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Good morning. I would like to thank the Committee for the opportunity to speak to the study of Bill C‑12 - An Act respecting certain measures relating to the security of Canada’s borders and the integrity of the Canadian immigration system and respecting other related security measures ("Bill C‑12" or "the Bill").
My name is Hartland Elcock. I am an Assistant General Counsel and Vice President with the Canadian Bankers Association. I am pleased to be here today to speak to Bill C‑12.
The CBA is the voice of more than 60 banks operating in Canada, employing more than 300,000 Canadians, and helping to drive Canada’s economic growth and prosperity.
Our members take the fight against money laundering, terrorist financing, and sanctions evasion seriously. Among the most active reporting entities in Canada’s AML Regime, they devote significant resources to their AML programs, including their internal controls and employee training. Much of this investment focuses on continuous improvements to address the shifting landscape of compliance requirements and the evolving nature of risk. Their goal is to effectively deter, detect and report suspicious activity and to mitigate money laundering, terrorist financing, and sanctions evasion.
As major stakeholders within Canada’s AML Regime, our members’ participation moves beyond compliance. Banks play a leadership role in Public‑Private partnership ("PPP") projects with FINTRAC. One of these PPPs is Project Guardian, which is focused on identifying transactions or attempted transactions where there are reasonable grounds to suspect money laundering related to the fentanyl trafficking. This project led to FINTRAC operational alerts that highlight indicators of suspicious transactions for all reporting entities.
The CBA and its members also actively participate in ongoing enhancements to Canada’s AML Regime. For example, the CBA and members have long sat on the federal Advisory Committee on Money Laundering and Terrorist Financing. We have also been advocates supporting comprehensive beneficial ownership transparency in Canada and increased private‑to‑private information sharing for AML and ATF purposes. These changes are a step forward for Canada’s AML Regime.
In alignment with our members’ position and investment in Canada’s AML Regime, we suggest targeted changes to Bill C‑12 (which do not change the substance of it) and new regulations to help the Bill achieve its policy goals, while mitigating adverse outcomes.
More specifically, the CBA suggests the following targeted changes to provide clarity to Bill C‑12’s proposed amendments to the Regime that will reinforce a risk‑based approach, preserve the efficacy of recent enhancements to the AML Regime (e.g., private‑to‑private information sharing), and encourage the transparent and predictable application of new compliance and supervision powers:
- Defer the coming into force of the increased administrative monetary penalties (AMPs) until regulatory criteria are established to ensure their transparent and predictable application, reserving the highest AMPs for egregious or systemic issues
- Add a regulation making power to establish and provide certainty on the government’s expectations and its criteria for assessing if a compliance program is reasonably designed, risk‑based, and effective, in alignment with fundamental justice expectations under the Canadian Charter of Rights and Freedoms (Charter)
- Remove the one‑year limit to extending a compliance remediation agreement to prevent the arbitrary application of significant additional fines (e.g., where a delay is outside the control of a reporting entity)
- Prohibit the opening of accounts under "obviously fictitious names", based on a clear legislative definition of what constitutes an "obviously fictitious name"
- Exempt banks from mandatory FINTRAC enrollment due to existing oversight
- Amend the proposed false information offense to reflect "intent to deceive" (consistent with other similar provisions in the Criminal Code) to avoid triggering the offence when providing information (or non‑provision) is done in good faith
- Clarify that, like a violation, an offence alleged to have been committed before the coming into force of the proposed new provisions in Bill C‑12 will not be subject to them
Adopting the technical changes to Bill C-12 will help ensure a fit‑for‑purpose, risk‑based AML Regime that can more effectively target and keep pace with evolving risks. This will strengthen our collective ability to protect the interests of all Canadians.
Thank you again.