Horizontal initiatives
General information
Name of horizontal initiative: Canada's Anti Money Laundering and Anti Terrorist Financing Regime
Lead department(s): Department of Finance Canada
Federal partner organization(s): Canada's Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime has 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, the Financial Transactions and Reports Analysis Centre of Canada, the Canada Border Services Agency, the Canada Revenue Agency, the Canadian Security Intelligence Service, and the Royal Canadian Mounted Police. The non funded partners are Public Safety Canada, the Office of the Superintendent of Financial Institutions Canada, and Global Affairs Canada.
Non federal and non governmental partner(s): Not applicable
Start date of the horizontal initiative: June 2000
End date of the horizontal initiative: Ongoing
Description of the horizontal initiative: Canada's AML/ATF Regime was formally established in 2000 as the National Initiative to Combat Money Laundering, 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, with a mandate to ensure compliance of reporting entities, to collect and analyze 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 and was renamed the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. The National Initiative to Combat Money Laundering was expanded, and its name formally was changed to Canada's Anti Money Laundering and Anti Terrorist Financing Regime.
The regime is regularly reviewed to ensure that it remains effective, addresses emerging risks, and maintains Canada's international leadership in the fight against money laundering and terrorist financing. Reviews are informed by various evaluations, consultations with industry, assessments of money laundering and terrorist financing risks, as well as international considerations, including the activities of the Financial Action Task Force and the actions of G7 partners. As a result of reviews, changes to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the regime as a whole have been implemented over the years. The most significant changes were made after the Parliamentary Reviews of 2005–06 and 2012–13.
Governance structures: Canada’s AML/ATF Regime is a horizontal initiative comprising 11 federal partner organizations, led by the Department of Finance Canada.
An interdepartmental steering committee, led by senior officials and consisting of all partners, provides input and advice on AML/ATF policy. In addition, general advice on Canada’s AML/ATF Regime is provided by the Advisory Committee on Money Laundering and Terrorist Financing, a broad-based advisory group composed of public and private sector representatives.
Total federal funding allocated (from start to end date) (dollars): 1,093,478,784
Total federal planned spending to date (dollars): 1,071,638,572
Total federal actual spending to date (dollars): 925,000,878
Date of last renewal of the horizontal initiative: Not applicable
Total federal funding allocated at the last renewal and source of funding (dollars): Not applicable
Additional federal funding received after the last renewal (dollars): Not applicable
Funding contributed by non federal and non governmental partners (dollars): Not applicable
Fiscal year of planned completion of next evaluation: Not applicable
Shared outcome of federal partners: An effective regime that respects domestic legal and constitutional frameworks and is consistent with international standards
Performance indicator(s): Level of compliance with international standards and effectiveness
Target(s): Improved compliance and effectiveness (Implementation of a new regime-wide performance measurement framework is expected to begin in 2018–19.)
Expected outcome of non federal and non governmental partners: Not applicable
Name of theme: Not applicable
Planning highlights: In 2018–19, the Department of Finance Canada and its AML/ATF Regime partners will pursue the following regime-wide priorities:
- supporting the Parliamentary Review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act undertaken by the House of Commons Standing Committee on Finance, and managing the consultations on the discussion paper released by the Department on potential changes to the regime
- working with the provincial and territorial governments to strengthen corporate transparency and the availability of Beneficial Ownership information
- contributing to the ongoing evolution of international AML/ATF standards and their effective implementation through active Canadian participation at the Financial Action Task Force and the leveraging of Canada’s 2018 Presidency of the G7
- implementing the findings of the regime’s internal governance review, with a view to strengthening joint priority setting, collaboration and decision-making, and performance measurement and reporting between all AML/ATF Regime partners, at the working and senior management levels
- further develop the recommendations of the Assistant Deputy Minister Anti-Money Laundering Advisory Committee on Operational Effectiveness to address operational challenges faced by key Government of Canada partners responsible for investigating and prosecuting threats of money laundering
- updating the 2015 National Inherent Risk Assessment to take account of new money laundering and terrorist financing risks and support the development of revised typologies, in consultation with the private sector
Contact information
Ian Wright
Director, Financial Crimes – Governance and Operations
Department of Finance Canada
90 Elgin Street
Ottawa, Ontario K1A 0A6
Phone: 613-369-3853
Email: ian.wright@canada.ca
ER 1.1
The Department of Finance Canada will continue to coordinate Canada’s AML/ATF Regime. The Department will focus on the following areas:
- working with regime partners to identify initiatives and actions to improve the effectiveness of Canada’s AML/ATF Regime
- this work will be informed by internal research and policy development, consultations with private sector stakeholders, the National Inherent Risk Assessment, and the Financial Action Task Force’s 2017 mutual evaluation of Canada
