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SECTION II: ANALYSIS OF PROGRAM ACTIVITIES BY STRATEGIC OUTCOME

Strategic Outcome

Financial intelligence that contributes to the detection and deterrence of money laundering and terrorist activity financing in Canada and abroad.

Program Activity by Strategic Outcome

Program Activity: Collection, Analysis and Dissemination of Financial Information

2008-09 Financial Resources ($ millions)			2008-09 Human Resources (FTEs)
Planned Spending	Total Authorities	Actual Spending	Planned	Actual	Difference
47.1	48.3	43.0	275	263	(12)

Expected Results	Performance Indicators	Performance Status	Performance Summary
Law enforcement, intelligence agencies and prosecutors received timely and relevant tactical and strategic financial intelligence useful for further actions in investigations and other actions	Satisfaction expressed by law enforcement and partners with the usefulness of case disclosures and strategic information products	Met All	Law enforcement and security partners have confirmed that FINTRAC's products help in their investigations by identifying individuals or groups of individuals, known and often unknown to investigators, and help to link together money and suspected crimes. During 2008-2009, FINTRAC focused on strengthening relationships with key disclosure recipients. The more than 140 case disclosures that FINTRAC made to the Canada Revenue Agency reflect its increasingly effective ties with that agency. These disclosures are significant, because they concerned activities that involve both suspected money laundering/terrorist financing and income tax-related offences such as tax evasion or tax fraud.
Reporting entities are in compliance with the PCMLTFA and related regulations	Level of compliance by reporting entities with PCMLTFA	Met All	FINTRAC employs a number of tools and approaches in its efforts to inform and raise the awareness amongst reporting entities of their obligations. This year, outreach to reporting entities continued with a particular focus on providing guidance to the sectors that were recently brought into the regime. FINTRAC conducted over 500 outreach meetings, reaching more than 20,000 individuals, and provided feedback to reporting entities and associations representing all sectors within the ambit of the PCMLTFA. In addition, FINTRAC also responded to over 5,000 calls from reporting entities for assistance on compliance obligations, a 40% increase from the previous year. Approximately 500 of the calls related to questions of a more complex nature, requiring a higher level of research and interpretation prior to providing a response. FINTRAC also conducted an increased number of examinations in all reporting entity sectors. In 2008-09, FINTRAC conducted over 450 such examinations, representing a greater than 60% increase over the previous year. The number of FINTRAC non-compliance disclosures to law enforcement also increased significantly.

Performance Analysis - Collection, Analysis and Dissemination of Financial Information

Deliver timely and high quality financial intelligence to law enforcement, security and intelligence agencies, and foreign financial intelligence units.

The production and disclosure of timely and relevant financial intelligence is central to the achievement of the Centre's strategic outcome. It is of the utmost importance that tactical intelligence produced by the Centre enhance the capacity of law enforcement, national security agencies and foreign financial intelligence units to detect and deter money laundering, terrorist activity financing and other threats to the security of Canada.

In 2008-2009, FINTRAC significantly increased its production of case disclosures of financial information. During that period, the Centre made 556 case disclosures, of which 474 were associated with money laundering, 52 with terrorist financing and other threats to Canada's safety and security, and 30 with associations to both money laundering and terrorist financing.

Distribution of Disclosure Recipients in 2008-09

The percentages in this chart do not add up to 100% because FINTRAC disclosures are often destined to more than one recipient.

During the year, 68 per cent of FINTRAC's case disclosures were delivered to the RCMP, while the others were sent to various law enforcement and partner agencies, as well as to foreign financial intelligence units. The most significant change from 2007‑08 is the increase in the number of case disclosures provided to the Canada Revenue Agency (27 per cent), and to the Canada Border Services Agency (14 per cent). In 2007‑08, only five per cent of the disclosures were provided to these two agencies, together with Communications Security Establishment Canada.

The 2006 legislative amendments to the PCMLTFA expanded the scope of the information that can be included in FINTRAC's case disclosures. The additional designated information allowed the Centre to provide its partners with even more comprehensive financial intelligence that was increasingly helpful in initiating and supporting investigations.

