Financial Crime World

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

In a bid to combat the growing threats of money laundering and terrorist financing, Canada has implemented a robust anti-money laundering and terrorist financing (AML/ATF) regime. This comprehensive approach is designed to prevent, detect, and disrupt these illegal activities while promoting international cooperation and information sharing.

Prevention and Detection

The AML/ATF regime requires prescribed financial institutions and certain non-financial businesses and professions to:

  • Identify their clients
  • Keep records
  • Establish and administer an internal AML/ATF compliance program

This includes identifying money laundering and terrorist financing risks and putting in place measures to mitigate those risks. Reporting entities are at the center of the regime’s prevention and detection approach, with regulators such as FINTRAC and OSFI supervising these entities to ensure compliance with AML/ATF regulations.

Greater transparency of corporations and trusts also contributes to preventing and detecting money laundering and terrorist financing. Recent legislative changes have introduced requirements for financial institutions to identify the beneficial owners of corporations and trusts.

Disruption

The final pillar of Canada’s AML/ATF regime focuses on disrupting money laundering and terrorist financing activities. Regime partners, including CSIS, CBSA, and the RCMP, supported by FINTRAC’s intelligence disclosures and analysis activities, undertake financial investigations in relation to these crimes.

FINTRAC is also responsible for analyzing suspicious transactions and disseminating information to regime partners to support their investigations. In 2019-20, FINTRAC made over 2,000 disclosures to partners, with the majority related to money laundering.

International Cooperation

Canada recognizes that protecting the integrity of the international financial system from money laundering and terrorist financing requires strong international cooperation. The country plays a leading role in various international organizations, including:

  • Financial Action Task Force (FATF)
  • G-7
  • G-20
  • Egmont Group of Financial Intelligence Units

Through these organizations, Canada works to:

  • Develop and implement international AML/ATF standards
  • Monitor their effective implementation
  • Identify emerging money laundering and terrorist financing trends and methods
  • Provide expertise and funding to increase AML/ATF capacity in countries with weaker regimes

Conclusion

Canada’s AML/ATF regime is a comprehensive approach that combines prevention, detection, and disruption measures to combat money laundering and terrorist financing. The regime is supported by strong international cooperation and a commitment to protecting the integrity of the financial system.

By working together, Canada can effectively prevent and disrupt these illegal activities while promoting economic stability and security.