Canada’s financial intelligence unit: FINTRAC
| DOI | https://doi.org/10.1108/JMLC-10-2019-0079 |
| Pages | 297-307 |
| Published date | 06 May 2020 |
| Date | 06 May 2020 |
| Author | Jeffrey R. Simser |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
Canada’sfinancial intelligence
unit: FINTRAC
Jeffrey R. Simser
Ministry of the Attorney General, Toronto, Canada
Abstract
Purpose –International bodies, such as the Financial Action Task Force , have mandated the use of
financial intelligenceunits (FIU) to address organized crimeand money laundering. The purpose of this paper
is to examine Canada’s FIU, the FinancialTransactions and Reports Analysis Centre of Canada(FINTRAC),
and exploreits current effectiveness and future challenges.
Design/methodology/approach –This paper examines FIUs in general and then looks more
specificallyat Canada’s FIU, its policy and legislative basis as well as futurechallenges for the FIU.
Findings –The challenge money laundering poses to society is a mirror of the challenge that organized
crime poses: a test of the values and the importance of rule of law. The FIU is an important mechanismto
address this challengegenerally, and there are importantchanges in the environment that must be addressed
if the future policyobjectives of the FIU are to be met.
Research limitations/implications –Some of the policy nostrums thatare baked into the anti-money
laundering system, such as placement, layering and integration, need to be revisited and researched to
incorporatechanges in the licit and illicit marketplaces.
Practical implications –Financialinstitutions and other intermediaries must comply with domesticanti-
money laundering laws.Compliance is always contextual, and this paper will outline the role of the regulator
and the environmentalchallenges that need to be met.
Social implications –Effectively addressing money laundering and organized crime is critical to the
maintenanceof rule of law and the protection of the financial system.
Originality/value –This is a brief but very fulsome review of Canada’sFIU, FINTRAC, which captures
broader challenges in addressing money laundering, economic crime and regulatory systems designed to
protect rule of law and theintegrity of the financial system. The paper not only examinesthe current state of
the FIU but also exploreschallenges on the horizon.
Keywords AML, Financial intelligence unit, Money laundering, Canada, FINTRAC,
Organized crime
Paper type Technical paper
Canada’s problem with money laundering is simply a mirror of its problem with organized crime.
Virtually all organized crime is profit driven and therefore gives rise to money, generally cash,
which must then be returned to the legitimate financial system in order to be used to buy
additional product or taken as profit(
German, 2019).
Canada’s problem with money laundering has been robustlychronicled by Dr German in a
series of reports commissioned by theAttorney General of British Columbia. Those reports
survey an environment that transnational organized crime groups have been able to
leverage and benefit from, enabling significant illicit financial flows through a series of
alliances that include, amongst others, Mexican drug cartels, outlaw motorcycle gangs,
underground bankers and Chinese nationals avoiding currency and export controls.Money
is the “golden thread”that binds all of these alliances. Organized crime is a sophisticated
illicit business that seeks to maximize profit and minimize risk. Canada is an inviting
environment. We have stable financial institutions, ready access to international markets
Canada’s
financial
intelligence
unit
297
Journalof Money Laundering
Control
Vol.23 No. 2, 2020
pp. 297-307
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-10-2019-0079
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