- coordinating the interdepartmental working group on regime performance measurement and governance
- continuing to lead the implementation of commitments made in Budget 2014 and Budget 2015 to strengthen Canada’s AML/ATF Regime, including the development and coming into force of Budget 2017 and regulatory amendments
- participating in interdepartmental and horizontal initiatives related to the mandates of AML/ATF Regime partners
- heading the Canadian delegation to, and actively participating as a member of, the Financial Action Task Force and other regional groups
- this participation will involve contributing to the Financial Action Task Force’s mutual evaluation process under the fourth round of assessments and to key international policy development initiatives, including collaboration with key allies such as the G7
PI 1.1
The Department of Finance Canada’s contribution to the regime consists chiefly of policy development and coordination, including leadership on horizontal regime governance. Indicators that reflect the Department’s role in the regime are as follows:
- meetings of steering committees, working–level committees and working groups with a focus on money laundering and terrorist financing
- the development of legislative and regulatory changes in response to identified regime gaps and AML/ATF priorities
- outreach and consultation activities with public-private sector advisory committees and working groups on the risks of money laundering and terrorist financing
- participation in international meetings of AML/ATF organizations, committees and initiatives (including the meetings attended and nature of Canada’s contribution)
T 1.1
The Department of Finance Canada’s contribution to the regime consists chiefly of policy development and coordination, including leadership on horizontal regime governance. Targets that reflect the Department’s role in the regime are as follows:
- meetings with the private sector through the Advisory Committee on Money Laundering and Terrorist Financing and subsidiary working groups, as well as conferences and other activities
- regular attendance at, and participation in, meetings of the Financial Action Task Force and regional and working groups
ER 3.1
The PPSC will continue to provide legal advice and support to the Royal Canadian Mounted Police and other law enforcement agencies during the course of investigations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and under provisions of the Criminal Code relating to the proceeds of crime, money laundering and terrorist financing. The PPSC will also continue to undertake prosecutions that arise out of those investigations. The PPSC is not, however, an investigative agency and therefore does not determine who should be investigated and for what activities.
The PPSC will continue to provide AML/ATF Regime-related training to law enforcement personnel and prosecutors and to support policy development and coordination. The PPSC will also support the work of the Financial Action Task Force as required.
PI 3.1
- Number of new possession of proceeds of crime charges under the Criminal Code referred to the PPSC during the fiscal year
- Number and percentage of files involving new possession of proceeds of crime charges under the Criminal Code in which PPSC counsel provided legal advice
- Number and percentage of files involving new money laundering charges under the Criminal Code in which PPSC counsel provided legal advice
- Number of new terrorism financing charges under the Criminal Code referred to the PPSC during the fiscal year
- Number and percentage of files involving new terrorism financing charges under the Criminal Code in which PPSC counsel provided legal advice
- Number of new charges under the Proceeds of Crime (Money Laundering) and Terrorist Financing Actreferred to the PPSC during the fiscal year
- Number and percentage of files involving new charges under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act in which PPSC counsel provided legal advice
- Nature of liaison and outreach activities with AML/ATF Regime partners and other stakeholders
T 3.1
The PPSC does not have targets for volume and characteristics of caseload because referrals for prosecution are driven by external influences beyond its direct control.
ER 4.1
FINTRAC will continue to provide its partners, policy makers and other interested parties with relevant and actionable financial intelligence that contributes to the public safety of Canadians. FINTRAC will also continue to support efforts to disrupt the ability of criminals and terrorist groups that seek to abuse Canada’s financial system, and to reduce the profit incentive of crime.
PI 4.1
- Number of police, law enforcement, national security and other partner agency major and project-level investigations supported by FINTRAC financial intelligence disclosures
- Percentage of FINTRAC’s financial intelligence disclosures that align with partner investigative priorities
- Percentage of feedback from disclosure recipients that indicates that the FINTRAC financial intelligence disclosure was actionable
- Percentage of feedback from proactive disclosure recipients that indicates that the independent analysis provided by FINTRAC was actionable
T 4.1
- FINTRAC’s financial intelligence disclosures supported 100 police, law enforcement, national security and other partner agency major and project-level investigations
- 85% of FINTRAC’s financial intelligence disclosures align with partner investigative priorities
- 85% of feedback from disclosure recipients indicates that the FINTRAC financial intelligence disclosure was actionable
- 75% of feedback from proactive disclosure recipients indicates that the independent analysis provided by FINTRAC was actionable
ER 4.2
As part of Canada’s AML/ATF Regime, FINTRAC seeks to deter money laundering and terrorist financing by improving the compliance behaviours of reporting entities that have obligations for reporting, record keeping, identity verification and other requirements under Part 1 and Part 1.1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and associated Regulations.
