Financial Crime World

Strengthening Efforts Against Money Laundering and Terrorist Financing

In a bid to combat financial crime, the Canadian government has taken a proactive approach by collaborating with the private sector to strengthen its efforts against money laundering and terrorist financing.

The Anti-Money Laundering and Terrorist Financing (ACMLTF) Regime

Led by the Department of Finance Canada and Scotiabank, the ACMLTF regime promotes awareness among reporting entities and improves compliance with regulations. The regime meets bi-monthly to discuss industry perspectives on legislation, regulation, guidance, and policy interpretations.

Collaboration for Effective Policies

“The private sector plays a crucial role in our efforts against financial crime,” said a senior official at the Department of Finance Canada. “Through the ACMLTF, we are able to leverage industry expertise and insights to refine our policies and regulations.”

Prevention and Detection

The regime’s second pillar focuses on preventing individuals from placing illicit proceeds into the financial system while detecting the placement and movement of such funds.

  • Reporting entities, including banks, casinos, and real estate companies, play a key role in implementing customer due diligence, recordkeeping, reporting, and other preventive measures.
  • FINTRAC, Canada’s anti-money laundering and terrorist financing regulator, has stepped up its outreach efforts to promote strong preventive measures.

Enhanced Compliance

FINTRAC provides guidance to businesses to help them better understand and comply with their obligations under the PCMLTFA. The agency’s Compliance Framework outlines the requirements for reporting entities to report suspicious transactions and maintain accurate records.

  • FINTRAC has finalized a new five-year Compliance Engagement Strategy, which sets priorities for its engagement activities.
  • The agency has increased its examination of larger businesses in higher-risk sectors and undertaken more complex, lengthy, and in-depth examinations.

Results

Despite these efforts, prosecution results have been limited, with only one federal conviction or guilty plea for a PCMLTFA offence between 2014 and 2020. However, FINTRAC has generated a substantial number of intelligence disclosures to its partners, contributing to a significant number of project-level investigations.

Conclusion

The ACMLTF regime’s proactive approach has facilitated compliance, detected non-compliance, and addressed financial crime risks in Canada’s financial system. By collaborating with the private sector, the government is able to develop more effective policies that balance administrative burden with anti-money laundering and terrorist financing goals.