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Canada’s Anti-Money Laundering and Terrorist Financing Regime: A Comprehensive Approach

In a continued effort to combat money laundering and terrorist financing, Canada’s government has implemented a robust anti-money laundering and terrorist financing (AML/ATF) regime. Through ongoing monitoring of transactions and enhanced customer due diligence measures, the regime ensures that financial institutions and other reporting entities are equipped to detect and prevent illicit activities.

Under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA), financial intelligence unit Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) analyzes information submitted by reporting entities and disseminates it to regime partners. This intelligence is used to support domestic and international investigations, as well as educate the public on money laundering and terrorist financing issues.

Regime-Wide Coordination

To ensure effective coordination, federal partners share responsibility for the outcomes of the regime, governed by inter-departmental committees with senior officials from each organization participating. Regular collaboration between the public and private sectors also takes place through the Advisory Committee on Money Laundering and Terrorist Financing (ACMLTF), which fosters communication and results.

International Cooperation

Canada’s AML/ATF regime recognizes that many money laundering and terrorist financing cases have international dimensions, requiring strong cooperation with foreign partners. FINTRAC exchanges information with other financial intelligence units, while Justice Canada leads formal mutual legal assistance efforts.

Capacity Building

To increase capacity globally, Canada plays a leading role in the Financial Action Task Force (FATF), the G-7, the G-20, and the Egmont Group of Financial Intelligence Units. The country provides expertise and funding to support AML/ATF initiatives in countries with weaker regimes.

Prevention and Detection

The second pillar of Canada’s AML/ATF regime focuses on preventing individuals from placing illicit proceeds or terrorist-related funds into the financial system, while detecting such activities through strong measures implemented by reporting entities and regulators. Transparency requirements for corporations and trusts also contribute to prevention and detection.

FINTRAC Intelligence Disclosures

In 2019-20, FINTRAC made 2,057 disclosures to regime partners, including cases related to money laundering, terrorist activity financing, and other threats to national security.

Disruption

The final pillar of the regime involves disrupting money laundering and terrorist financing activities through financial investigations led by partners such as CSIS, CBSA, and the RCMP. FINTRAC’s intelligence disclosures and analysis activities support these efforts, while CRA plays a key role in investigating tax evasion and detecting charities involved in illicit activities.

Conclusion

Canada’s comprehensive AML/ATF regime demonstrates its commitment to protecting the integrity of the financial system and preventing money laundering and terrorist financing from undermining national security and stability.