Archived - Report on Plans and Priorities 2013–14: Supplementary tables: page 3

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Name of horizontal initiative: Canada's Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime

Name of lead department(s): Department of Finance Canada

Lead department program: Economic and Fiscal Policy Framework

Start date of the Horizontal Initiative: June 2000

End date of the Horizontal Initiative: Ongoing

Total federal funding allocation (start to end date): $749.2 million

Description of the Horizontal Initiative (including funding agreement): Canada's AML/ATF Regime was formally established in 2000 as the National Initiative to Combat Money Laundering (NICML), as part of the federal government's ongoing effort to combat money laundering in Canada. Legislation adopted that year, the Proceeds of Crime (Money Laundering) Act, created a mandatory reporting system for suspicious financial transactions, large cross-border currency transfers, and certain prescribed transactions. The legislation also established the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to collect and analyze these financial transaction reports and to disclose pertinent information to law enforcement and intelligence agencies. In December 2001, the Proceeds of Crime (Money Laundering) Act was amended to include measures to fight terrorist financing activities, and was renamed the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).

The NICML was expanded and its name formally changed to “Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime.” In December 2006, Bill C-25 amended the PCMLTFA to further align Canada's legislation with the international anti-money laundering and anti-terrorist financing standards established by the Financial Action Task Force (FATF), and to respond to areas of domestic risk. The amendments included enhanced client identification requirements, the creation of a registration regime for money services businesses, and the establishment of an administrative monetary penalties regime to deal with lesser infractions of the PCMLTFA.

Shared outcome(s): To detect and deter money laundering and the financing of terrorist activities and to facilitate the investigation and prosecution of money laundering and terrorist financing offences.

Governance structure(s): Canada's AML/ATF Regime is a horizontal initiative comprising both funded and non-funded partners. The funded partners are the Department of Finance Canada, the Department of Justice Canada, the Public Prosecution Service of Canada (PPSC), FINTRAC, the Canada Border Services Agency (CBSA), the Canada Revenue Agency (CRA), the Canadian Security Intelligence Service, and the Royal Canadian Mounted Police (RCMP). The non-funded partners are Public Safety Canada, the Office of the Superintendent of Financial Institutions Canada, and the Department of Foreign Affairs and International Trade Canada. An interdepartmental Assistant Deputy Minister-level group and working group, consisting of all partners and led by the Department of Finance Canada, has been established to direct and coordinate the government's efforts to combat money laundering and terrorist financing activities. In addition, the Department also chairs a Public/Private Sector Advisory Committee. This broad-based advisory committee is composed of both public and private sector representatives who provide general guidance for Canada's AML/ATF Regime.

Planning highlights: The priorities for Canada's AML/ATF Regime partners will continue to focus on the following key objectives: detecting, deterring and preventing money laundering and terrorist financing and facilitating the investigation and prosecution of money laundering and terrorist financing offences. Each partner plays a key role in the Regime, and a coordinated effort is a priority.

