Implementation of the Order in Council re: Avoiding Complicity in Mistreatment by Foreign Entities - 2022 Annual Report

Introduction

On September 4, 2019, the Governor in Council (GIC), on the recommendation of the Minister of Finance, issued Directions for Avoiding Complicity in Mistreatment by Foreign Entities (Directions) to the Director and Chief Executive Officer (CEO) of the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) via an Order in Council (OIC).

The OIC is the result of the Avoiding Complicity in Mistreatment by Foreign Entities Act (ACMFEA), which authorizes the GIC to issue written directions to deputy heads in respect of:

(a) the disclosure of information to any foreign entity^{Footnote 1} that would result in a substantial risk^{Footnote 2} of mistreatment^{Footnote 3} of an individual;
(b) the making of requests to any foreign entity for information that would result in a substantial risk of mistreatment of an individual; and,
(c) the use of information that is likely to have been obtained through the mistreatment of an individual by a foreign entity.

This report is in fulfillment of subsection 7(2) of the ACMFEA, which stipulates that FINTRAC must publish an unclassified report in respect of the implementation of the Directions during the previous calendar year.

Therefore, this is FINTRAC’s fourth report on the application of the Directions.

Information-Sharing Arrangements with Foreign Entities

FINTRAC was established as Canada’s financial intelligence unit (FIU) by its governing legislation, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). Accordingly, FINTRAC is responsible for facilitating the detection, prevention, and deterrence of money laundering and the financing of terrorist activities while ensuring the protection of personal information under its control.

Engaging in international cooperation in the global effort against money laundering and terrorist activity financing through the sharing of information is an important element in FINTRAC’s ability to fulfill its mandate.

Pursuant to the provisions of the PCMLTFA that pertain to the use and exchange of information with other FIUs, FINTRAC shall analyze and assess information it receives, and when certain statutory requirements are met, FINTRAC has the discretionary authority to request particular information from an FIU or disclose particular information to an FIU. The exchange of information with an FIU is possible if FINTRAC has entered into an agreement or arrangement, such as a Memorandum of Understanding (MOU), with the FIU regarding the exchange of such information.

Application of the Directions in 2022

FINTRAC is responsible for determining the level of risk associated with the disclosure of, request for, or use of information to or from a foreign partner and applying the appropriate mitigating measures. Accordingly, FINTRAC’s operational policies and procedures are aligned with the Directions in its information sharing activities.

Interdepartmental Cooperation

To facilitate coordination on the application of the Directions between the Government of Canada (GC) departments and agencies that are implicated by the OIC^{Footnote 4}, the Information Sharing Coordination Group (ISCG) was established, which is chaired by Public Safety Canada. FINTRAC is an active participant in the ISCG and meaningfully contributes to it through consultation and collaboration with its partners, including the Department of Finance Canada.

Human Rights Assessments (HRAs)

In accordance with the Directions, FINTRAC developed a methodology for assessing the human rights records of the countries with which it has an MOU. These HRAs are one of several tools that FINTRAC officials use in their analysis of whether the disclosure of or request for information would result in a substantial risk of mistreatment of an individual by a foreign entity, and whether information is likely to have been obtained as the result of mistreatment of an individual by a foreign entity.

Intelligence Information-Sharing Processes

FINTRAC’s operational policies and procedures maintain alignment with the Directions, with the respect to the use and sharing of information with FIUs. These processes are reviewed on an ongoing basis and updated as required.

In particular, the level at which FINTRAC officials seek authorization to use or share information continue to reflect the Directions. That is, for cases that are assessed by FINTRAC officials as involving either a substantial risk of mistreatment that they are unable to determine whether the risk can be mitigated, or information that is likely to have been obtained through mistreatment, a referral is made to the Director and CEO for determination.

During the reporting period of January 1, 2022 to December 31, 2022, no referral was made to the Director and CEO for determination.

Mitigating Measures

Measures such as the use of caveats or assurances could mitigate the substantial risk of mistreatment in certain situations. Based on the best practices of GC partners, FINTRAC uses caveats, policies, and procedures to mitigate the risk that the disclosure of or request for information to or from an FIU would result in a substantial risk of mistreatment of an individual by a foreign entity.

Likewise to the use of caveats, assurances and related record-keeping provisions are included in operational policies and procedures and are sought by FINTRAC, as needed, from an FIU.

Reporting

In accordance with the ACMFEA, FINTRAC’s implementation of the Directions will be reported to the Minister of Finance, the National Security and Intelligence Committee of Parliamentarians (NSICOP), the National Security and Intelligence Review Agency (NSIRA), and the public on an annual basis.

Training

Awareness and training with respect to the interpretation and application of the Directions commenced in 2019 and remains ongoing.

Conclusion

FINTRAC has worked diligently with both internal and external partners in its application of the Directions, while fulfilling its mandate and responsibilities under the PCMLTFA.

Going forward, FINTRAC will continue to review and strengthen its related policies and procedures as needed. FINTRAC will also continue to provide awareness and training to relevant staff on its application of the Directions, as well as engage with its GC partners through the ISCG.

Footnotes

Footnote 1

“Foreign entities” may include foreign governments, their departments, agencies, and militaries. It may also refer to military coalitions, alliances, and international organizations.

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Footnote 2

“Substantial risk” is a personal, present, and foreseeable risk of mistreatment. In order to be “substantial”, the risk must be real and based on something more than mere theory or speculation. In most cases, the test of a substantial risk of mistreatment will be satisfied when it is more likely than not that there will be mistreatment; however, in some cases, particularly where the risk is of severe harm, the “substantial risk” standard may be satisfied at a lower level of probability.

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Footnote 3

“Mistreatment” means torture or other cruel, inhuman, or degrading treatment or punishment (within the meaning of the Convention Against Torture and Other Cruel, Inhuman or Degrading Treatment or Punishment, signed at New York on December 10, 1984).

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Footnote 4

Canada Border Services Agency, Canada Revenue Agency, Canadian Security Intelligence Service, Communications Security Establishment, Department of Fisheries and Oceans, Department of National Defence and the Canadian Armed Forces, Financial Transactions and Reports Analysis Centre of Canada, Global Affairs Canada, Immigration, Refugees and Citizenship Canada, Public Safety Canada, Royal Canadian Mounted Police, Transport Canada

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Date Modified:: 2023-05-12

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