Financial Crime World

Canada Cracks Down on White-Collar Crime and Finance: New Legislation and Regulations Amid Surge in Fraud and Money Laundering

Canada’s Challenges with White-Collar Crime and Money Laundering

The COVID-19 pandemic has accelerated the digital transformation in Canada, leading to a surge in e-commerce and an increased reliance on technology across all sectors. However, this shift has also brought new challenges for Canadian authorities, particularly in the areas of white-collar crime and money laundering.

  • Transparency International’s Corruption Perception Index ranked Canada at an all-time low.
  • The Criminal Intelligence Service estimated that between CA$45 billion and CA$113 billion is laundered through Canada each year.

Combatting Data Breaches and Cybercrime

The pandemic’s shift to remote work and online learning has emphasized the need for robust cybersecurity and relevant legislation. With a significant increase in data breaches, Canadian governments have taken measures to strengthen their cybersecurity defenses.

Federal Responses

  • Canadian Shield initiative: A free Domain Name System that filters internet connections against known cyber threats (April 2020).
  • Digital Charter Implementation Act, Bill C-11: Introduced in November 2020, the bill proposes a Consumer Privacy Protection Act (CPPA), bringing tougher financial penalties for privacy violations to the G7 (if passed).

Provincial Responses

  • Quebec: Bill 64 (September 2021): Organizations are now required to notify the regulator of data breaches presenting a ‘risk of serious injury.’
  • British Columbia: PIPA review committee (34 recommendations for amendments).

Cracking Down on Crypto-Businesses and Fraud

Regulatory scrutiny and significant enforcement steps led to substantial progress in regulating crypto-asset businesses in Canada during 2021. Canadian securities regulators have adopted a registration regime for crypto assets trading platforms (CTPs) offering custodial services, while enforcing regulations on both domestic and foreign players.

New Regulations for CTPs

  • New dealer registration requirements for CTPs dealing with Security Tokens and Crypto Contracts.
  • Enhanced enforcement steps against foreign CTPs operating in Canada.

Combating Money Laundering

Canada’s money laundering laws, primarily the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its enforcing body, FINTRAC, have imposed obligations on financial institutions and other businesses.

New Regulations for Virtual Currency and Money Laundering

  • New virtual currency transaction record keeping and reporting obligations.
  • Updates to the large cash and virtual currency transactions reporting requirements.

Co-ordinating Anti-Money Laundering Efforts

The Financial Crimes Co-ordination Centre (FC3) plays a pivotal role in enforcing and co-ordinating investigative and prosecutorial support in anti-money laundering efforts. In late 2021, the FC3 held a large-scale conference of anti-money laundering professionals to discuss current trends and sophisticated money laundering tactics.