Canada's Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime
$ millions

Federal
Partner
Federal
Partner
Program
Names of
Programs
Funded
Under
the
Horizontal
Initiative
Total
Allocation
(from Start
to End Date)
Planned
Spending
for 2013–14
Expect Results
2013–14
Department of Finance Canada Financial Sector Policy Policy Development and Oversight of AML/ATF Regime $3.9 $0.3 The Department of Finance Canada will continue its effective oversight of Canada's AML/ATF Regime. The Department will also focus on the following areas:
  • Participating in strategic domestic and international policy development activities that support the government's commitments to the Regime, including continuing work on potential policy changes outlined in the Department's December 2011 consultation paper entitled Strengthening Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime;
  • Assessing the findings of the five-year parliamentary review of the PCMLTFA;
  • Leading an interdepartmental working group to better assess Canada's money laundering and terrorist financing risks;
  • Heading the Canadian delegation to participate as an active member in the FATF and the Asia/Pacific Group on Money Laundering, as a Cooperative and Supporting Nation to the Caribbean Financial Action Task Force, and as an observer on the the “GAFISUD,” the Financial Action Task Force body of South America Against Money Laundering; and
  • Continuing participation in horizontal initiatives related to national security led by Public Safety Canada.
Department of Justice Canada Justice policies, laws and programs Criminal Law Policy Section (CLPS) and International Assistance Group (IAG) $7.4 $0.1 The IAG and the CLPS (which is part of the Justice Litigation Branch) play a significant role in the AML/ATF Regime. For 2013–14, it is anticipated that the IAG and the CLPS will use the resources they receive to carry out work related to the FATF, including attending FATF-related international meetings and providing advice on the FATF to Canadian Regime partners. These tasks may include support and attendance of the meetings of the subgroups of the FATF, for example, the Working Group on Evaluation and Implementation, and FATF-Style Regional Bodies, including the Caribbean Financial Action Task Force, the Asia-Pacific Group and the GAFISUD. Resources will also be allocated to ensure the CLPS's continued involvement in policy development relating to money laundering and terrorist financing. Finally, the Human Rights Law Section will continue to participate, as required, with respect to constitutional issues raised in relation to proposed amendments or in the course of prosecutions.
PPSC Drug, Criminal Code and terrorism prosecution program Drug, Criminal Code and terrorism prosecution program $14.8 $2.1 For 2013–14, the PPSC will continue to provide legal advice and support to the RCMP and other law enforcement agencies over the course of investigations related to the proceeds of crime, money laundering and terrorist financing provisions of the Criminal Code as well as the PCMLTFA, and to undertake prosecutions that arise out of those investigations. In addition, the PPSC will continue to provide Regime-related training to law enforcement personnel and prosecutors, and to support policy development and coordination. Finally, the PPSC will support the work of the FATF, as required.
FINTRAC Financial Intelligence Program Financial Intelligence Program $451.1 $23.8 FINTRAC's Financial Intelligence Program produces trusted and valued financial intelligence products, including tactical case disclosures on suspected money laundering, terrorist activity financing and other threats to the security of Canada, as well as strategic intelligence such as money laundering and terrorist financing trends reports, country and group-based financial intelligence assessments, and vulnerability assessments of emerging financial technologies or services. The program's products are relied on and sought after by Canadian law enforcement at the federal, provincial and municipal levels, by counterpart agencies and domestic and international intelligence bodies, and by policy and decision makers working to identify emerging issues and vulnerabilities in the AML/ATF Regime.

In 2013–14, FINTRAC will continue to provide its partners, policy makers and other interested parties with timely and relevant financial intelligence products that contribute to the public safety of Canadians, and support efforts to disrupt the ability of criminals and terrorist groups that seek to abuse Canada's financial system while reducing the profit incentive of crime.
Compliance Program Compliance Program $23.8 As part of Canada's AML/ATF Regime, FINTRAC seeks to counter money laundering and terrorist financing by improving the compliance behaviours of reporting entities with obligations under Part 1 of the PCMLTFA and the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations, which include obligations for reporting, record keeping, identity verification and other requirements.

In 2013–14, FINTRAC will continue to detect and address non-compliance with legislative obligations among reporting entities using a risk-based approach where compliance activity is undertaken in a manner that is commensurate with the risk of non-compliance. FINTRAC will also continue to support reporting entities and ensure that they receive timely and accurate responses to their inquiries.
RCMP Federal policing Money Laundering Units $94.2 $7.0 Strategically located in high-risk locations, RCMP Money Laundering investigators will continue to detect and deter money laundering activities. Investigators will continue to monitor and assess money laundering intelligence in order to develop proactive investigations. Partnerships with domestic working partners, international law enforcement and regulatory entities will continue to be developed and leveraged for a holistic enforcement and prevention approach.
Anti-Terrorist Financing Units Regime $42.6 $5.0 Through the gathering and analysis of financial intelligence, the Anti-Terrorist Financing team will focus on converting financial criminal intelligence into proactive investigations for the Anti-Terrorist Financial Investigative Units, thus enhancing the ability to detect and deter terrorist financing activities. The Anti-Terrorist Financing team will continue to work closely with domestic partners to further criminal investigations of terrorist financing and will participate and contribute to international forums such as the FATF and international law-enforcement working groups on terrorist financing.
CRA Compliance Programs Branch (CPB) Canada's AML/ATF Regime $30.4 $2.2 The CRA is focusing on the following three key areas: participating in committees and initiatives that aim to manage and strengthen Canada's AML/ATF Regime; continuing to enhance operational relationships with FINTRAC and other Regime partners; and conducting analysis related to money laundering and tax avoidance and evasion, which includes conducting compliance action focused on individuals and entities that are participating in money laundering and terrorist financing activities.

