and to facilitate the investigation and prosecution of money laundering and terrorist financing offences. |
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8. Governance Structure(s): The AML/ATF Regime is a horizontal initiative comprised of both funded and non-funded partners. Funded partners include the Department of Finance Canada, the Department of Justice Canada, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), the Canada Border Services Agency (CBSA)—Immigration and Customs, the Canada Revenue Agency (CRA), and the Royal Canadian Mounted Police (RCMP); non-funded partners include Public Safety Canada (PS) and the Canadian Security Intelligence Service (CSIS). An interdepartmental ADM-level group and working group, consisting of all these partners and led by the Department of Finance Canada, has been established to direct and coordinate the government's efforts to combat money laundering and terrorist financing activities. |
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| 9. Federal Partners | 10. Names of Programs for the Federal Partners | 11. Total Allocation | 12. Forecast Spending for 2006–07 | 13. Actual Spending in 2006–07 | 14. Planned Results for 2006–07 | 15. Results Achieved in 2006–07 | |||||||||
| 1. Department of Finance Canada | (a) AML/ATF Regime |
$3,000 |
$300 |
$297 |
The Department of Finance Canada is responsible for the development of anti-money laundering and anti-terrorist financing policy, including the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its Regulations. The Department of Finance Canada coordinates the activities under the Initiative and has a key role in liaison and consultations with stakeholders. The Department also heads Canadian delegations to international anti-money laundering assemblies, e.g. the Financial Action Task Force (FATF). | The Parliamentary Review of the PCMLTFA concluded with an interim report in 2006; Bill C-25, an Act to Amend the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the Income Tax Act and to make a consequential amendment to another Act, received Royal Assent on December 14, 2006; the Proceeds of Crime (Money Laundering) and Terrorist Financing Registration Regulations and the Regulations amending Certain Regulations Made Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act were published in Part I of the Canada Gazette on March 10, 2007. | |||||||||
| 2. FINTRAC | (a) AML/ATF Regime | $203,285 | $21,300 | $27,200[3] | FINTRAC is an independent agency that receives, collects, analyzes, assesses, and discloses financial transaction information to assist in the detection, prevention, and deterrence of money laundering and terrorist financing activities. FINTRAC operates at arm's length from the police, federal departments and agencies, and international partners to which it can provide financial intelligence. FINTRAC is also involved in various outreach programs to raise awareness of money laundering and terrorist financing issues. |
FINTRAC continued to make case disclosures of financial intelligence to law enforcement agencies and CSIS. The increasingly complex cases that were disclosed pinpointed new suspects and financial transactions, and triggered new investigations or provided significant input to ongoing investigations or prosecutions. FINTRAC also began to plan to incorporate the changes resulting from Bill C-25 into its operations. During the year, FINTRAC conducted compliance examinations in all reporting sectors. FINTRAC compliance staff continued outreach efforts by conducting presentations, meetings, and seminars with reporting entities and associations. Through macro-analysis of its case disclosures and the associated transaction reports, FINTRAC continued to gather valuable insights into suspected money laundering cases and suspected terrorist financing activity. By sharing strategic information, FINTRAC supported the work of policy makers, domestic partners in law enforcement and national security, the financial community, and international partners. |
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| 3. Department of Justice Canada | (a) AML/ATF Regime |
$11,400 |
$1,200 |
$2,304[4] |
The Department of Justice Canada is responsible for undertaking prosecutions, specifically, in the case of the Initiative, those arising out of investigations to which FINTRAC disclosures have contributed. The Department of Justice Canada provides legal advice on policy issues and to police forces. In cases where law enforcement agencies desire additional information from FINTRAC, the Department takes the application for a production order to court to obtain approval. | For 2006–07, PPSC opened 65 files with, among other charges, a charge of either money laundering or a charge under the PCMLTFA. These 65 files contained 124 charges of money laundering and 11 charges under the PCMLTFA, for a total of 135 charges. On top of all these files, Crown counsel worked on 131 carry-over files with, among other charges, a charge of either money laundering or a charge under the PCMLTFA. These files contained 9 charges under the PCMLTFA and 404 charges of money laundering, for a total of 413 charges. In addition, PPSC counsel obtained 2 production orders under s. 60 of the PCMLTFA. | |||||||||
| 4. CRA | (a) AML/ATF Regime |
$29,284 |
$0
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$0
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| 5. Citizenship and Immigration Canada | (a) AML/ATF Regime |
$22,500 |
$0 |
$0 |
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| 6. CBSA | (a) AML/ATF Regime |
$ 22,500 |
$4,500 | $7,500[5] | CBSA Customs officers are responsible for the enforcement of the cross-border currency reporting program, which includes conducting searches, questioning individuals, and seizing non-reported or falsely reported currency and suspected proceeds of crime. In addition, FINTRAC discloses information to CBSA Immigration, which plays a key role in denying the use of Canadian territory to criminals and persons who pose security threats to Canada. | Since January 2003, CBSA has assumed new responsibilities for administering and enforcing Part 2 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). Under this legislation, all imported or exported currency and/or monetary instruments valued at more than C$10,000 must be reported to the CBSA. During 2006–07, the CBSA participated in more than 2,000 seizures under the Act, totalling over $42 million. Approximately $6 million of this total was forfeited to the Crown. | |||||||||
