Financial Crime Cases in Canada: Stemming the Flow of Illicit Proceeds Fueling Toxic Drug Supply

Ottawa, Ontario - December 12, 2022 - The Canadian government is taking significant steps to combat financial crime and address the ongoing overdose crisis driven by a toxic illegal drug supply.

The Ongoing Crisis

Canada continues to grapple with an overdose crisis that has taken a devastating toll on individuals, families, and communities across the country. A recent report from the Financial Action Task Force (FATF), co-lead by Canada and the United States, highlights how organized crime groups use various methods to launder proceeds from the illegal drug trade and clandestine production.

Tactics Used for Money Laundering

• Bulk cash smuggling • Cash couriers • Trade-based money laundering • Virtual assets • Shell companies • Professional money launderers

Combating Illicit Proceeds

The report emphasizes the efforts of financial experts working together to understand and combat the flow of illicit proceeds fueling the toxic drug supply. Money laundering not only threatens the integrity and stability of the financial sector but also harms Canadians’ safety, security, and quality of life.

Government Efforts

To address this issue, Canada has made significant investments in strengthening its Anti-Money Laundering (AML) regime. Since 2019, the government has invested:

• $319.9 million • $48.8 million ongoing

to enhance data resources, financial intelligence, information sharing, and investigative capacity.

Initiatives Launched

• Financial Crime Coordination Centre (FC3): A five-year pilot program aimed at bolstering Canada’s response to complex financial crimes through stronger coordination across all levels of government. • Extension of AML/ATF Obligations: Payment service providers and crowdfunding platforms are now required to comply with AML/ATF obligations, as announced in Budget 2022. • Development of the Canadian Financial Crimes Agency (CFCA): The agency will become the lead federal enforcement entity responsible for investigating complex crimes.

Public Beneficial Ownership Registry

Canada is accelerating the implementation of a public and searchable beneficial ownership registry by two years, aiming to make it accessible before the end of 2023. This move aims to counter the misuse of anonymous companies for money laundering, tax evasion, and other financial crimes.

International Recognition

The FATF has recognized Canada’s efforts, affirming in October 2021 that Canada made substantial progress in improving compliance with international AML/ATF standards since its last evaluation in 2016. The country continues to work with its North American partners through joint action plans on opioids trafficking and health consequences of opioid use.

Conclusion

The government’s efforts demonstrate a commitment to tackling financial crime cases in Canada and addressing the root causes of the ongoing overdose crisis. By working together, we can stem the flow of illicit proceeds fueling toxic drug supply and ultimately save lives.