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Section II – Analysis of Program Activities by Strategic Outcome
Strategic Outcome
Financial intelligence that contributes to the detection and deterrence of money laundering and terrorist activity financing in Canada and abroad.
Program Activity by Strategic Outcome
| 2009-10 Financial Resources ($ Millions) |
2009-10 Human Resources (FTEs) |
||||
|---|---|---|---|---|---|
| Planned Spending |
Total Authorities |
Actual Spending |
Planned | Actual | Difference |
| 42.7 | 45.6 | 42.4 | 266 | 258 | (8) |
| Expected Results |
Performance Indicators |
Performance Status |
Performance Summary |
|---|---|---|---|
| Law enforcement, intelligence agencies and prosecutors received timely and relevant tactical and strategic financial intelligence useful for further actions in investigations and other actions. | Satisfaction expressed by law enforcement and partners with the usefulness of case disclosures and strategic information products. | Met All |
In 2009-10, FINTRAC disclosed a record 579 cases of suspected money-laundering, terrorist financing and threats to the security of Canada to law enforcement and security partners. This was achieved with increasingly positive feedback from law enforcement and security partners on the usefulness, relevance and timeliness of case disclosures. Annually, FINTRAC has been seeing a gradual and steady increase in the positive feedback received from its law enforcement and security partners. This feedback confirms that FINTRAC has been responding effectively to partners' needs, with particular regard to disclosure timeliness and formatting. |
| Reporting entities are in compliance with the PCMLTFA and related regulations. | Level of compliance by reporting entities with PCMLTFA and related regulations. | Met All |
As part of FINTRAC's strategy to place a greater emphasis on compliance enforcement interventions and provide more targeted and focused outreach activities, the Centre increased the coverage rate of its compliance assessments by introducing desk assessments in tandem with onsite examinations of reporting entities' level of compliance with FINTRAC obligations. As a result, the Centre completed 691 examinations at fiscal year end that marked an increase by 52% over the previous year, of which 327 (47%) were onsite examinations and 364 (53%) were desk examinations. Outreach activities with reporting entities continued with a particular focus on providing guidance to targeted sectors and promoting additional self-service tools on the FINTRAC website. During the fiscal year, FINTRAC conducted 141 outreach presentations reaching more than 3,400 participants providing feedback to targeted sectors and associations, particularly those recently brought into the Regime. The Centre also responded to over 5,000 calls from reporting entities and received more than 547,000 visits to its website. |
Performance Analysis - Collection, Analysis, and Dissemination of Financial Information
Within FINTRAC's program activity - Collection, Analysis, and Dissemination of Financial Information, the Centre undertakes activities related to the collection of financial information and the production and dissemination of strategic financial intelligence and case disclosures as well as activities to ensure compliance by reporting entities with their obligations under Part 1 of the PCMLTFA. These activities are complemented by research and government relationships activities, both domestic and international.
Law enforcement, intelligence agencies and prosecutors received timely and relevant tactical and strategic financial intelligence useful for further actions in investigations and other actions.
In 2009-10, FINTRAC increased its production of case disclosures of financial information. During the period, the Centre made 579 case disclosures, of which 470 were associated with money laundering, 73 with terrorist financing and other threats to the security of Canada, and 36 with associations to both money laundering and terrorist financing. The number of case disclosures is a slight increase compared to 556 cases disclosed in 2008-09 and a continued significant increase over the 210 cases disclosed in 2007-08.
The value of FINTRAC's disclosures in the fight against money laundering and terrorist activity financing is widely recognized. For example, during the fiscal year, the number of voluntary information records (VIRs) FINTRAC received from law enforcement and intelligence partners have increased by over 35%. VIRs are used by the Centre's investigative partners to signal priority investigations where financial intelligence could make an important contribution. In 2009-10 FINTRAC received 855 VIRs, and based upon the increasing acceptance and use of FINTRAC's intelligence, it is expected that the number of VIRs received will continue to rise in the future.
Feedback from law enforcement and intelligence agencies regarding the effectiveness and usability of FINTRAC's disclosure product have consistently shown that reducing the time it takes to receive a FINTRAC disclosure following a VIR is a primary concern of the Centre's investigative partners. The importance of timely intelligence dissemination, particularly with FINTRAC's partners in the law enforcement and intelligence communities is paramount. In matters of national security, it can relate directly to preserving public safety while in other instances, timeliness can ensure the integrity of a successful investigation.
During the year, the Centre continued to make improvements to its analytical processes and realigned internal processes and operating structure to better understand and respond to the needs of investigative and intelligence partners. These enhancements have allowed FINTRAC analysts to focus on the cases of highest importance as well as improve the timeliness of case disclosures. In 2009-10, the average time to complete the analysis of a case improved by 17% decreasing from 82 days to 68 days. In addition, FINTRAC continued to improve its detection and selection of proactive cases where no known current investigations may be occurring.