This year, FINTRAC participated in an intensive international investigation of the cross-border movement of monetary instruments. During the course of this operation, FINTRAC's assistance was sought to provide "real time" tactical financial intelligence. During the three-day operation, authorities from several countries worked together to detect the illegal movement of funds, targeting cash couriers and examining hundreds of flights at multiple international airports over a three-day period.

Law enforcement agencies from the G-8 countries that were involved in this unprecedented multilateral cash courier operation netted more than $3.5 million dollars in 81 cash seizures and detected another $4.2 million in undeclared currency at ports of entry around the world.

Ensure compliance with the PCMLTFA.

FINTRAC utilizes various methods and tools in its efforts to inform and raise awareness amongst reporting entities of their obligations under the PCMLTFA. In 2008-09, FINTRAC outreach to reporting entities primarily focused on those reporting entity sectors that were new to the regime. Over 500 presentations were conducted that reached more than 20,000 individuals to provide outreach and feedback to all reporting entity sectors and related associations. Furthermore, FINTRAC responded to over 5,000 calls from reporting entities on their legislative obligations, a 40% increase from previous years. These calls led to a significant increase in the number of complex policy interpretations FINTRAC provided in 2008-09.

From an enforcement perspective, the number of compliance examinations that were conducted by the Centre increased in all reporting entity sectors. In 2008-09, 450 such examinations were conducted, which represents more than a 60% increase from 2007-08. There was also a significant increase in the number of disclosures provided to law enforcement agencies by FINTRAC regarding non-compliance with the PCMLTFA.

FINTRAC has enhanced its detection and deterrence capacity, as well as its compliance enforcement options, as a result of the 2006 legislative amendments and related regulations. Examples include the creation of a registry for money services businesses (MSBs), the establishment of an administrative monetary penalties regime, enhanced customer due diligence measures and the addition of new sectors with record-keeping and/or reporting obligations.

As of June 23, 2008, MSBs are legally obligated to register with FINTRAC. The Centre's MSB registry, and the new MSB registration web site, have been publicly available since that date. In 2008-09, 803 MSBs registered with FINTRAC, with approximately 21,000 agents and locations. Consequently, outreach activities directed to that sector were intensified.

Beginning on December 30, 2008, FINTRAC received authorization to impose civil penalties on reporting entities that have been found to be non-compliant with the requirements of the PCMLTFA and the associated regulations. The program required alterations to compliance and finance administration processes, as well as changes to the Centre's policies and procedures. New and updated compliance and communication tools made reporting entities aware of the AMP program and of the review and appeal process available to reporting entities that receive an AMP.

Disseminate strategic information on money laundering and terrorist activity financing to partners, stakeholders, and the general public.

FINTRAC has a legislated mandate to enhance public awareness and understanding of matters related to money laundering, most specifically with reporting entities covered by the PCMLTFA. To raise awareness of money laundering and terrorist activity financing and help alert Canadians to the threat posed by these activities, during 2008-09 FINTRAC undertook a number of activities including:

• Publishing and disseminating an Annual Report to Parliament;
• Publishing articles in trade journals and newsletters;
• Publishing pamphlets and other printed material for distribution to reporting entities and their clients; and
• Operating a Web site and a call centre to provide information to reporting entities and the public.

A key achievement in 2008-09, was the publication of a first-ever study on money laundering and terrorist financing typologies and trends in Canadian banking. This work was done in collaboration with Canada's five major banks.

FINTRAC also looked at its information holdings in relation to a country with a reputation for harmful bank secrecy practices. FINTRAC communicated to select federal partners that individuals and entities in Canada seemed to take opportunity of the country's harmful bank secrecy practices to engage in financial transactions indicative of money laundering or large-scale tax evasion.

Lessons Learned

During 2008 FINTRAC engaged the services of independent experts to provide insight and advice on the Centre's intelligence products, financial resources, and regional operations and compliance. As a result of these reviews, FINTRAC re-organized and streamlined certain operational functions, improved its budgeting process and completed a strategic planning process to focus and prioritize its activities and to better align its efforts with the needs of partners.

