ARCHIVED - Department of Finance Canada - Supplementary Tables

Name of horizontal initiative: Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime

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): $690.6 million†

Description of the Horizontal Initiative (including funding agreement): Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime had its origins in 2000 when the National Initiative to Combat Money Laundering (NICML) was established as part of the government's ongoing efforts 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.

Also in 2001, the NICML was expanded and its name was formally changed to “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 further align Canada's legislation with international anti-money laundering and anti-terrorist financing standards as set out by the Financial Action Task Force, and 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 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 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, the Financial Transactions and Reports Analysis Centre, 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, and the Department of Foreign Affairs and International Trade. 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

Federal Partner Program Activity	Names of Programs for Federal Partners	($ millions)
		Total Allocation (from Start to End Date)	Planned Spending for 2012–13
Financial Sector Policy	Policy Development and Oversight of Anti-Money Laundering and Anti-Terrorist Financing Regime	3.9	0.3
Total		3.9	0.3

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, including continuing work with respect to proposed amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Regulations on ascertaining identity;
  
• Working to address the recommendations from the 10-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;
  
• Implementing the Budget 2010 measure related to counter-measures to tackle illicit financing;
• Assessing the findings of the five-year Parliamentary Review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act; and
• Continued participation in horizontal initiatives related to national security led by Public Safety Canada.

Federal Partner: Department of Justice Canada

Federal Partner Program Activity	Names of Programs for Federal Partners	($ millions)
		Total Allocation (from Start to End Date)	Planned Spending for 2012–13
Justice policies, laws and programs	Criminal Law Policy Section (CLPS) and International Assistance Group (IAG)	7.3	0.1
Total		7.3	0.1

Expected results by program:

The International Assistance Group (IAG) and the Criminal Law Policy Section (CLPS) of the Department of Justice Canada (which is part of the Justice Litigation Branch) play a significant role in the Anti-Money Laundering and Anti-Terrorist Financing Regime. For 2011–12, it is anticipated that the IAG and the CLPS will use the resources they receive to carry out work related to the Financial Action Task Force (FATF), including attending FATF-related international meetings and providing advice in relation to 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 and the “GAFISUD,” the Financial Action Task Force body of South America Against Money Laundering. Resources will also be allocated to ensure that 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.

Federal Partner: Public Prosecution Service of Canada

Federal Partner Program Activity	Names of Programs for Federal Partners	($ millions)
		Total Allocation (from Start to End Date)	Planned Spending for 2012–13
Drug, Criminal Code and terrorism prosecution program	Drug, Criminal Code and terrorism prosecution program	16.1	2.3
Total		16.1	2.3

Expected results by program:

For 2012–13, the Public Prosecution Service of Canada (PPSC) will continue to provide legal advice and support to the Royal Canadian Mounted Police 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 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

Federal Partner Program Activity	Names of Programs for Federal Partners	($ millions)
		Total Allocation (from Start to End Date)	Planned Spending for 2012–13
Financial Intelligence Program	Financial Intelligence Program		24.0
Compliance Program	Compliance Program		24.0
Total		403.6	48.0

Expected results by program:

Financial Intelligence Program

The Financial Transactions and Reports Analysis Centre of Canada’s (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 Anti-Money Laundering and Anti-Terrorist Financing Regime.

In 2012–13, 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 will strive to disrupt the ability of criminals and terrorist groups that seek to abuse Canada’s financial system while reducing the profit incentive of organized crime.

Compliance Program

As part of Canada’s Anti-Money Laundering and Anti-Terrorist Financing 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 Proceeds of Crime (Money Laundering) and Terrorist Financing Act and related regulations, which include obligations for reporting, record keeping, identity verification and other requirements.

For 2012–13, FINTRAC will continue to use a risk-based approach to ensure that non-compliance with legislative obligations among reporting entities is detected and addressed through reporting and compliance assessments, as well as ensuring that reporting entities receive timely and accurate responses to their inquiries for information.

Federal Partner: Royal Canadian Mounted Police

Federal Partner Program Activity	Names of Programs for Federal Partners	($ millions)
		Total Allocation (from Start to End Date)	Planned Spending for 2012–13
Federal policing	Money Laundering Units	87.2	7.0
	Anti-Terrorist Financing Units Regime	37.6	5.0
Public Works and Government Services Canada accommodations		3.9	0.6
Total		128.7	12.6

Expected results by program:

Money Laundering Units

In 2012, the Royal Canadian Mounted Police will realign its Anti-Money Laundering Teams to high-risk locations identified by national threat assessments. These realigned resources will be based in Ottawa, Calgary, Montreal, Vancouver and Toronto and will use financial criminal intelligence to initiate, based on priority, major projects and investigations.

Anti-Terrorist Financing Units

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 Financial Action Task Force and international law-enforcement working groups on terrorist financing.

Federal Partner: Canada Revenue Agency

Federal Partner Program Activity	Names of Programs for Federal Partners	($ millions)
		Total Allocation (from Start to End Date)	Planned Spending for 2012–13
Special Enforcement Program (SEP)	Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime	28.2	2.2
Charities – Public Safety and Anti-Terrorism	Combatting Terrorist Resourcing Through Charities	20.5	4.4
Total		48.7	6.6

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 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 2012–13, the Special Enforcement Program (SEP) will continue to process all disclosures from FINTRAC on a priority basis. The SEP 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 fact that the number of referrals continues to increase, the number of audits SEP can complete in 2012–13 may be impacted. These factors will 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

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 Proceeds of Crime (Money Laundering) and Terrorist Financing Act 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 2011–12, the CRA will continue to consolidate its capacity to identify and respond to cases involving possible links to terrorism by implementing new systems to support decisions, refining risk management tools, developing a privacy management framework and bringing regulatory actions to the attention of Canadians.

Federal Partner: Canada Border Services Agency

Federal Partner Program Activity	Names of Programs for Federal Partners	($ millions)
		Total Allocation (from Start to End Date)	Planned Spending for 2012–13
Risk assessment	Anti-Money Laundering and Anti-Terrorist Financing Regime		1.5
Admissibility determination	Anti-Money Laundering and Anti-Terrorist Financing Regime		4.6
Internal services	Anti-Money Laundering and Anti-Terrorist Financing Regime		1.6
Total		89.8	7.7

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 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 that have not been reported and that 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 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.

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 2012–13
$698.1 million†	$77.6 million

† 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): Non applicable

Contact information:

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