FINTRAC achieved these results while receiving increasingly positive feedback from law enforcement and security partners on the usefulness, relevance and timeliness of case disclosures. Based on the feedback solicited from partners from the first quarter of the 2008-2009 fiscal year to present, the Centre has noted the following trends:
- Significant numbers of FINTRAC's financial disclosures continue to provide a major contribution to investigations;
- The percentage of disclosures that triggered a new investigation has doubled;
- Disclosures providing leads related to unknown persons / entities have increased;
- Disclosures providing grounds for warrant / production order have tripled; and
- Disclosures providing limited to no value have decreased.
The Centre also continued to fulfill the needs of various partners and stakeholders in producing and disseminating a wide range of strategic financial intelligence assessments, briefs and reports. These products served to inform government policy and decision makers, as well as reporting entities about money laundering and terrorist financing issues, methods, indicators and case studies which enabled them to better combat money laundering and terrorist financing.
A key achievement in 2009-10, was the publication of FINTRAC's study on money laundering trends and typologies in Canadian Casinos. This work built on the positive feedback the Centre received from the banking reporting sector and other stakeholders in relation to the publication of Money Laundering and Terrorist Financing Typologies and Trends in Canadian banking in 2008-09. A similar report for the money services businesses (MSB) sector is currently being drafted and should be published in 2010-11.
Reporting entities are in compliance with the PCMLTFA and related regulations.
Deterring money laundering and terrorist financing by working with reporting entities and other key stakeholders helps to ensure the integrity of the financial system and contributes to the public safety of Canadians. FINTRAC's target is to achieve a high level of reporting entity compliance with PCMLTFA obligations.
In 2009-10, FINTRAC embarked on a new strategy for its compliance activities by placing increased emphasis on compliance enforcement interventions and providing more targeted and focused outreach activities. In addition, FINTRAC increased the coverage rate of its compliance assessments by introducing desk assessments in tandem with onsite examinations of reporting entities' level of compliance with FINTRAC obligations. As a result, the Centre completed 691 examinations at fiscal year end that marked an increase by 52% over the previous year, of which 327 (47%) were onsite examinations and 364 (53%) were desk examinations.
Outreach activities with reporting entities continued with a particular focus on providing guidance to targeted sectors and promoting additional self-service tools on the FINTRAC website. During the fiscal year, FINTRAC conducted 141 outreach presentations reaching more than 3,400 participants providing feedback to targeted sectors and associations, particularly those recently brought into the Regime. The Centre also responded to over 5,000 calls from reporting entities and received more than 547,000 visits to its website.
In addition, FINTRAC organized its first workshop for representatives from reporting entities in the financial services sectors, attracting 140 participants representing the banking, credit union/caisse populaire, securities, life insurance, and MSB sectors, along with law enforcement and government representatives. The primary aim of the workshop was to demonstrate FINTRAC's role as part of a larger continuum of anti-money laundering/anti-terrorist financing efforts that begins with reporting entities, and includes FINTRAC, law enforcement and prosecutors. Working together, panelists from FINTRAC, the RCMP and the Ministry of the Attorney General of Ontario led an end-to-end analysis of a high-profile money laundering case. Other highlights of the one and a half day workshop included a reporting entity panel, where representatives of the different sectors discussed challenges and best practices, and break-out sessions on particular topics of interest, including the vulnerabilities to money laundering of digital precious metals.
In 2009-10, FINTRAC completed the successful implementation of the Administrative Monetary Penalties (AMP) regime. FINTRAC is now authorized to impose administrative penalties where reporting entities are found to be non-compliant with the requirements of the PCMLTFA. This additional tool represents a measured response to particular instances of non-compliance and is designed to encourage these reporting entities to correct their behavior. In its first year, 7 AMPs have been issued, and all of these were publicly named on the FINTRAC website.
2009-10 was also the first full year of operation for the money services businesses (MSB) registry. The MSB registry was launched on June 23, 2008, allowing the general public to search for publicly available information about registered MSBs. In this fiscal year, an additional 223 MSBs registered with FINTRAC bringing the total entities registered to 954.
Lessons Learned
Safeguarding personal Information
Financial intelligence units (FIUs) have access to sensitive financial information and are subject to legislation that protects its confidentiality. The PCMLTFA includes numerous safeguards to ensure that FINTRAC protects the personal and other sensitive information under its control, including the requirement that the Office of the Privacy Commissioner of Canada (OPC) undertake a bi-annual review of the measures that FINTRAC has taken to protect the information it receives or collects.
In November of 2009, the OPC tabled its first report on FINTRAC's measures to protect the information under its control. The report recognized the Centre's good work in protecting its information holdings as well as the Centre's strong physical and IT security infrastructures. It also made a number of recommendations to further strengthen FINTRAC's privacy protection measures. FINTRAC welcomes these recommendations and has undertaken a number of initiatives to better align its processes and systems with the proposals put forth by the Privacy Commissioner.
In addition, FINTRAC has taken steps to strengthen its privacy management structure, and a member of its Executive Committee has been appointed Chief Privacy Officer. The Chief Privacy Officer's role is to provide strategic privacy leadership, and to coordinate and oversee privacy related activities for the Centre.
