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Table 3: Horizontal Initiatives


Name of Horizontal Initiative: Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime—formerly the National Initiative to Combat Money Laundering

Name of Lead Department(s): Department of Finance Canada

Lead Department Program Activity: Economic and Fiscal Policy Framework

Start Date of the Horizontal Initiative: June 2000

End Date of the Horizontal Initiative: 2009–10

Total Federal Funding Allocation (start to end date): $429,006

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).

The NICML was expanded and is now known as Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime. In December 2006, Bill C-25 amended the PCMLTFA to ensure Canada's legislation remains consistent with international anti-money laundering and anti-terrorist financing standards as set out by the Financial Action Task Force (FATF) and is responsive to areas of domestic risk. Amendments include enhanced client identification requirements, the creation of a registration regime for money services businesses, and the establishment of an administrative and monetary penalties regime to deal with lesser infractions of the Act.

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.

Governance Structure(s): Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime is a horizontal initiative involving both funded and non-funded partners. The funded partners include the Department of Finance Canada, the Department of Justice Canada, the Public Prosecution Service of Canada, FINTRAC, the Canada Border Services Agency (CBSA), the Canada Revenue Agency (CRA), and the Royal Canadian Mounted Police (RCMP); non-funded partners include Public Safety Canada (PS), the Office of the Superintendent of Financial Institutions (OSFI), Foreign Affairs and International Trade Canada, and the Canadian Security Intelligence Service (CSIS). An interdepartmental ADM-level group and a working group, consisting of all partners and led by the Department of Finance Canada, have been established to direct and coordinate the government's efforts to combat money laundering and terrorist financing activities.


($ thousands)
Federal Partners Federal Partner Program Activity (PA) Names of Programs for Federal Partners Total Allocation (from Start to End Date) Planned Spending for
2008-09
Actual Spending for
2008-09
Expected Results for
2008-09
Results Achieved in
2008-09
Department of Finance Canada Financial Sector Policy Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime 3,000 300 316

Consultations with public- and private-sector stakeholders to refine regulatory proposals;

Published regulations pursuant to the amended PCMLTFA; and Effective oversight of Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime.

Consultations with public- and private-sector stakeholders are ongoing. A public-private sector advisory committee was established to facilitate discussions among private and public sector members of the Regime.
Consultations were also held with the real estate and credit union centrals sectors regarding regulatory amendments.

One set of regulatory amendments to the PCMLTFA, which applied to real estate brokers and agents, were published in 2008–09. The amendments address some of the industry's concerns and clarify some of the provisions that came into force in June 2008.

The Department of Finance Canada continues to lead the Regime and make available avenues to address policy and operational issues to ensure Canada has an effective Anti-Money Laundering and Anti-Terrorist Financing Regime.

Department of Justice Canada The National Initiative to Combat Money Laundering

Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime

9,300 100 100 The Criminal Division of the Department of Justice Canada plays a significant role in the Regime. For 2008–09, it is anticipated that the Criminal Division will use the resources it receives to carry out work related to the FATF, including attending FATF-related international meetings, which will total five over the relevant period. Attendance at the meetings is of particular importance during 2008, because Canada's Anti-Money Laundering and Anti‑Terrorist Financing Regime is being evaluated this year against the FATF's 40 + 9 recommendations and the presence of the Division is necessary to ensure proper discussions of the Canadian evaluation report. In addition, the Criminal Division will be the relevant authority to respond to all legal issues that develop out of that evaluation. Resources will also be allocated to ensure the Criminal Division's continued involvement in policy development relating to money laundering and terrorist financing. Finally, the Human Rights Law Section will receive money to deal with any ancillary constitutional issues raised during prosecutions.

Expected results were achieved.