FINTRAC's new three-year Strategic Plan (2009-2012) is the result of an extensive consultative process, involving input from all staff and many key domestic partners and international financial intelligence units. Each of these groups provided FINTRAC with valuable insights into its role, strengths, challenges and business opportunities.

Based on these consultations, FINTRAC's senior management arrived at a new Mission statement and Vision and established six Strategic Priorities that form the Centre's change agenda for the road ahead. A copy of FINTRAC's Strategic Plan can be found at: http://www.fintrac-canafe.gc.ca/publications/reports-rapports-eng.asp. FINTRAC will report on the results achieved against these commitments beginning with its 2009-10 Departmental Performance Report.

Program Activity: Internal Services

2008-09 Financial Resources ($ millions)			2008-09 Human Resources (FTEs)
Planned Spending	Total Authorities	Actual Spending	Planned	Actual	Difference
8.3	8.5	7.6	49	46	(3)

Performance Analysis - Internal Services

Human Resources

FINTRAC attaches great importance to providing a healthy, stimulating working environment. In 2008-09, the Centre invested in learning and development opportunities for employees, provided leadership training to a number of executives, and strengthened its performance management process to better align individual efforts with organizational priorities.

Champions were appointed to the Official Languages, Employment Equity and Diversity, Values and Ethics, and Awards and Recognition portfolios to reinforce these key programs. Reflecting the Centre's commitment to Canada's two official languages, FINTRAC made a significant effort to assist its executives in meeting the language requirements of their positions. Both employees and managers have been provided with sessions on maintaining a respectful workplace, on change management, and on values and ethics. The 2007-08 Annual Report on the Operation of the Canadian Multiculturalism Act, which was tabled in Parliament on February 5, 2009, highlights FINTRAC's efforts regarding its co-op student program and outreach strategy to communicate the changes related to the 2006 legislative amendments to the PCMLTFA.

FINTRAC encouraged its employees to take part in the 2008 Public Service Employee Survey, and an impressive 89.6% of them — the third highest percentage of all government departments — did so. The Centre also launched a series of workshops designed to help employees balance the challenges of work and personal life.

Business Continuity Planning

In 2008-2009, FINTRAC continued its work on the ongoing maintenance of business continuity plans (BCP) as part of the BCP Program. The Centre also continued to work on the Disaster Recovery Plan which will allow the Centre to reinstate its IT systems and key activities in the event of a serious unplanned outage.

Administrative Services

FINTRAC worked to excel in the provision of administrative services. In 2008-2009, the Centre continued implementation of its integrated facilities plan to ensure that the Centre's facilities meet security and employee requirements and contribute to organizational effectiveness.

Benefits for Canadians

FINTRAC is an essential component of the community of organizations that combat organized crime and terrorism under Canada's anti-money laundering and anti-terrorist financing (AML/ATF) regime. The Centre's role is to facilitate the detection and deterrence of money laundering and terrorist activity financing in Canada and abroad by analyzing reported transactions and other information, and making case disclosures of financial intelligence to the appropriate law enforcement agency, security and intelligence agency, or foreign financial intelligence unit, when there are reasonable grounds for suspicion of relevance to the investigation or prosecution of money laundering or terrorist activity financing offences.

By ensuring the compliance of financial institutions and other reporting entities with their obligations under the PCMLTFA, the Centre helps to create a formidable deterrent to those who would use legitimate financial channels to launder money or to finance terrorism. In Canada, banks and other financial services businesses maintain internal compliance regimes that ensure that the trail of financial transactions can be followed, and that law enforcement agencies can effectively pursue cases of suspected money laundering and terrorist activity financing, thereby strengthening Canada's capacity to detect and deter money laundering and terrorist financing.

Money laundering and terrorist activity financing are transnational in nature, necessitating the participation of all countries for their successful detection and deterrence. FINTRAC's work with international bodies such as the Financial Action Task Force and the Egmont Group contributes to the development of international AML/ATF policies and standards, and the promotion of operational cooperation among financial intelligence units. The operational links the Centre has forged with other FIUs throughout the world are a vital part of FINTRAC's contribution to the domestic and international fight against terrorism, money laundering and organized crime.

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