money laundering regulations | Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime

Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime

FINTRAC is an important member of the group of organizations dedicated to Canada's fight against money laundering and terrorist financing. Each organization has a special relationship with FINTRAC. By the nature of its mandate, the work of the Center is at the beginning of a process that begins with the reporting of information on the financial operations of institutions and intermediaries. Using specialized automated tools, the appropriate staff analyzes information provided and data obtained from other sources to highlight financial intelligence relevant to an investigation or prosecution of a money laundering offense. or terrorist financing or threat to the security of Canada.

Money laundering and terrorist financing cases can be extremely complex, often involving multiple actors involved in transnational and clandestine illicit activities. Surveys often require a lot of time and resources. As a result, the time between FINTRAC's initial release of information and the conclusion of an investigation can be quite lengthy.

FINTRAC's main product is case-specific financial information. When we are satisfied that we have reasonable grounds to suspect that our financial information would be useful for an investigation or prosecution, we pass it on to law enforcement agencies and intelligence agencies. In turn, these agencies conduct the specified investigations and, where appropriate, lay charges against those involved.

In addition, FINTRAC is a signatory to information exchange agreements with foreign FIUs around the world, which allows FINTRAC to provide its counterparts with critical financial information about international fund movements. Conversely, these FIUs can provide us with useful information for our own analyzes.

When establishing that there are reasonable grounds to suspect money-laundering activities, FINTRAC must make a communication of information to the police forces concerned. In turn, these agencies conduct the specified investigations and, where appropriate, lay charges against those involved. Recipients of this information include the RCMP, provincial and municipal police services, CSIS, the CRA and CIC, and the FIUs with whom the Center has signed a Memorandum of Understanding for the exchange of information. .

FINTRAC is also involved in many initiatives that promote international policy collaboration. These initiatives include the Egmont Group, in which FINTRAC shares best practices and other activities designed to strengthen support for FINTRAC's anti-money laundering and anti-terrorist financing regimes.

What is money laundering?

Money laundering is the process of concealing the source of money or property derived from criminal activity. A wide variety of illegal activities are profit-driven, including drug trafficking, smuggling, fraud, extortion and corruption. The importance of these products is considerable - some 590 billion to 1 500 billion US dollars worldwide each year.

Money laundering promotes corruption and destabilizes the economy of vulnerable countries. In addition, it compromises the integrity of legitimate financial institutions and systems and provides organized crime with the funds to undertake other criminal activities. It is a global problem using many specialized techniques. Technical advances in e-commerce, global diversification of financial markets, and new financial products provide further opportunities to recycle proceeds from criminal activity and to hide the flow of money from these activities.

Money laundering techniques, which vary widely and are often very complex, generally take place in three stages:

placement, which involves bringing proceeds of crime into the financial system;
dispersal, which involves converting proceeds of crime into another form and creating a tangle of financial transactions to confuse the audit trail and obscure the origin and ownership of the funds (eg. the purchase and sale of shares, property and properties);
integration, which consists of reintroducing criminal profits into the economy in order to give the funds a legitimate appearance.
FINTRAC's financial intelligence plays a vital role in the fight against money laundering. This financial intelligence is used to facilitate money laundering and terrorist financing investigations in broader criminal investigations where the origin of the alleged proceeds of crime may be related to drug trafficking, fraud, tax evasion, bribery and other criminal offenses. These types of crimes cause casualties, are often violent and cause real harm to society.