ARCHIVED - Department of Finance Canada

Name of horizontal initiative: Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime—formerly the National Initiative to Combat Money Laundering

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

Lead department program activity: Economic and Fiscal Policy Framework

Start date of the horizontal initiative: June 2000

End date of the horizontal initiative: 2009-10

Total federal funding allocation (start to end date): $455,408 (thousands)

Description of the horizontal initiative (including funding agreement):

The National Initiative to Combat Money Laundering (NICML) was formally established in 2000 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 (PCMLA), created a mandatory reporting system for suspicious financial transactions, large cross-border currency transfers, and certain proscribed transactions. The legislation also established the Financial Transactions 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 PCMLA 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 is now known as Canada's Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime. In December 2006, Bill C-25 amended the PCMLTFA to ensure that Canada's legislation remains consistent with international AML/ATF standards as set out by the Financial Action Task Force on Money Laundering (FATF) and is responsive to areas of domestic risk. Amendments include enhanced client identification requirements, the creation of a registration regime for money services businesses, and the establishment of an administrative and 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 Anti-Money Laundering and Anti-Terrorist Financing Regime is a horizontal initiative composed of both funded and non-funded partners. The funded partners include the Department of Finance Canada, FINTRAC, the Royal Canadian Mounted Police (RCMP), the Canada Border Services Agency (CBSA)—Immigration and Customs, the Canada Revenue Agency—Charities Directorate, the Department of Justice Canada, the Public Prosecution Service of Canada, and the Canadian Security Intelligence Service (CSIS); non-funded partners include Public Safety Canada and the Office of the Superintendent of Financial Institutions.

An assistant deputy minister-level steering committee and an interdepartmental working group, consisting of all partners and led by the Department of Finance Canada, direct and coordinate the government's efforts to combat money laundering and terrorist financing activities. In addition, the Department chairs a public-private sector advisory committee. This is a broad-based advisory committee that includes both public- and private-sector representatives to provide general guidance for Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime.

($ thousands)

Federal Partners	Federal Partner Program Activity (PA)	Names of Programs for Federal Partners	Total Allocation (from Start to End Date)	Planned Spending for 2009-10	Expected Results for 2009-10
Department of Finance Canada	Financial Sector Policy	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	$2,700	$300	Effective oversight of Canada Anti-Money Laundering and Anti-Terrorist Financing Regime (the Regime)
					Undertake a 10-year Treasury Board-mandated evaluation of the Regime to assess effectiveness and access to continued funding
					Monitor the financial sector for money laundering and terrorist financing risks and other emerging illicit financial risks
					Participate in international forums related to combatting money laundering and terrorist financing, in particular the G7 financial experts meetings, the FATF, the Caribbean Financial Action Task Force, and the Asia Pacific Group on Money Laundering
Department of Justice Canada	The National Initiative to Combat Money Laundering	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	$7,000	$100	The Criminal Division of the Department of Justice Canada plays a significant role in the regime. For 2009-10, it is anticipated that the Criminal Division will use the resources it receives to carry out work related to the FATF, including attending FATF-related international meetings. Resources will also be allocated to ensure the Criminal Division's continued involvement in policy development relating to money laundering and terrorist financing. Finally, the Human Rights Law Section will receive money to deal with any ancillary constitutional issues raised during the prosecutions.
Public Prosecution Service of Canada (PPSC)	Addressing criminal issues to contribute to a safer world for Canada	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	$9,200	$2,300	The PPSC plays a significant role in the regime. For 2009-10, it is anticipated that information provided to law enforcement by FINTRAC will result in more prosecutorial legal advice being provided to law enforcement. It will also result in additional charges being laid for money laundering and terrorist financing offences and thus result in an increased workload for prosecutors. The PPSC also has responsibilities related to the PCMLTFA. The planned work includes applications for production orders, increases in border seizure and forfeiture work associated with suspected proceeds of crime, and prosecutions related to offences created within the Act. In addition, resources will be used to provide training to law enforcement personnel and prosecutors and for the development and coordination of policy as it relates to money laundering and terrorist financing. Finally, PPSC resources will carry out work related to the FATF, including attending the FATF international meeting.
Financial Transactions Reports Analysis Centre of Canada (FINTRAC)	Collection, analysis, and dissemination of financial information	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	$269,085	$37,500	Produce technology-driven financial intelligence analysis and case disclosures that are widely used by law enforcement and intelligence agencies with a program that fosters compliance by the reporting entities
Canada Border Services Agency(CBSA)	Security	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	$57,008	$7,727	CBSA border services officers are responsible for the enforcement of the cross-border currency reporting program, which includes conducting searches, questioning individuals, and seizing non-reported or falsely reported currency and suspected proceeds of crime. In addition, FINTRAC discloses information to CBSA Immigration, which plays a key role in denying the use of Canadian territory to criminals and persons who pose security threats to Canada.
					The CBSA is responsible for administering Part 2 of the PCMLTFA, "Reporting of Currency and Monetary Instruments." The Cross-Border Currency Reporting (CBCR) Program requires that travellers report the importation and exportation of currency and monetary instruments equal to or greater than CAD$10,000. Part 2 also provides for the enforcement element of the CBCR Program, which includes conducting searches, questioning individuals, and seizing non-reported or falsely reported currency and suspected proceeds of crime.
Canada Revenue Agency (CRA)	Charities Directorate	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	$7,429	$4,976	The CRA has responsibility for administering the registration system for charities under the Income Tax Act. In recognition that 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/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 can be used for investigative purposes. For 2009-10, it is anticipated that the CRA will use the resources it receives to strengthen capacity to identify and respond to cases involving possible links to terrorism through investments in facilities and IT development and an increase in on-going, direct program full-time equivalents.
Canada Revenue Agency (CRA)	Special Enforcement Program	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	$21,568	$2,200	The CRA is focussing on the following four pillars: participation in committees and initiatives to manage and enhance the AML/ATF Regime; enhancement of the operational relationship with FINTRAC and other partners in the Regime; research and analysis; and contributing to the work of international organizations to enhance cooperation between tax administrations and anti-money laundering and anti-terrorist financing authorities by participating in the Organisation for Economic Co-operation and Development Sub-Group on tax crime and money laundering. All disclosures received from FINTRAC are thoroughly reviewed, and those with potential are selected for audit by the Special Enforcement Program. The projected number of audits is 90, with a projected federal tax recovery of $7,000,000.
Royal Canadian Mounted Police(RCMP)-Money Laundering Units	Money Laundering Units	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	$55,898	$6,872	Enhance national and international opportunities for the detection and investigation of money laundering activities
					Develop FINTRAC disclosures and other intelligence to a point where resources from the Integrated Proceeds of Crime Units or elsewhere in the RCMP can be directed towards investigations in an effort to increase seizures.
					The resource level in Canada's three major urban centres (Vancouver, Toronto, and Montréal) was increased in 2007 and continues to positively affect the investigative capacity in those centres to conduct investigations on leads related to Canada's AML/ATF Regime.
RCMP—Anti-Terrorist Financing Team (ATFT)	Special Initiatives	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	$22,937	$5,158	Through the gathering and analysis of financial intelligence, the Anti-Terrorist Financing Team will focus on converting that intelligence into proactive investigations, thus enhancing the Department's ability to detect and deter terrorist financing activities.
Total			$453,1251	$67,133

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

Contact information:

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