Archived - Report on Plans and Priorities 2014–15: Supplementary Tables: page 4
Name of horizontal initiative: Canada's Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime
Name of lead department: Department of Finance Canada
Lead department PAA Program(s): 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)†: $790.0 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 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, royal assent was given to amendments to the PCMLTFA to further align Canada's legislation with international AML/ATF 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 Foreign Affairs, Trade and Development 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.
|Federal partner||PAA program||Contributing activities/ programs||Total allocation (from start to end date)†||2014–15 Planned spending||2014–15 Expected results, including targets|
|Department of Finance Canada||Financial Sector Policy||Policy Development and Oversight of AML/ATF Regime||4.2||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:
|Department of Justice Canada||Justice Policies, Laws and Programs||Criminal Law Policy Section (CLPS) and International Assistance Group (IAG)||7.5†††||0.1||The IAG (which is part of the Litigation Branch) and the CLPS of the Department of Justice Canada play a significant role in the AML/ATF Regime. For 2014–15, it is anticipated that the IAG and the CLPS will use the resources they receive to carry out work related to FATF, including attending FATF−related international meetings, providing advice to AML/ATF Regime partners in relation to the FATF and participating in the interdepartmental work in preparation for the next evaluation of Canada under the FATF's 4th Round Mutual Evaluation process. These tasks may include support and attendance in relation to the meetings of the working groups of the FATF (e.g., the new Policy Development Group, the International Co-operation Review Group, and the Risks, Trends and Methods Group), and FATF-Style Regional Bodies, including the APG, the CFATF and the GAFISUD. Resources will also be allocated to ensure that the continued involvement of CLPS 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, National Security and Northern Prosecutions Program||Drug, National Security and Northern Prosecutions Program||16.9||2.1||In 2014–15, the PPSC will continue to provide legal advice and support to the RCMP and other law enforcement agencies during 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 AML/ATF 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||496.6||22.8||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 2014–15, FINTRAC will continue to provide its partners, policy makers and other interested parties with relevant and actionable financial intelligence products that contribute to the public safety of Canadians, and to 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||22.8||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 2014–15, 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 will ensure that they receive timely and accurate responses to their inquiries.
|RCMP||Federal Policing||Money Laundering Units||101.2||7.0||As part of the Federal Policing Re-engineering (FPR), Money Laundering resources were pooled with other federal resources and now form part of Federal Serious and Organized Crime (FSOC). The FSOC units include analytical resources. RCMP money laundering investigators remain located in the high-risk locations and, as part of the FSOC units, will continue to detect and deter money laundering activities, and 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.
|Federal Policing Criminal Operations (FPCO), Integrated National Security Enforcement Teams (INSETs) and National Security Enforcement Sections (NSESs)||47.6||5.0||Through the gathering and analysis of financial intelligence, the FPCO, INSETs and NSESs will focus on converting financial criminal intelligence into proactive investigations, thus enhancing the RCMP's ability to detect and deter terrorist financing activities. The FPCO, INSETs and NSESs will continue to work closely with domestic partners to further criminal investigations of terrorist financing and will continue to participate in, and contribute to, international organizations such as the FATF and international law-enforcement working groups on terrorist financing.|
|CRA||Compliance Programs Branch (CPB)||Canada's AML/ATF Regime||32.6||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 AML/ATF 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.
Until March 2013, 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 its work is now being completed by auditors in the Small and Medium Enterprises Directorate (SMED). The Criminal Investigations Program (CIP) continues to receive and analyze all FINTRAC disclosures for intelligence and potential criminal investigations before referring them to the SMED workload development area.
In 2014–15, the CPB will continue to process all disclosures from FINTRAC on a priority basis. The 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 the CPB, there may be an impact on the number of audits completed in 2014–15. 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||27.6||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 AML and ATF partners. 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 to its partners can be used for investigative purposes. In 2014–15, the CRA will continue to identify and respond to cases involving possible links to terrorism by improving systems to support decisions and refining risk management tools. The CRA will contribute to the international fight against terrorist financing and bring regulatory actions to the attention of Canadians. The CRA will also continue to collaborate with AML/ATF Regime partners through domestic interdepartmental working groups and internationally through the FATF and the United Nations.|
|CBSA||Admissibility Determination||Highway Mode
Courier Low Value Shipment
|82.0||2.7||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.
|Recourse||Recourse||0.3||Recourse is the legislative or administrative mechanism that provides Canadians with a timely, objective, consistent and transparent internal review process intended to determine the correctness of CBSA decisions and actions taken under the PCMLTFA.|
|Internal Services||AML/ATF Regime||1.1||Internal Services:
|Total for All Federal Partners||790.0††||72.9|
† The horizontal initiative is ongoing, with no fixed end date. Therefore, allocation amounts include funding to date (up to and including funding for the 2014–15 fiscal year), but exclude future funding.
†† Certain organizations that are partners in Canada's AML/ATF Regime are exempt from reporting; therefore, the amounts presented in the table may not add up to the total amount allocated.
††† This amount includes funding provided to the Department of Justice Canada before the creation of the PPSC. Since 2007–08, total funding provided to the Department of Justice Canada has been $0.7 million.
Results to be achieved by non-federal partners (if applicable): Non-applicable
Contact information: Rachel Grasham
Chief, Financial Crimes – Domestic Section
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