PI 4.2
- Percentage of follow-up examinations where reporting entities demonstrate higher rates of compliance with their money laundering and terrorism financing legislative and regulatory obligations
- Percentage of follow-up examinations where reporting entities demonstrate improvement in the quality of their reporting to FINTRAC
- Percentage of Financial Transaction Reports submitted to FINTRAC that meet quality requirements
T 4.2
- 80% of follow-up examinations on reporting entities demonstrate higher rates of compliance with their money laundering and terrorism financing legislative and regulatory obligations
- 80% of follow-up examinations on reporting entities demonstrate improvement in the quality of their reporting to FINTRAC
- 80% of Financial Transaction Reports submitted to FINTRAC meet quality requirements
ER 4.3
FINTRAC’s Strategic Policy and Review Program will use its operational and strategic expertise and knowledge of Canada’s law enforcement and national security priorities to identify potential enhancements to legislation and regulations, with a view to strengthening Canada’s AML/ATF Regime as a whole.
PI 4.3
- Percentage of key international and domestic AML/ATF committees and working groups in which FINTRAC participates and influences policy decisions based on its expertise in preventing, detecting and deterring money laundering and terrorist financing activities
T 4.3
- FINTRAC participates and influences policy decisions in 75% of key international and domestic AML/ATF committees and working groups
ER 4.4
FINTRAC’s Strategic Intelligence and Research Program will provide a wide analytic perspective on the nature, scope and threat posed by money laundering and terrorist financing, with a focus on strengthening Canada’s ability to prevent, detect, deter and disrupt the methods and techniques used by criminals to launder money or fund terrorist activities.
PI 4.4
- Number of strategic financial intelligence products recognized by recipients for making a significant contribution to their understanding of money laundering and terrorism financing issues, trends and risks
T 4.4
- 5 or more of FINTRAC’s strategic financial intelligence products are recognized by recipients for making a significant contribution to their understanding of money laundering and terrorism financing issues, trends and risks
ER 5.1
Investigation
In support of its strategic priority on Economic Integrity, the RCMP will continue to prevent, detect and disrupt crimes that threaten Canada’s economy and security, including those involving money laundering and terrorist financing in Canada. This expected result will be achieved by conducting investigations in the areas of highest risk and by using the information and expertise of national and international partners.
Collaboration
The RCMP’s Federal Policing Criminal Operations Money Laundering Working Group will continue to meet on a regular basis. This working group allows representatives from key RCMP divisions and National Headquarters to ensure that their operational priorities align. In addition to improving collaboration between the divisions and National Headquarters, this working group has made progress in addressing key issues identified in the RCMP’s Anti–Money Laundering Strategy.
The Assistant Deputy Minister Anti-Money Laundering Advisory Committee on Operational Effectiveness, co–led by the RCMP and FINTRAC, focuses on the operational challenges faced by key Government of Canada partners responsible for investigating and prosecuting threats of money laundering. Specifically, this committee has identified gaps and challenges that hinder the ability to investigate and, ultimately, to prosecute financial crimes in Canada, and recommended options to senior Government of Canada officials.
The RCMP will continue to work with its partners, specifically FINTRAC, to ensure that products produced by FINTRAC are aligned with key operational priorities and the operational realities of the RCMP. By doing so, both the RCMP and FINTRAC will improve efficiencies and maximize the use of their resources.
Training
Further to recommendations identified in its Anti–Money Laundering Strategy, the RCMP launched a Proceeds of Crime – Money Laundering training course in 2016, designed to enhance the ability of officers within the RCMP’s Federal Policing program to investigate financial crimes. The course will continue to be available to members of all RCMP divisions and to Canada’s AML/ATF Regime partners. This additional training in financial crime investigations will increase the ability of Federal Policing members to examine the proceeds of crime and to undertake investigations on money laundering.