In addition, the Department of Justice Canada provided updates to the FATF with regard to the Canadian mutual evaluation.
Public Prosecution Service of Canada (PPSC) Addressing criminal issues to contribute to a safer world for Canada Canada's
Anti-Money Laundering and Anti-Terrorist Financing Regime
6,900 2,300 2,269 The Public Prosecution Service of Canada (PPSC) plays a significant role in the regime. For 2008–09, it is anticipated that information provided to law enforcement by FINTRAC will result in more prosecutorial legal advice being provided to law enforcement. It will also result in additional charges being laid for money laundering and terrorist financing offences and thus result in an increased workload for prosecutors. The PPSC also has responsibilities related to the PCMLTFA. The planned work includes applications for production orders, increases in border seizure and forfeiture work associated with suspected proceeds of crime, and prosecutions related to offences against the Act. In addition, resources will be used for training of law enforcement personnel and prosecutors and for the development and coordination of policy as it relates to money laundering and terrorist financing. Finally, PPSC resources will carry out work related to the FATF, including attending a FATF meeting. In 2008–09, the PPSC dealt with a number of files that contained a charge of money laundering or terrorist financing under the Criminal Code (CC)or a charge under the PCMLTFA. Specifically, the PPSC opened 45 new files that included 69 money laundering charges under the CC and 1 charge under the PCMLTFA. In addition, Crown counsel worked on 74 carry-over files that contained 246 charges of money laundering and 5 charges of terrorist financing under the CC and 7 charges under the PCMLTFA. The PPSC recorded pre-charge advice and legal support in almost a quarter (24 per cent) of these new and carry-over files. Over this time period, PPSC counsel provided formal as well as ad hoctraining to police over the course of their investigations. PPSC counsel also obtained 12 production orders under section 60 of the PCMLTFA.
Financial Transactions Reports Analysis Centre of Canada Collection, analysis, and dissemination of financial information Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime 266,591 38,595 40,256 Technology-driven financial intelligence analysis and case disclosures, which are widely used by law enforcement and intelligence agencies, and a program that fosters compliance by the reporting entities. Implementation of amendments contained in Bill C‑25

In 2008–09, FINTRAC had a large increase in the number of case disclosures of financial intelligence made to law enforcement agencies and national security agencies. This year, FINTRAC made 556 case disclosures, compared to 210 in 2007–08 and 193 in 2006–07. This increase is attributed to changes that have been made to the Centre's disclosure process, thus making it more efficient and responsive to the needs of recipient agencies. In addition, with the coming into force of Bill C-25's legislative changes, FINTRAC is able to provide a significantly expanded range of information, enabling the disclosures to have a greater effect.
Assistance and outreach to reporting entities continued, with a particular focus on providing guidance to sectors that have been newly brought under the Regime. FINTRAC conducted over 500 outreach meetings, reaching more than 20,000 individuals, and provided feedback to reporting entities and associations representing all sectors now within the scope of the PCMLTFA.

FINTRAC also conducted a greater number of examinations in all reporting entity sectors. In 2008–09, FINTRAC conducted over 450 such examinations, representing more than a 60-per-cent increase over the previous year. FINTRAC's non-compliance disclosures to law enforcement were also up significantly.

FINTRAC has completed the implementation of virtually all elements of the C-25 legislation. This includes the Money Services Business Registration system and the Administrative Monetary Penalties (AMP) regime.

Canada Border Services Agency (CBSA) Security Canada's
Anti-Money Laundering and Anti-Terrorist Financing Regime
43,539 5,865 5,670 The CBSA is responsible for administering Part 2 of the PCMLTFA, “Reporting of Currency and Monetary Instruments.” The Cross-Border Currency Reporting (CBCR) Program requires that travellers report the importation and exportation of currency and monetary instruments equal to or greater than $10,000. Part 2 also provides for the enforcement element of the CBCR Program, which includes conducting searches, questioning individuals, and seizing non-reported or falsely reported currency and suspected proceeds of crime. During 2008–09, the CBSA performed more than 2,000 seizures under the Act, totalling over $40 million. Approximately $8 million of this total was forfeited to the Crown, and penalties have been assessed in excess of $900 thousand. Over 170 seizures have resulted in forfeiture as suspected proceeds of crime or funds for the use of terrorist activities. Administratively, border services officers have collected over 32,644 cross-border currency reports.

Access

Canada's
Anti-Money Laundering and Anti-Terrorist Financing Regime
12,413 1,661

1,762

(see above) (see above)
Canada Revenue Agency (CRA) Reporting compliance Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime 8,800 2,200 2,200 The projected number of audits is 105, with a projected federal tax recovery of $8,956,905. Ninety-six audits were completed with a total tax recovery of $26.6 million. In this fiscal year, 10 to 12 audits, with an unusually high tax recovery, were completed. The tax recovery amounts are not the norm for these types of files and are the reason for exceeding the Department's projections. These files also require more time to complete, which explains the lower number of audits completed.
Royal Canadian Mounted Police (RCMP) Money Laundering Units Money Laundering Units Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime 57,103 7,978

6,481

Enhanced national and international opportunities for the detection and investigation of money laundering activities;

Development of FINTRAC disclosures, as well as other intelligence, to a point where resources from Integrated Proceeds of Crime Units or elsewhere in the RCMP could then be directed toward investigations that seek to increase seizures; and

Increased resource level in Canada's three major urban centres (Vancouver, Toronto, and Montréal) to help build up the investigative capacity in those centres to conduct investigations on leads related to Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime.

