Combatting Money Laundering
Date: May 4, 2020
Classification: Unclassified
Branch/Agency: IEB/CBSA
Proposed Response:
- Canada takes a comprehensive and coordinated approach to combatting money laundering, terrorist financing and organized crime.
- Trade-based money laundering is the process of disguising proceeds of crime and other illicit financial flows as legitimate trade transactions.
- It fuels global crime, terrorism and corruption. This deprives countries of revenues and undermines legitimate economic competition.
- Despite the pressure of responding to the COVID-19 pandemic, the CBSA continues to advance its other key initiatives, and on
April 1 2020, it officially launched its new Trade Fraud and Trade Based Money Laundering Centre of Expertise (the Centre). - The new Centre will strengthen the Agency’s ability to identify and investigate complex trade fraud, as well as refer cases to Canadian federal police.
- The CBSA assesses that, while other forms of money laundering, such as casinos are facing restrictions during this pandemic response, trade based money laundering will continue, which is why we kept our commitment to open the Center on time.
- This initiative will support whole-of-government efforts to enhance the safety and security of Canadians, and the protection of the integrity of Canada’s financial and trade systems.
Background:
Canada takes a comprehensive and coordinated approach to combatting money laundering, terrorist financing and organized crime. Money laundering is a threat to Canadians’ safety, security and quality of life, and harms the integrity and stability of the financial sector and the broader economy. There are growing concerns that illicit funds are finding their way into the Canadian economy through channels that millions of Canadians rely on, including via international trade.
Given the evolving threat environment, the Canadian Anti-Money Laundering / Anti-Terrorist Financing (AML/ATF) Regime is reviewed and strengthened regularly to ensure it is appropriately aligned with international standards and continues to effectively counter money laundering and terrorist financing. A gap that has been identified in the Regime is the limited investigation and prosecution of Trade-Based Money Laundering (TBML).
Budget 2019 announced $162M over five years and $19M ongoing to support a whole-of-government approach to strengthening the Government of Canada’s capacity within six federal organizations (Department of Finance, Public Safety and Emergency Preparedness, FINTRAC, Department of Justice, Statistics Canada, and CBSA) to better share and analyse financial intelligence, and undertake planning to design longer term initiatives for combatting these types of financial crimes.
Of the total funding announced in Budget 2019, $28M over five years and $10M ongoing has been earmarked for CBSA to create a Trade Fraud and TBML Centre of Expertise.
This initiative will bring together CBSA experts in both National Headquarters and regional offices across Canada. These officers will improve the Agency’s ability to identify, interdict, and investigate the customs trade fraud offences that allow TBML to occur.
The Centre will also generate increased intelligence and investigative referrals to the Public Safety Canada-led anti-money laundering Action, Coordination and Enforcement (ACE) Team and the Royal Canadian Mounted Police (RCMP) when TBML is suspected. This initiative is also expected to result in increased Agency referrals to other government departments, such as the Canada Revenue Agency, for related offences such as tax evasion.
It is expected that steps by the CBSA to enhance its capacity to respond to trade fraud and TBML will be welcomed by international and domestic security partners, multi-lateral and non-governmental organizations with a trade mandate, as well as private sector financial institutions and Canadian international trade chain stakeholders.
Contacts:
Prepared by: Caroline Vavro, Manager, Intelligence and Enforcement Branch, Tel. no. 613-957-0828
Approved by: Jacques Cloutier, Vice-President, Intelligence and Enforcement Branch, Tel. no. 613-948-4111
- Date modified: