Canada: Cooperation between Regulators and Law Enforcement
| DOI | https://doi.org/10.1108/eb025914 |
| Pages | 376-385 |
| Published date | 01 February 1999 |
| Date | 01 February 1999 |
| Author | Daniel P. Murphy |
| Subject Matter | Accounting & finance |
Journal of Financial Crime — Vol. 6 No. 4 — International
INTERNATIONAL
Canada: Cooperation between Regulators and Law
Enforcement
Daniel P. Murphy
'The fight against financial crime is one of the
major challenges of our times. We emphasise
that, as both financial services and crime become
increasingly globalised, this challenge can only be
met if all major financial centres work together.
Effective cooperation between financial regulators
and law enforcement authorities at the inter-
national level is an essential element of
this...1
In May 1998 the Finance Ministers of the G7 leading
industrialised democracies met in London to prepare
for the 15th—17th May, 1998 Birmingham Summit.
These ministers continued the work that had devel-
oped out of other summits. In this paper there is no
need to review all of the many achievements from
earlier summits. It is sufficient to note that as the
Cold War wound down economic and other con-
cerns occupied the attention of the summit leaders.
The problem of crime has assumed greater impor-
tance in the summit discussions. This has had a posi-
tive impact in law enforcement.
Crime has been seen as a global issue of concern at
several summits. This concern has achieved signifi-
cant results.2 One issue that has developed out of
the summit process is the recognition of the need to
foster cooperation between financial regulators and
criminal investigators. The commitment to greater
regulator/law enforcement cooperation has grown
out of the last four summit meetings. It was also an
important point for discussions in the many pre-
summit meetings of officials undertaken to prepare
for the Birmingham Summit.
This regulatory/law enforcement cooperation issue
arose at the 1996 Halifax Summit, where the partici-
pants made a commitment to improve international
communication between financial regulators and
law enforcement agencies in cases involving financial
fraud. The 1997 Denver Economic Statement called
on officials to report and make recommendations
on international cooperation in cases involving
serious financial crime and regulatory abuse.3 G7
experts subsequently reviewed the issue and, while
they did not identify any serious gaps in domestic
and international sharing arrangements, pursuant to
the Lyon Summit they left the door open to further
dialogue.
The Denver and Birmingham Summits' work is
the precursor to the suggestion that nations consider
how financial regulators can more effectively work
with law enforcement. This is an interesting develop-
ment. We need to remember that the result of the
recommendation from various summits affects
many other nations. The work of the FATF and
the various regional bodies that have developed out
of the FATF illustrate this fact. If the summit state-
ment on financial crime is aggressively advanced
and picked up within the work of the Financial
Action Task Force many nations will be called
upon to undertake similar work.
In this paper this issue as it relates to Canadian law
on search and seizure will be briefly examined. There
will be no detailed review of a financial regulator's
statutory authority to collect information or their
restrictions against the disclosure of information
they collect in the course of their activities. Others
can deal with those issues. This is a larger undertaking
and restrictions on time and space preclude such a
review.4 Canadian national privacy law will be dis-
cussed briefly, but again, this issue is left for another
day.
Throughout the paper the term 'law enforcement'
is used to mean criminal enforcement agencies. The
basic assumption is that the initial justification for
the regulator's collection of information is found in
the regulatory context that is relevant to that regula-
tor. The context shifts when law enforcement is
allowed to obtain information held by regulators.
The shift may be less significant when the dissemina-
tion of the regulator's information is undertaken,
without instigation by law enforcement, and left to
Page 376
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