ARCHIVED - Department of Finance Canada - Supplementary Tables

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: Ongoing

Total federal funding allocation
(start to end date): $622,961 ($ 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, 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 renamed the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

The NICML was expanded and is now known as Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime. In December 2006, Bill C-25 amended the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to ensure that Canada's legislation remains consistent with international anti-money laundering and anti-terrorist financing standards as set out by the Financial Action Task Force, and is responsive to areas of domestic risk. The 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 Act.

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 are the Department of Finance Canada, the Department of Justice Canada, the Public Prosecution Service of Canada, FINTRAC, 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 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 Anti-Money Laundering and Anti-Terrorist Financing Regime.

Planning Highlights: The priorities for Canada's Anti-Money Laundering and Anti-Terrorist Financing 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: Department of Finance Canada
($ thousands)

Federal Partner Program Activity (PA)	Names of Programs for Federal Partners	Total Allocation (from Start to End Date)	Planned Spending for 2011–12
Financial Sector Policy	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	$3,600	$300
Total		$3,600	$300

Expected results by program:

The Department of Finance Canada will continue its effective oversight of Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime. The Department will also focus on the following areas:

• Monitoring the financial sector for money laundering and terrorist financing risks and other emerging illicit financing risks
• Participating in strategic domestic and international policy development activities that support the government’s commitments to the Regime
• Working to address the recommendations from the ten-year Treasury Board-mandated evaluation of the Regime
• Heading the Canadian delegation to participate as an active member in the Financial Action Task Force 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 Financial Action Task Force of South America Against Money Laundering
• Completing the implementation of the Budget 2009 measure related to counter-measures to tackle illicit financing
• Initiating the 5-year Parliamentary Review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act
• Continued participation in horizontal initiatives related to national security

Federal Partner: Department of Justice Canada
($ thousands)

Federal Partner Program Activity (PA)	Names of Programs for Federal Partners	Total Allocation (from Start to End Date)	Planned Spending for 2011–12
The National Initiative to Combat Money Laundering	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	$7,200	$100
Total		$7,200	$100

Expected results by program:

The International Assistance Group and the Criminal Law Policy Section of the Department of Justice Canada play a significant role in the Anti-Money Laundering and Anti-Terrorist Financing Regime. For 2011-12, it is anticipated that the Criminal Division will use the resources it receives to carry out work related to the Financial Action Task Force (FATF), including attending FATF-related international meetings. These may include 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 and the Financial Action Task Force of South America Against Money Laundering. Resources will also be allocated to ensure the Criminal Law Policy Section’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 issue raised during the prosecutions.

Federal Partner: Public Prosecution Service of Canada
($ thousands)

Federal Partner Program Activity (PA)	Names of Programs for Federal Partners	Total Allocation (from Start to End Date)	Planned Spending for 2011–12
Addressing criminal issues to contribute to a safer world	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	$13,800	$2,300
Total		$13,800	$2,300

Expected results by program:

For 2011–12, the Public Prosecution Service of Canada (PPSC) will continue to provide legal advice and support to the Royal Canadian Mounted Police and other enforcement agencies over the course of proceeds of crime, money laundering, terrorist financing and investigations relating to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, 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 Financial Action Task Force, as required.

Federal Partner: The Financial Transactions and Reports Analysis Centre of Canada
($ thousands)

Federal Partner Program Activity (PA)	Names of Programs for Federal Partners	Total Allocation (from Start to End Date)	Planned Spending for 2011–12
Collection, analysis, and dissemination of financial information	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	$355,585	$45,496
Total		$355,585	$45,496

Expected results by program:

Financial Intelligence

The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) produces and disseminates financial intelligence on suspected money laundering, terrorist financing and other threats to the security of Canada; making case disclosures to appropriate law enforcement agencies, the Canadian Security Intelligence Service or other agencies designated by legislation to support investigations and prosecutions. FINTRAC also conducts strategic analysis of financial intelligence from a variety of information sources, which informs various stakeholders about trends and patterns relating to money laundering and terrorist financing.

In 2011–12, FINTRAC will continue to provide law enforcement, intelligence bodies and international partners with timely financial intelligence and case disclosures to support investigations and other actions. FINTRAC will also seek to ensure that its partners, policy makers and other interested parties have the knowledge and support they need to make informed decisions on existing and emerging issues related to money laundering and terrorist financing.

Compliance

FINTRAC seeks to counter money laundering and terrorist financing by improving the compliance of its Reporting Entities with their obligations under Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and related regulations, including obligations concerning reporting, record keeping, identity verification and other requirements.

For 2011–12, FINTRAC will continue to use a risk-based approach to compliance that seeks to ensure that reporting entities understand and are engaged in meeting their legislative obligations regarding anti-money laundering and anti-terrorist financing.