In previous years, compliance action on FINTRAC referrals was completed by the Special Enforcement Program (SEP). Because of organizational changes within the CPB, the SEP has been discontinued and this work will now be completed by auditors within the Small and Medium Enterprises Directorate (SMED). The Criminal Investigations Program (CIP) will continue to receive and analyze all FINTRAC disclosures for intelligence and potential criminal investigations before referring them to the SMED workload development area.

In 2013–14, CPB will continue to process all disclosures from FINTRAC on a priority basis. CPB will thoroughly review all disclosures received from FINTRAC and select for compliance actions those with identifiable tax and collection potential. The projected number of audits will remain at 90 cases, with a projected federal tax recovery of $9,000,000. Given the complexity of the files received from FINTRAC, the lengthy amount of time required to complete these cases, and the organizational changes within CPB, there may be an impact on the number of audits completed in 2013–14. These factors may also potentially impact the federal tax recovery for these cases. Information will be gathered from the FINTRAC disclosures and resulting compliance actions for intelligence purposes in an effort to identify trends that could positively impact the quality and success of future compliance actions.
Charities – Public Safety and Anti-Terrorism Combatting Terrorist Resourcing Through Charities $23.5 $4.1 The CRA has responsibility for administering the registration system for charities under the Income Tax Act. The existence of a strong regulatory deterrence against terrorist abuse of charities contributes to suppressing the financing of terrorism in Canada and to protecting and preserving the social cohesion and well-being of Canadians. The CRA's regulatory oversight of charities has been strengthened by the enactment of complementary measures under the Charities Registration (Security Information) Act and the PCMLTFA and by changes to the Income Tax Act that authorize broader information sharing between anti-money laundering and anti-terrorist financing agencies. Under these authorities, intelligence provided to the CRA assists in its mandate to protect the integrity of the registration system for charities and information disclosed by the CRA can be used for investigative purposes. In 2013–14, the CRA will continue to consolidate its capacity to identify and respond to cases involving possible links to terrorism by improving systems to support decisions, refining risk management tools, contributing to the international fight against money laundering and terrorist financing and bringing regulatory actions to the attention of Canadians.
CBSA Risk Assessment AML/ATF Regime $77.9 $1.5 The CBSA will continue to be involved in tactical and strategic analysis and assessments of intelligence related to money laundering and terrorist financing activities.

The CBSA will participate in joint forces operations with the RCMP and other government departments. Several specific operations exemplify the high level of cooperation between Regime partners and related international agencies.

As part of the 2012–13 priority of modernizing business processes, the CBSA will shift the focus of outbound currency activities through a risk-management process focusing on high-risk countries. This new approach will ensure the safety and security of Canadians while allowing the CBSA to continue its outbound activities without dedicated teams.
Admissibility Determination AML/ATF Regime $1.5 Border services officers (BSOs) maintain the responsibility to enforce the physical cross-border reporting obligation, including the examination of baggage and conveyances, and to question and search individuals for unreported or falsely reported currency and monetary instruments.

BSOs continue to seize currency and monetary instruments if they are not reported and are greater than the reporting threshold. Seized non-reported currency and monetary instruments are forfeited with no terms of release when BSOs suspect that the seized currency or monetary instruments are proceeds of crime or funds for use in terrorist financing activities. In all other instances, the seized amount will be returned upon payment of a penalty. BSOs are trained to recognize various monetary instruments and potential instances of non-compliance.
Internal Services AML/ATF Regime $1.6 Provide functional direction to the regions regarding the administration and enforcement of Part 2 of the PCMLTFA.

Provide critical strategic planning, priority setting and coordination for the Cross-Border Currency Reporting Program.

Continue to work closely with other key government departments on matters related to money laundering and terrorist financing.

Continue to be involved in international conferences and workshops that require the presence of cross-border law enforcement expertise.

Total Allocation For All Federal Partners (from Start to End Date)


$749.2 million

Total Planned Spending for All Federal Partners for 2013–14


$75.2 million

Certain organizations that are partners in Canada's AML/ATF Regime are exempt from reporting; therefore, the figures presented in the table may not add up to the total amount allocated.


Results to be achieved by non-federal partners (if applicable): Not applicable

Contact information:

Rachel Grasham
Chief, Financial Crimes Section
Phone: 613-943-2883

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