| 7. CRA | (a) AML/ATF Regime | $11,000 | $2,200 | $2,174 | FINTRAC discloses information to CRA when it suspects that the information would be relevant to an investigation and/or prosecution of money laundering or terrorist financing activities offences and if it determines that the information is relevant to a tax or duty evasion offence. The information received may serve as a lead for CRA to possibly initiate a new investigation or as additional information in an ongoing investigation. |
CRA Special Enforcement Audits initiated based on FINTRAC disclosures provided by the police agencies to the CRA and Audits / Joint proceeds of crime/money laundering investigations with the integrated proceeds of crime units 2006–07 Actual FINTRAC-related audits completed: 42 cases 2006–07 referrals from RCMP/police agencies: 98 cases Total cases completed: 140 Actual revenue reassessed—FINTRAC-related: $ 9,162,492 Actual revenue reassessed—Referrals from RCMP/police agencies: $24,063,677 Total revenue reassessed: $33,226,169 Federal tax assessed on completed FINTRAC-related audits: $3,325,453 Federal tax assessed on referrals from RCMP/police agencies: $8,074,293 Total federal tax assessed: $11,399,746 |
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| 8. RCMP | (a) AML/ATF Regime | $46,700 |
$4,900
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$12,312[6] | The RCMP, through its money laundering units, is the major recipient of disclosures from FINTRAC. When intelligence is received, an investigative assessment is conducted to determine if a criminal investigation is warranted. The intelligence may add information on existing targets or provide new leads to existing investigations. The RCMP also provides voluntary information to FINTRAC to support its intelligence gathering process. |
The money laundering units continue to receive intelligence from a number of sources, which include FINTRAC money-laundering disclosures, CBSA cross-border currency reporting information, as well as numerous other sources. The units also provide initiative training and awareness support via their money laundering training and outreach programs. In 2006–07, the intelligence received contributed to ongoing investigations, prompted the commencement of new investigations, and provided information for potential future use. This has contributed to Integrated Proceeds of Crime (IPOC) opening new cases valued at approximately $21.6 million and the conclusion of cases valued at approximately $16.5 million. The Anti Terrorist Financing Team (ATFT) continues to receive intelligence from a number of domestic partners, including FINTRAC, CBSA, CRA, financial institutions, and intelligence agencies, as well as foreign law enforcement agencies. ATFT provides training on detecting terrorism financing to National Security investigators and partners with RCMP money laundering units to access and meet training requirements. ATFT also participates in Financial Action Task Force mutual evaluations and plenaries in the furtherance of this group's initiatives. As a result of new funding, ATFT created financial investigator positions in the integrated national security enforcement teams located across the country to use the intelligence received in the furtherance of terrorism financing investigations and disrupting the funding process. |
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Total $349,669 |
Total $34,400 |
Total $44,287 |
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16. Comments on Variances: In the 2006–07 fiscal year, Budget 2006 announced new funding for the Horizontal Initiative. While the new resources were not received until late 2006, these new resources account for the variance between the forecast spending and actual spending during the fiscal year. CRA: The variance represents approximately 2% of the total amount awarded ($55,000) and is due to a reduced usage of FTEs (mostly due to some turnover). The expected results were, however, achievement. RCMP: New resources were received in November 2006; however, staffing of most of the new positions was not achieved until the end of the fiscal year and the beginning of the new fiscal year. |
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| 17. Results Achieved by Non-federal Partners: N/A | |||||||||||||||
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18. Contact Information: Lynn Hemmings |
19. Approved by: Diane Lafleur 613-992-5885 |
20. Date Approved: September 2007 |
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[1]. This initiative was formerly known as the National Initiative to Combat Money Laundering (NICML).
[2]. In the 2006–07 fiscal year, Budget 2006 announced new funding for the Horizontal Initiative. As a result, the total federal funding for the program from start to end date is $445.316 million.
[3]. In the 2006–07 fiscal year, FINTRAC received additional funding, as identified in Budget 2006, of $16.2 million. The majority of these funds were to address existing and ongoing operating pressures while the remaining funds were to implement new programs due to Bill C-25. However, $8 million will be re-profiled for the 2007–08 fiscal year and for 2008–09.
[4]. In the 2006–07 fiscal year, the Department of Justice Canada received additional funding, as identified in Budget 2006, of $1.104 million to bolster prosecutions capacity. Going forward, funding received by the Department of Justice Canada will be reported under the Department of Justice Canada and Public Prosecutions Services of Canada.
[5]. In the 2006–07 fiscal year, CBSA received additional funding, as identified in Budget 2006, of $3.291 million to address existing operational pressures; the spending variance is mainly attributable to staffing delays.
[6]. In the 2006–07 fiscal year, the RCMP received additional funding, as set out in Budget 2006, of $10.749 million to bolster existing investigative capacity. Actual spending in 2006–07 amounts to $7.805 million for the money laundering activities and $4.507 million for the terrorist financing activities.