PI 5.1
Investigation
- Percentage of all Tier I and Tier 2 projects that have a money laundering component1
Collaboration
- Number of joint meetings held by the RCMP and FINTRAC to set priorities
- Number of meetings held by the Federal Policing Criminal Operations Money Laundering Working Group
- Percentage of high-risk traveller files where assistance was sought from FINTRAC through Voluntary Information Records
- RCMP participation in the annual meeting of the Five Eyes Terrorist Financing Working Group
Training
- Number of training sessions delivered, including the number of sessions of the Proceeds of Crime – Money Laundering course and other courses on terrorist financing
- Number of trained personnel from the RCMP and domestic and international partners
T 5.1
Investigation
- Target to be determined for Tier I and Tier 2 projects having a money laundering component
Collaboration
- The RCMP aims to hold 3 joint meetings to set priorities between the RCMP and FINTRAC
- The RCMP aims to hold 3 meetings of the Federal Policing Criminal Operations Money Laundering Working Group
- The RCMP aims to examine 100% of high-risk traveller files for possible terrorist financing components by seeking FINTRAC’s assistance through Voluntary Information Records
- The RCMP will participate in the annual meeting of the Five Eyes Terrorist Financing Working Group, held in Canada, in May 2018
Training
- The RCMP plans to deliver 4 sessions of the Proceeds of Crime – Money Laundering training course to train 96 investigators, including approximately 85 RCMP investigators and analysts
- The RCMP plans to deliver 3 Anti-Terrorist Financing training courses. A total of 90 investigators are expected to be trained, including approximately 60 RCMP investigators and analysts
ER 6.1
The CRA will focus on the following 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
- 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
The Domestic Compliance Programs Branch of the CRA will continue to process all disclosures from FINTRAC on a priority basis. The branch 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 is 90 cases, with a projected federal tax reassessment of $9 million. Because of the complexity of the files received from FINTRAC, there may be an impact on the number of audits completed in 2018–19. This factor may also potentially impact the federal tax reassessment for these cases.
Information will be gathered from FINTRAC disclosures and resulting compliance actions for intelligence purposes to identify trends that could have a positive effect on the quality and success of future compliance actions.
PI 6.1
- Total number of audits completed
T 6.1
- 90 audits and a projected federal tax reassessment of $9 million
ER 6.2
The CRA administers 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 Proceeds of Crime (Money Laundering) and Terrorist Financing Act and by changes to the Income Tax Act authorizing broader information sharing between AML and ATF 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 to its partners can be used for investigative purposes. The CRA will continue to identify and respond to cases involving the risk of terrorist abuse by improving systems to support decisions and by refining risk management tools. The CRA will contribute to the international fight against terrorist financing and will 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 Financial Action Task Force and the United Nations.
PI 6.2
Performance indicators are not applicable owing to the nature of the workload and the mandate of the CRA’s Review and Analysis Division.
T 6.2
Targets are not applicable owing to the nature of the workload and the mandate of the CRA’s Review and Analysis Division.
ER 7.1
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 Force Operations with the RCMP and other federal departments.
PI 7.1
- Number of money laundering- and terrorist financing-related intelligence products produced and/or disseminated
- Number of Joint Force Operations completed with the RCMP and other government departments
T 7.1
Not applicable
ER 7.2
In all modes and streams of operation, Border Services Officers maintain the administrative responsibility to collect cross-border currency and monetary instrument reports from inbound and outbound travellers and entities; these reports are forwarded to FINTRAC.
In all modes of operation, Border Services Officers seize unreported and falsely reported currency and monetary instruments arriving at or departing from ports of entry.
PI 7.2
- Number of compliance reports accepted at ports of entry by the CBSA and forwarded to FINTRAC
- Number of currency and monetary instrument seizures carried out by Border Services Officers
T 7.2
- All travellers are screened
- All travellers are asked whether they are carrying funds over $10,000
ER 7.3
The CBSA acknowledges receipt of the request for a minister’s review and confirms that a file has been opened.
PI 7.3
- Percentage of enforcement appeals received that are acknowledged within 10 calendar days (this includes all enforcement actions, including Proceeds of Crime (Money Laundering) and Terrorist Financing Act [PCMLTFA] appeals)
- Percentage of enforcement appeals received that are decided within 180 calendar days (this includes all enforcement actions, including PCMLTFA appeals)
T 7.3
- 90% of enforcement appeals are acknowledged within 10 calendar days
- 80% of enforcement appeals are decided within 180 calendar days
ER 7.4
- Provide functional direction to the regions regarding the administration and enforcement of Part 2 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act
PI 7.4
Not applicable
T 7.4
Not applicable
1 Tiered files are high-priority investigations. Tier 1 are the highest-priority files requiring significant oversight and direction from National Headquarters. Tier 2 files require some oversight and direction from National Headquarters.