Ten major investigations opened in 2008 have an international component associated with them.

Many major investigations opened in 2008–09 are active files as they are complex in nature and often take years to conclude. Resources are focussed on the deterrence of money laundering by targeting major organized criminals and crime groups. One of these major files in 2008,initiated from a FINTRAC disclosure, is still under investigation and has over 21,000 person hours on it.

There have been 32 major investigations initiated, which have resulted in over $7.6 million seized.

RCMP, Anti–Terrorist Financing Team (ATFT) Special initiatives Canada's
Anti-Money Laundering and Anti-Terrorist Financing Regime
21,360 5,340 4,102 Through the gathering and analysis of financial intelligence, the ATFT will focus on converting that intelligence into proactive investigations, thus enhancing Canada's ability to detect and deter terrorist financing activities

The ATFT continues to provide support to seven project status investigations of terrorist financing across Canada and to a number of requests for information received from domestic and international agencies.

The ATFT, in conjunction with Canada Border Services Agency, CSIS, FINTRAC, and the RCMP's Proceeds of Crime, took part in a G8-sanctioned law enforcement effort targeting cash couriers at selected international airports. Canadian actions resulted in cash seizures of over $600,000.

ATFT units have restrained bank accounts and a building related to the Department's investigations into the World Tamil Movement in Toronto and Montréal and are in the legal process of having these assets forfeited to the Crown. In 2009, Monin Khawaja was convicted and sentenced to 10 1/2 years for providing material support to a terrorist group. An investigation in BC by the National Security Financial Investigation Unit has led to the laying of a charge of terrorist financing against a male subject related to the Liberation Tigers of Tamil Eelam. This matter is set for trial in May 2010.

The ATFT has provided a tactical package to CSIS to assist on a proposed criminal code listing and has provided assistance on the 2008–09 review of all criminal code listings as conducted by CSIS. 

The ATFT is formalizing relationships with the Canadian Bankers Association and the Office of Superintendent of Financial Investigations by means of memorandums of understanding to ensure continued cooperation. 

The ATFT continues to provide training to the RCMP and partner agencies. Financial investigative members from the various integrated national security enforcement teams and selected partner agency representatives from CSIS, CRA, and FINTRAC attended and presented at the Fall 2008 course. Currently, the ATFT is updating the Terrorist Financing Course to reflect changes requested and feedback from candidates from course attendees. The next course is slated for September 2009.

The ATFT continues to support FATF. Members of the team have attended Caribbean Financial Action Task Force and Asia/Pacific Group on Money Laundering plenary meetings as well as the FATF plenary.

The RCMP and CRA have completed the Department's joint-venture seminars on the use of the Charities Registration Security Information Act, which were begun in 2008 and delivered to field units in Ottawa, Halifax, Montréal, Vancouver, Edmonton, Calgary, and Toronto. 

The ATFT has been part of the working group. led by Industry Canada, on the revised Investment Canada Act and is now performing background checks on entities at the behest of Industry Canada.
Total 429,006 64,339 63,134    

Comments on Variances: FINTRAC: The planned spending amount did not include additional funding received and approved by the Treasury Board of Canada Secretariat over the 2008–09 fiscal year. Among the additional resources received are the Strategic Review Reinvestments, NICML re-profiled funds from 2007–08, Secretariat adjustments for Paylist Requirements (Vote 30), and Employee Benefits Plan year-end adjustments.

RCMP, Anti-Terrorist Financing Team: The shortfall in spending is due to the ongoing challenge of staffing all vacant positions and to a number of staff members being seconded to major national security files to assist on the terrorist financing portion of investigations (funded from the budget for national security).

RCMP, Anti-Money Laundering: The shortfall in spending is due largely to the procurement of ion scanners being delayed to the following fiscal year.

Results to be achieved by non-federal partners (if applicable): N/A

Contact information:

Rachel Grasham
Chief, Financial Crimes Section
Phone: 613-943-2883