Banks in Canada have a long history in the fight against money laundering. The banking industry was the first industry to voluntarily report suspicious financial transactions to the Royal Canadian Mounted Police (RCMP) long before they were required to do so. The sector strongly supports the federal government’s actions and ongoing plans to strengthen Canada’s anti-money laundering and anti-terrorist financing (AML/ATF) regime
Banks’ efforts to combat money laundering and terrorist financing
The banking industry’s main goal is to help detect and deter money laundering and terrorist financing while protecting the privacy of customers and the integrity of Canada’s banking system.
Banks are subject to federal regulations under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. This requires the banks as well as other reporting entities such as real estate brokers, casinos and money service businesses, to implement client identification, record keeping and compliance regime requirements, and to report suspicious transactions to the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC).
FINTRAC is an independent agency that reports to Canada’s Minister of Finance. FINTRAC analyses the data reported by banks and other reporting entities, and where appropriate, is authorized to disclose financial intelligence to law enforcement agencies.
Compliance regimes are supervised by senior management at the banks as well as by committees of the banks’ Boards of Directors, which are appointed to oversee risk management and regulatory compliance with tax laws, securities laws, and other rules imposed by banking supervisors.
Banks support for recent federal government actions to strengthen the anti-money laundering regime
Banks in Canada have a long history of working in co-operation with the Government of Canada, law enforcement agencies, and other partners to implement effective AML/ATF measures.
The Canadian banking industry recognizes its key role in combating money laundering and terrorist financing and has consistently supported the efforts of the Government of Canada to develop an effective regime.
Banks devote substantial resources to reporting incidents under AML/ATF rules and support provisions that allow for more investigations and prosecutions of money laundering offences. The banking sector is working with the Department of Finance, FINTRAC, law enforcement agencies and prudential regulators on projects to identify, prevent and punish those who violate AML/ATF rules.
Banks support the Government’s recent efforts in creating the Anti-Money Laundering Action, Coordination and Enforcement Team, and to expanding public-private partnership projects to improve the overall efficiency and effectiveness of the system.
Canadian bank practices in other countries
Canadian banks that operate foreign branches or foreign subsidiaries in other countries must implement a compliance program to detect money laundering and terrorist financing similar to what is required in Canada. Banks use their Canadian anti-money laundering regime as a baseline and then overlay local regulations, policies, and procedures to ensure they are compliant with the laws of the countries in which they operate.
More information about Canada’s AML/ATF regime can be found on the FINTRAC website at www.fintrac.gc.ca.