PM Trudeau’s Government vs Financial Crime/Money Laundering: “Kid- Glove Treatment”

Further to this post,

Money Laundering, or, Canada Washes Whiter in the Great Shell Company Game (Note “Cartoon of the day” UPDATE)

here are extracts from another piece at the Globe and Mail by the relentless Rita Trichur:


Ottawa still giving financial criminals the kid-glove treatment

Rita Trichur

…The federal budget marked a return to the Liberals’ trademark incrementalism when it comes to combatting serious financial crime.

The government, for instance, plans to crack down on money laundering in the housing market by subjecting all mortgage lenders to federal scrutiny within the next year. But imposing new rules on alternative lenders isn’t enough if Ottawa isn’t prepared to do the same for lawyers who facilitate those real estate purchases – or other dubious transactions across the economy, for that matter.

Lawyers have been exempt from reporting suspicious transactions to the Financial Transactions and Reports Analysis Centre of Canada (FinTRAC) since a 2015 Supreme Court of Canada decision found Ottawa’s previous requirements for them didn’t align with the Charter of Rights and Freedoms. That ruling, however, left the door open for the government to revise its legislation, but it never did.

Now is the time to do so. The government’s own risk assessment on money laundering states that lawyers, knowingly or not, can provide cover to criminals in the housing market. In fact, this issue arose at the Cullen Commission of Inquiry into Money Laundering in British Columbia.

“Lawyers are the ‘black hole’ of real estate and of money movement generally. With no visibility by law enforcement on what enters and leaves a lawyer’s trust account, many investigations are stymied [emphasis added],” reads a B.C. government-commissioned report authored by Peter German, a lawyer and former RCMP deputy commissioner…

What’s more, it plans yet another comprehensive review of our anti-money-laundering and anti-terrorist-financing regime.

Oh goodie! More analysis paralysis on an issue that has already been studied to death [emphasis added].

Why not dust off the numerous reports already written on this issue over the years, including by the Financial Action Task Force and the Standing Committee on Finance?

This is the time for action, not more dilly-dallying. Start by empowering FinTRAC to ask follow-up questions about suspicious transaction reports filed by banks and other businesses [emphasis added].

Next, give banks a permanent “safe harbour” – a provision that shields them from legal liability if they participate in data-sharing partnerships to catch criminals. It’s ridiculous this type of information sharing still isn’t allowed…

And stop throwing relatively small amounts of money at giant problem. Specifically, the budget says Ottawa will provide FinTRAC with $89.9-million over five years, and $8.8-million a year continuously, to support its work. It is also earmarking $2-million for Public Safety Canada to establish a new Canada Financial Crimes Agency [see the April 9 post noted at the end of this one, note, note useless Mounties].

Those amounts are paltry considering that an estimated $45-billion to $113-billion is laundered here each year [emphasis added], according to a 2020 report by the Criminal Intelligence Service Canada [see p. 9 PDF here]

Ottawa shortened its deadline to create a publicly accessible corporate beneficial ownership registry, a tool to unmask crooks who hide behind anonymous shell companies. That database, which will store details about who ultimately owns and controls millions of private companies, is now expected to be accessible before the end of 2023, instead of 2025.

But don’t get too excited; there’s a catch. The registry will only cover companies that incorporate federally under the Canada Business Corporations Act [emphasis added]. That means companies incorporated in the provinces and territories won’t be immediately included in the federal database.

Equally troubling, the budget’s fine print suggests provinces and territories won’t be compelled to join the national registry. What’s the point if their participation isn’t mandatory?..

The Basel Institute on Governance, an independent non-profit that combats corruption and financial crime, recently called out Canada for its “ineffective beneficial ownership transparency measures.” The institute’s 2021 report, which assesses countries’ risk levels to money laundering, ranked Canada 77th out of 110 countries, with a score of 4.67 out of 10.

That’s great news for financial criminals and even sanctions-evading Russian oligarchs because Canada has no way to monitor the real-time creation of shell companies.

Ottawa must move expeditiously to broaden the scope of Canada’s anti-money-laundering and anti-terrorist-financing rules on a permanent basis…

All show, little go. Just. Not. Serious.That post:

They Almost Never Get Their Man, or, Get the Mounties out of Money-Laundering.

Mark Collins

Twitter: @Mark3ds

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