Federal Partner: Royal Canadian Mounted Police
($ thousands)

Federal Partner Program Activity (PA)	Names of Programs for Federal Partners	Total Allocation (from Start to End Date)	Planned Spending for 2011–12
Money Laundering Units	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	$80,210	$6,989
Anti-Terrorist Financing Units	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	$32,563	$5,041
Public Works and Government Services Canada Accommodations		$3,303	$551
Total		$116,076	$12,581

Expected results by program:

Money Laundering Units

Enhance national and international opportunities for the detection and investigation of money laundering activities, including leading money laundering investigations targeting major organized crime.

Explore strategic realignment of Money Laundering Units (AML) resources to maximize their effectiveness. Consideration will be given to critical mass, recognition of RCMP national priority targets and large-scale money laundering targets, and location of international airports within Canada.

Develop proactive Financial Transactions and Reports Analysis Centre of Canada disclosures, as well as other intelligence, to a point where AML and Integrated Proceeds of Crime resources can be maximized in order to disrupt organized criminals and crime groups.

Anti-Terrorist Financing Units

Through the gathering and analysis of financial intelligence, the Anti-Terrorist Financing Team will focus on converting that intelligence into proactive investigations for the Anti-Terrorist Financial Investigative Units, thus enhancing its 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 Financial Action Task Force and international law-enforcement working groups on terrorist financing.

Federal Partner: Canada Revenue Agency
($ thousands)

Federal Partner Program Activity (PA)	Names of Programs for Federal Partners	Total Allocation (from Start to End Date)	Planned Spending for 2011–12
Special Enforcement Program (SEP)	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	$25,968	$2,200
Charities Directorate	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	$16,129*	$4,351
Total		$42,097	$6,551
* The total allocation was adjusted to accurately reflect the funding that Canada Revenue Agency Charities received in Budget 2008.

Expected results by program:

Special Enforcement Program

The Canada Revenue Agency (CRA) is focusing on the following three key areas: participating in committees and initiatives that aim to manage and strengthen Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime; continuing to enhance operational relationships with the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and other Regime partners; and conducting research and analysis as it relates to money laundering and tax avoidance and evasion, which would include conducting compliance action focused on individuals and entities that are participating in money laundering and terrorist financing activities.

In 2011–12, the Special Enforcement Program (SEP) will continue to treat all disclosures from FINTRAC on a priority basis. That is, SEP will thoroughly review all disclosures received from FINTRAC and select for audit those with identifiable tax potential. The projected number of audits will remain at approximately 90 cases, with a projected federal tax recovery of $9,000,000. However, given the complexity of the files received from FINTRAC, the lengthy amount of time required to complete these cases and the fact that the number of referrals continue to increase, the number of audits SEP can complete in 2011–12 may be impacted. These factors will also potentially impact the federal tax recovery for these cases.

The results of these audits will be gathered for intelligence purposes to determine whether trends or additional participants in these activities can be identified. 

Charities Directorate 

Under the Income Tax Act, CRA is responsible for administering the registration system for charities. This responsibility recognizes 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 the 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 that authorize broader information sharing between partners of Canada’s Anti-Money Laundering and Anti-Terrorist Financing Regime. Under these authorities, intelligence provided to CRA assists in its mandate to protect the integrity of the registration system for charities, and information disclosed by CRA can be used for investigative purposes. In 2011–12, CRA will continue to consolidate its capacity to identify and respond to cases involving possible links to terrorism by deploying new decision support systems, refining risk management tools, developing a privacy management framework and bringing regulatory actions to the attention of Canadians.

Federal Partner: Canada Border Services Agency
($ thousands)

Federal Partner Program Activity (PA)	Names of Programs for Federal Partners	Total Allocation (from Start to End Date)	Planned Spending for 2011–12
Assessment	Anti-Money Laundering and Anti-Terrorist Financing Regime		$807
Enforcement	Anti-Money Laundering and Anti-Terrorist Financing Regime		$4,693
Border	Anti-Money Laundering and Anti-Terrorist Financing Regime		$338
Recourse	Anti-Money Laundering and Anti-Terrorist Financing Regime		$1,688
Total		$82,126	$7,526

Expected results by program:

Risk Assessment

• Continue to be involved in tactical and strategic analysis and assessments of intelligence related to money laundering and terrorist financing activities.
• Participate in the exchange of currency seizure information to assist in the investigation or prosecution of money laundering and terrorist financing activity offences with the U.S. Immigration and Customs Enforcement and the U.S. Customs and Border Protection.
• Participate in joint forces operations with the Royal Canadian Mounted Police and other government departments. Several specific operations exemplify the high level of cooperation between the Regime partners and related international agencies.

Admissibility Determinations

• 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.
• Dedicated Cross-Border Currency Reporting Teams will continue to be an integral part of the Canada Border Services Agency’s (CSBA) outbound enforcement effort.
• The Currency Detector Dogs Service will continue to play an important role in the detection of unreported currency that may be related to money laundering or terrorist financing.

Recourse

• Allow for 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 Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

Internal Services

• 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.
• 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)	Total Planned Spending for All Federal Partners for 2011–12
$622,961†	$74,854

† Certain organizations that are partners in Canada’s Anti-Money Laundering and Anti-Terrorist Financing 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):

Contact information:

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