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

Toronto - Canada has implemented a robust anti-money laundering and terrorist financing (AML/ATF) regime to combat the growing threats of money laundering and terrorist financing.

At the heart of the regime is an information sharing regime that enables FINTRAC to analyze financial transactions. The centre analyzes the data and disseminates the results to partners under prescribed conditions respecting individuals’ privacy. This intelligence supports domestic and international investigations, prosecutions, and educates the public on money laundering and terrorist financing issues.

Regime Coordination

The regime is governed by various inter-departmental committees comprising senior officials from each organization. These committees work together to maintain an efficient regime, focusing on both policy and operations. The Advisory Committee on Money Laundering and Terrorist Financing (ACMLTF) provides a platform for discussion and feedback on emerging issues and overall AML/ATF policy.

International Cooperation

International cooperation is a key component of the regime. FINTRAC exchanges information with other financial intelligence units, while Justice Canada leads formal mutual legal assistance. Canada plays a leadership role in various international organizations, including the Financial Action Task Force (FATF), to promote AML/ATF standards and capacity building globally.

Prevention and Detection

The second pillar of the regime focuses on preventing individuals from placing illicit proceeds or terrorist-related funds into the financial system. Reporting entities, such as banks and financial institutions, implement prevention and detection measures under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). FINTRAC conducts AML/ATF assessments of federally regulated financial institutions to promote compliance with the PCMLTFA.

Beneficial Ownership Transparency

Greater transparency of corporations and trusts contributes to preventing and detecting money laundering and terrorist financing. Requirements for beneficial ownership registration are in place, and recent legislative changes will soon require publicly accessible registries.

FINTRAC’s Role

FINTRAC is Canada’s financial intelligence unit, providing independent analysis and disclosure of financial intelligence to partners. In 2019-20, the centre made over 2,000 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 focuses on disrupting money laundering and terrorist financing activities. Regime partners, supported by FINTRAC’s intelligence, undertake financial investigations and prosecutions, while CRA investigates tax evasion and charitable organizations suspected of money laundering.

Conclusion

Canada’s AML/ATF regime is a comprehensive approach to combating money laundering and terrorist financing. Through ongoing monitoring of transactions, enhanced customer due diligence measures, and international cooperation, the regime aims to prevent, detect, and disrupt these illicit activities while promoting transparency and public awareness.