Canada: Money Laundering Update

Date01 January 1997
Published date01 January 1997
DOIhttps://doi.org/10.1108/eb025793
Pages265-268
AuthorLionel Smith
Subject MatterAccounting & finance
Journal of Financial Crime Vol. 4 No. 3 International
Canada: Money Laundering Update
Lionel Smith
In Canada, money laundering has been an offence
since 1989. Section 462.31(1) of the Criminal
Code1 provides:
'Everyone commits an offence who uses, trans-
fers the possession of, sends or delivers to any
person or place, transports, transmits, alters, dis-
poses of or otherwise deals with, in any manner
and by any means, any property or any proceeds
of any property with intent to conceal or convert
that property or those proceeds and knowing
that all or a part of that property or of those
proceeds was obtained directly or indirectly as a
result of
(a) the commission in Canada of an enterprise
crime offence or a designated drug offence; or
(b) an act or omission anywhere that, if it had
occurred in Canada, would have constituted an
enterprise crime offence or a designated drug
offence.'
'Enterprise crime offence' and 'designated drug
offence' are defined in s.
462.3,
each by reference
to a list of offences. Enterprise crime offences arc
offences under the Criminal Code, and designated
drug offences arc offences under the Narcotic
Control Act2 and the Food and Drugs Act.3 This
money-laundering provision is essentially repeated
in s. 19.2(1) of the Narcotic Control Act, and in s.
44.3(1) of the Food and Drugs Act, but in those
Acts it is confined to the laundering of proceeds
derived from the commission of offences created
by those acts; these are basically the same offences
as those which arc 'designated drug offences' in
the Criminal Code provision. For example, s.
19.2(1) of the Narcotic Control Act applies to pro-
ceeds obtained either from trafficking in narcotics,
from importing or exporting narcotics into or out
of Canada, or from the cultivation of certain nar-
cotics.
The reason for this duplication lies in the
system of the administration of criminal justice.
Although legislative authority for criminal law (and
thus for all three statutes) lies with the federal
government, it is provincial prosecutors who
generally handle Criminal Code offences; federal
prosecutors handle drug offences under the other
two Acts. Hence, those acts must repeat the laun-
dering offences to allow them to be prosecuted by
federal prosecutors..
In addition to these offences relating specifically
to laundering, all three acts also have offences
relating to the mere possession (as opposed to the
laundering) of proceeds of
crime.
Section 354(1) of
the Criminal Code provides:4
'Everyone commits an offence who has in his
possession any property or thing or any proceeds
of any property or thing knowing that all or part
of the property or thing or of the proceeds was
obtained by or derived directly or indirectly
from
(a) the commission in Canada of an offence
punishable by indictment; or
(b) an act or omission anywhere that, if it had
occurred in Canada, would have constituted an
offence punishable by indictment.'
Again, the Acts governing drugs have similar pro-
visions, worded more narrowly to apply only to
property which is the proceeds of offences com-
mitted under those Acts. These provisions are s.
19.1(1) of the Narcotic Control Act, and s. 44.2(1)
of the Food and Drugs Act. Although the money-
laundering legislation has been in force for several
years now, there have been very few reported cases
decided under it. The purpose of this note is to
outline two recent appellate decisions which have
considered these provisions.
THE MENTAL ELEMENT
R ν Hayes
In R ν Hayes,5 the accused took $300,000 in cash
into a bank and exchanged it for three bank drafts,
each in the amount of $100,000.6 The money was
not his; he was paid $900 by his friend McCully to
perform this transaction on behalf of
a
third party.
Page 265

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