$10m for money laundering investigations included in government’s plans to combat white collar crime

Minister of Finance Bill Morneau says plans are moving forward, but few specific details were announced

A transparent registry of beneficial ownership of corporations has yet to receive full support among provinces, said Canada’s Minister of Finance Bill Morneau Thursday morning in Vancouver.

Morneau said he met with Canada’s political leaders in the field to discuss ongoing strategies to combat financial crimes, such as money laundering

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“We talked about the importance of following through on the commitments we made at the table in 2017. Those commitments were to seek a way to ensure we have the information around who owns corporations in our country,” he said.

“We also talked about the potential next step of making that information transparent.”

However, “there was no final commitment from all provinces,” he said, noting matters such as regulatory burdens and privacy concerns are being discussed.

Transparency International Canada, an international think tank, claims “Canada is one of the world’s most opaque jurisdictions when it comes to ownership of private companies and trusts,” which are registered by provincial governments.

This has made major real estate sectors, such as Vancouver and Toronto, exposed to money laundering.

This was Morneau’s first visit to B.C. after Premier John Horgan ordered a public inquiry into money laundering, particularly as it relates to the real estate sector.

A government-ordered report on money laundering estimated up to $5 billion a year could be laundered in B.C. real estate. The estimations, however, drew only on a standard formula based on crime rates and GDP. B.C. ranked in the middle of the pack among regions across Canada, and Ontario has now reportedly asked for as much federal police funding as B.C. to combat money laundering.

Minister of Border Security and Organized Crime Reduction Bill Blair joined Morneau at a noon hour press conference alongside B.C. Minister of Finance Carole James and B.C. Attorney General David Eby.

Morneau announced an additional $10 million for the RCMP to conduct money laundering investigations. This is in addition to the new, $24 million Anti-Money Laundering Action, Coordination and Enforcement (ACE) Team the federal government funded for five-years in its 2019 budget last February.

Eby said B.C. has already lined up provincial legislation to assist the feds in combatting financial crimes, such as a beneficial ownership property registry (coming online next year) and greater information sharing of property and tax information.

“At the end of the day we need enforcement,” said Eby, whose government released a report earlier this year that cites the RCMP conceding there are no dedicated police officers actively investigating money laundering in B.C.

Morneau said “crack” investigation teams are needed.

The quartet fielded questions from media for about 20 minutes.

Morneau said the government was at the discussion stage of how to better regulate cryptocurrency transactions, which Morneau describes as an “asset class” that can be moved without disclosures.

Blair said federal officials are discussing with law societies how to better address solicitor-client privileges, which result in financial transactions being hidden from law enforcement.

And, when asked about the fact Canada has no dedicated police for ports, Blair offered no commitments to reverse that policy.

Morneau said universal cash reporting (over $10,000), as like the United States, “may be something we need to address.”

Last but not least, Morneau offered few specifics when asked what his government is doing to ensure regulated banks are following anti-money laundering regulations.

Eby noted he would like to see better follow through on suspicious transaction reports to FINTRAC (The Financial Transactions and Reports Analysis Centre of Canada).

Budget 2019 “proposed to invest $28.6 million over four years, beginning in 2020–21, with $10.5 million per year ongoing to create a multi-disciplinary Trade Fraud and Trade-Based Money Laundering Centre of Expertise.”


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