Monday, July 15, 2019

Ottawa amends law to improve money-laundering prosecutions

Ottawa amends law to improve money-laundering prosecutions, more recommendations await implementation

Postmedia created a searchable database this spring that is being updated periodically to track governments’ progress on implementing anti-money laundering recommendations
Cash seized in Vancouver police investigation Project Trunkline into drug trafficking that overlapped with money-laundering investigation E-Priate by the RCMP. TBA / PNG

Criminal Code amendments to make it easier to prove money laundering are now in force in Canada.

The change to the Criminal Code offence of money laundering adds recklessness, a change that became law at the end of June.

This amendment criminalizes the activity of moving money on behalf of another person or organization while being aware that there is a risk that this activity could be money laundering and continuing with that activity in spite of the risk, officials in the federal Finance Department said in a written statement.

It lowers the threshold from having to prove that the offence was connected to an illegal activity, such as drug trafficking.

“This change modernizes Canada’s money laundering criminal offences to be consistent with key allies (e.g., U.K. and Australia), and provides an additional tool to disrupt and more effectively investigate and prosecute money laundering, particularly when dealing with sophisticated actors such as professional money launderers,” Finance Department spokesman Greg Sommerville said in a written response to Postmedia questions.

The change comes as the B.C. government has also ticked off another six recommendations from one of the independent reports it commissioned to combat money laundering.

Among those changes is that gambling regulation officers have a 24/7 presence in major Lower Mainland casinos.

But while initial steps are being taken to create a more robust anti-money-laundering system and ensure a greater chance of successful prosecutions, many more anti-money laundering recommendations produced by the B.C. and Canadian government in the past 18 months await implementation.

Just 19 of more than 120 recommendations — from three independent B.C. reports and a federal parliamentary report — have been completed.

Postmedia created a searchable database this spring that is being updated periodically to track both governments’ progress on implementing the recommendations.

“Canada has fallen so far behind for so many years, we’re playing catch-up,” said James Cohen, executive director of Transparency International Canada, an organization that advocates for stronger anti-money laundering laws and practices. 

The Criminal Code change, for example, may not satisfy a parliamentary committee recommendation last year that called for a range of changes to better facilitate Chinese triad money laundering investigations and that other resources be made available to police and prosecutors to pursue cases.

The federal government also recently made several changes to its anti-money-laundering regulations to regulate businesses dealing in virtual currency, another parliamentary committee recommendation. As part of that package, Ottawa also made changes to due diligence and beneficial ownership reporting requirements.

B.C. Attorney General David Eby’s office expects more anti-money laundering recommendations will be fulfilled shortly, but that it will take until 2022 to deal with all recommendations from the first anti-money laundering report on casinos.

His office is reviewing a second anti-money laundering report on luxury cars and real estate, said ministry spokesman Ryan Panton.

Both reports were written by a former RCMP deputy commissioner, Peter German. A third report by a Simon Fraser University professor, Maureen Maloney, on money laundering in real estate is being reviewed by B.C. Finance Ministry officials.

Money laundering has been under the spotlight in British Columbia, a result of revelations from a Postmedia investigation in 2017 that found potentially millions of dollars were being laundered through Lower Mainland casinos.

Postmedia reported in February that money-laundering prosecutions were rare and difficult in B.C. Several police investigations with ties to money laundering since 2015 had resulted in at least 17 arrests, but no charges.

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