Performance Measurement
FINTRAC has a strong performance measurement regime for tracking and reporting on the Centre's outputs and activities. In the 2009-10 Management Accountability Framework (MAF) assessment, FINTRAC was assessed by the Treasury Board Secretariat (TBS) in 11 of 19 areas of management and received generally positive results. TBS acknowledged FINTRAC's overall consistent ratings since the last assessment in 2006-2007, and recognized FINTRAC for maintaining a strong rating in the area of Information Management and Technology. However, the Centre's performance measurement framework was identified as an "opportunity for improvement" and TBS made a number of suggestions to assist FINTRAC in the development of a more robust performance framework, including performance measures related to the Centre's outcomes.
To address this performance measurement challenge, the Centre is currently engaging in a review of its expected results, outcomes and performance measurement framework, with a plan to move towards implementation of a set of key core performance indicators within this framework beginning in the 2010-11 fiscal year. An important component of the Centre's efforts will be a results mapping exercise, using a logic model approach, which will be identifying additional proposed outputs and expected results at a greater level of detail than previously possible. The Centre will also be working more closely with investigative partners to establish more systemic feedback mechanisms to populate the key indicators around FINTRAC's outcomes. These efforts should permit FINTRAC to fully satisfy its internal and external planning, reporting and accountability obligations for all future planning periods.
| 2009-10 Financial Resources ($ Millions) |
2009-10 Human Resources (FTEs) |
||||
|---|---|---|---|---|---|
| Planned Spending |
Total Authorities |
Actual Spending |
Planned | Actual | Difference |
| 7.5 | 8.1 | 7.5 | 47 | 45 | (2) |
Performance Analysis - Internal Services
Promoting excellence in FINTRAC's workforce and strengthening the management and human resource framework is a priority of the Centre. During 2009-10, FINTRAC had a number of key achievements within the program activity of internal services.
Human Resources
FINTRAC attaches great importance to providing a healthy, stimulating work environment. During the 2009-10 fiscal year, the Centre invested in a number of recruitment initiatives to increase its presence in the labour market, assess current workforce engagement, and to facilitate employee development. A series of employee surveys and focus groups were conducted to identify and address employee concerns. FINTRAC implemented an Individual Learning Plan program to maintain and update employee expertise. The Centre also was proud to introduce its Awards and Recognition program to recognize and acknowledge the valuable contributions to FINTRAC by its individual employees and teams.
Security Awareness
In support of FINTRAC's security policy and its mandate to ensure the continued protection of personal information, an enterprise wide Security Awareness program was launched to train all FINTRAC employees on their responsibilities in protecting the personal and other sensitive information entrusted to the Centre. Security Awareness sessions were delivered to all employees in multiple small forums and was available in both official languages.
Establish, Review and Update Policies
FINTRAC Corporate policies were reviewed and updated in order to align with Treasury Board and other central agencies policies. Policy development included the establishment of a policy on Mobile Communications Devices and an update to the Procurement Policy. A review and update to the Security Policy is underway and FINTRAC is implementing an Asset Management Framework and a Costing Framework.
IM\IT Governance
Integrated with FINTRAC's annual strategic planning process, and supported by the Centre's investment strategy, the IM/IT strategic plan and a 15-month IM/IT plan were established to ensure that FINTRAC develops architecturally sound, cost-effective and quality solutions that meet the priorities established and agreed to by all senior executives. Monthly reviews of project status dashboards at the executive level ensured that FINTRAC met its IM/IT development project commitments by addressing risk factors and resource issues in a proactive manner.
Internal Controls
In 2009-10, FINTRAC established a Contract Review Committee to ensure sound risk management is applied to potential FINTRAC contracts in order to protect the interests of FINTRAC and of the Government of Canada.
Further to the 2008-09 review by an external consultant on FINTRAC's financial controls, 2009-10 also saw the implementation of recommendations to strengthen internal controls.
Benefits for Canadians
FINTRAC is an essential component of the community of organizations that combat organized crime and terrorism under Canada's Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime. The Centre's role is to facilitate the detection and deterrence of money laundering and terrorist activity financing in Canada and abroad by analyzing reported transactions and other information, and making case disclosures of financial intelligence to the appropriate law enforcement agency, security and intelligence agency, or foreign financial intelligence unit, when there are reasonable grounds for suspicion of relevance to the investigation or prosecution of money laundering or terrorist activity financing offences.
By ensuring the compliance of financial institutions and other reporting entities with their obligations under the PCMLTFA, the Centre helps to create a formidable deterrent to those who would use legitimate financial channels to launder money or to finance terrorism. In Canada, banks and other financial services businesses maintain internal compliance regimes that ensure that the trail of financial transactions can be followed, and that law enforcement agencies can effectively pursue cases of suspected money laundering and terrorist activity financing, thereby strengthening Canada's capacity to detect and deter money laundering and terrorist financing.
Money laundering and terrorist activity financing are transnational in nature, necessitating the participation of all countries for their successful detection and deterrence. FINTRAC's work with international bodies such as the Financial Action Task Force and the Egmont Group contributes to the development of international AML/ATF policies and standards, and the promotion of operational cooperation among financial intelligence units. The operational links the Centre has forged with other FIUs throughout the world are a vital part of FINTRAC's contribution to the domestic and international fight against terrorism, money laundering and organized crime.
