Opening Remarks by Barry MacKillop, Deputy Director of Intelligence, Financial Transactions and Reports Analysis Centre of Canada at the House of Commons Finance Committee Parliamentary Review of the Emergencies Act
From: Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
February 24, 2022
Check Against Delivery
Thank you, Mr. Chair, for inviting FINTRAC to participate in your review of the Emergencies Act, which was revoked by the federal government yesterday afternoon. I am joined today by Donna Achimov, FINTRAC's Chief Compliance Officer.
As committee members know, FINTRAC is Canada's financial intelligence unit and anti-money laundering and anti-terrorist financing regulator. We are responsible for ensuring compliance of more than 24,000 businesses that have requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, including financial institutions, casinos, money services businesses and others.
FINTRAC has a robust, risk-based approach, Compliance program in place to ensure that businesses fulfill their requirements such as identifying clients, keeping records and reporting certain types of financial transactions, including international electronic funds transfers, large cash transactions, large virtual currency transactions and suspicious transactions.
With the reporting that we receive from businesses subject to the Act, and when appropriate thresholds are met, FINTRAC provides financial intelligence to Canada's police, law enforcement and national security agencies in support of their money laundering and terrorist financing investigations.
Our financial intelligence disclosures are often based on hundreds or even thousands of financial transactions. These disclosures may show links between individuals and businesses that have not been identified in an investigation, and may help investigators refine the scope of their cases or shift their sights to different targets. A disclosure can pertain to an individual or a wider criminal network, and can also be used by police and law enforcement to put together affidavits to obtain search warrants and production orders.
In total last year, FINTRAC provided more than 2,000 disclosures of actionable financial intelligence in support of investigations related to money laundering, terrorist activity financing and threats to the security of Canada. Since becoming operational in 2001, the Centre has provided more than 22,000 financial intelligence disclosures to Canada's police, law enforcement and national security agencies.
In 2020–21, our financial intelligence contributed to 376 major, resource intensive investigations, and many hundreds of other individual investigations at the municipal, provincial and federal levels across the country.
These agencies continue to seek our financial intelligence in record numbers. FINTRAC received 2,109 voluntary information records from Canada's police, law enforcement and national security agencies last year. These records contain information on alleged criminals and terrorist financiers and are often the starting point for our analysis and the financial intelligence that we are able to generate and disclose.
Many of the recipients of our disclosures have told us that they will not start a major project-level investigation without seeking out our financial intelligence.
Implementation of the Emergencies Economic Measures Order
Under the Emergency Economic Measures Order, certain businesses – including financial entities, money services businesses, crowdfunding platforms and payment service providers – were required to take specific actions in relation to the financial activity of individuals that were engaged in the blockades as laid out in the Emergency Measures Regulations.
For example, crowdfunding platforms and payment service providers were required to register with FINTRAC when they were in possession or control of property that was owned, held, or controlled by an individual or entity that was engaged in an activity that was prohibited in the Emergency Measures Regulations.
Following the invocation of the Emergencies Act, a number of crowdfunding platforms and/or payment service providers did begin the registration process with FINTRAC. This has now been halted with the revocation of the Emergencies Act.
Crowdfunding platforms and payment service providers that were required to register with FINTRAC were also required to report suspicious transaction reports, large cash transaction reports, international electronic funds transfer reports, and large virtual currency transaction reports when thresholds set out in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its Regulations were met. This, too, has been halted with the revocation of the Emergencies Act.
As a financial intelligence unit, and under our legislation, we cannot speak to the reporting that we receive from businesses or the financial intelligence that we provide to Canada's police, law enforcement and national security agencies.
Mr. Chair, I want to be very clear about FINTRAC's mandate. As one of 13 federal departments and agencies that play a key role in Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime, FINTRAC was established as an administrative financial intelligence unit and not a law enforcement or investigative agency.
We do not have the authority to monitor or track financial transactions in real time, freeze or seize funds, ask any entity to freeze or seize funds, or cancel or delay financial transactions.
This was done deliberately by the Parliament of Canada to ensure that we would have access to the information needed to support the money laundering and terrorist financing investigations of Canada's police, law enforcement and national security agencies, while protecting the privacy of Canadians.
This did not change under the Emergencies Act or the Emergency Economic Measures Order.
Mr. Chair, we are committed to working with Canadian businesses and our domestic and international partners to protect the safety of Canadians and integrity of Canada's financial system.
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