ARCHIVED - Financial Transactions and Reports Analysis Centre of Canada - Report

• During the year, the Centre continued to make improvements to its mechanisms for defining, prioritizing and aligning with partners’ intelligence requirements. These enhancements have allowed FINTRAC analysts to better understand and respond to the needs of investigative and intelligence partners and to focus on the cases of highest importance.
• FINTRAC also continued to work with its partners in the security and intelligence community to establish priorities for FINTRAC’s strategic financial intelligence assessments, briefs and reports. As a result, the financial intelligence produced and disseminated by the Centre was often tailored to the needs of specific government policy and decision makers for information about key issues, methods, trends and case studies in money laundering and the financing of terrorism.

• FINTRAC’s compliance program ensures that the Centre receives the quality and quantity of financial information it needs to analyze and disclose on cases of suspected money laundering and terrorist financing. By working with reporting entities to ensure their compliance with PCMLTFA obligations, the Centre’s compliance program also serves as a deterrent for those who would attempt to use Canada’s financial systems for money laundering and terrorism financing purposes.  
• Within the compliance program, examinations continue to be the primary method of compliance assessment. During the year, FINTRAC made a number of enhancements with the aim of increasing compliance within higher risk sectors and key market players in particular. The Centre also developed a financial conglomerate (FINCO) strategy that provides for the regular assessment of the largest financial institutions.
• In 2010-11, FINTRAC also initiated strategic investments to enhance its risk- based compliance program. These investments were made to improve the delivery of enforcement activities as well as activities designed to support and facilitate compliance among reporting entities.

• FINTRAC continues to foster and strengthen its bilateral and multilateral relationships with international partners through the delivery of technical assistance, activities with key international organizations, such as Financial Action Task Force (FATF) and the Egmont Group, and the signing of new MOUs with counterpart financial intelligence units.
• In 2010-11, FINTRAC continued to be actively involved with the Egmont Group of Financial Intelligence Units. During the year, FINTRAC’s Director continued to serve as Vice-Chair of the Egmont Group, and Chair of the Training Working Group (TWG). By undertaking a leadership role in the TWG, FINTRAC aims to leverage the training work being done by the Egmont Group as a means of carrying out FIU related technical assistance to the widest possible number of international partners.
• FINTRAC also broadened its capacity to seek information from foreign FIUs by signing eleven information-sharing MOUs, bringing the total number of MOUs with international tactical partners to 73. FINTRAC will now be able to exchange tactical information about money laundering and terrorist financing with the FIUs of the following countries: Belize, British Virgin Islands, Dominica, Grenada, Macedonia, Malta, the Netherlands Antilles (now the Curacao FIU), Saint Lucia, San Marino, Senegal and Serbia.
• Building on the success of last year’s reporting entity workshop in Toronto, FINTRAC organized a similar event in Montreal in order to provide those on the front lines with feedback on how the information they provide to FINTRAC is utilized in the fight against money laundering and terrorist financing. In addition, the Centre also made a number of presentations focussing on the results of its trends and typologies reports at other conferences attended by various reporting entities. These sessions provided additional feedback and information on how specific sectors are used for money laundering and terrorist financing and supported reporting entities in their training and risk management programs.
• FINTRAC also continues to foster and strengthen its relationships with domestic law enforcement and intelligence partners through initiatives such as continued secondee exchanges, joint efforts to develop and update indicators and newly acquired access to databases maintained for law enforcement and intelligence purposes.

• FINTRAC continues to support the Department of Finance in fulfilling its lead role in managing the policy and legislative direction of Canada’s AML/ATF Regime.
• In 2010-11, FINTRAC provided input for the 10-Year Evaluation of Canada’s Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Regime by working with AML/ATF Regime partners, under the leadership of the Department of Finance, to ensure the evaluators had access to the information, data, and persons necessary to conduct, assess, and report on the AML/ATF Regime. Within the evaluation findings, FINTRAC is portrayed in a positive light, including many positive comments on the Centre’s strategic intelligence work, and its activities both to produce tactical disclosures and ensure compliance.
• For the AML/ATF Regime as a whole, the evaluation report concludes that “Overall, there were improvements in Canada's AML/ATF performance over the past 10 years. The Regime likely contributed to the creation of an environment that is hostile to ML/TF and/or that has been effective in deterring ML/TF. It seems that the Regime has reduced the profitability of crime by deterring ML, and has reduced the likelihood of terrorist activities by deterring TF”. The evaluation report contained three broad recommendations directed at the overall Regime. The Department of Finance is coordinating the follow-up to the recommendations with appropriate contributions from AML/ATF Regime partners.

• In 2010-11, FINTRAC continued to place emphasis on developing a range of tools to improve text and data mining, and geospatial analytical capacities in order to effectively maximize the use of the agency’s data holdings. These improvements to FINTRAC’s suite of analytic tools have led to a number of advancements in the Centre’s procedures, processes and systems, and have allowed the Centre to improve the timeliness of both strategic and tactical research while maintaining a high level of quality and value of the information being provided.
• In addition, the Centre replaced and upgraded its batch reporting system, which is responsible for the receipt of 95% of the agency’s reports. The new solution employed by the Centre is both more reliable, more secure and should provide enough flexibility to accommodate all future business requirements.
• The Centre was also able to take advantage of significant price discounts to replace its two HP Superdomes. The Superdomes are vital to FINTRAC operations as virtually the entire suite of FINTRAC applications run on these servers. FINTRAC had originally purchased the Superdomes in 2001 and 2002 with a normal life expectancy for these servers of approximately eight years. Replacement of these servers offers FINTRAC improved performance and reliability along with lower maintenance costs. The decision to replace the Superdomes in 2010-11 eliminates a sharp increase in infrastructure costs forecast in FINTRAC’s IM/IT evergreening plan for future years.

• FINTRAC strives to be an “employer of choice” with an engaging work environment that encourages excellence, offers competitive salaries and benefits, provides continuous learning and career development opportunities, and demonstrates its commitment to work/life balance. The Centre also endeavours to maintain excellence in all of its corporate policies and practices and to ensure that resources are efficiently aligned with business priorities.
• FINTRAC continues to review and update corporate policies and controls, aligning them with government priorities. The Centre is aligning its Code of Conduct and Ethics with the forthcoming Public Sector Values and Ethics Code.  Focus groups for employees clarified, where necessary, the behavioural indicators associated with its values.
• The Centre also created a senior level Internal Audit and Evaluation Committee (IAEC) to serve as an internal advisory body. The IAEC provides a forum for discussion of issues arising from relevant audits, evaluations and risk assessments.

In 2010-11, FINTRAC disclosed 777 cases of suspected money-laundering, terrorist financing and threats to the security of Canada to law enforcement and security partners. This is a significant increase over the 579 cases disclosed in 2009-10 and the 556 cases disclosed in 2008-09. In 2010-11, the average timeliness of case analysis improved by 18% decreasing from 68 days to 56 days. This was achieved by improved business processes and a greater understanding of partner needs.

The Centre also continued to fulfill the needs of various partners and stakeholders in producing and disseminating a wide range of strategic financial intelligence assessments, briefs and reports. These products served to inform government policy and decision makers, as well as reporting entities about money laundering and terrorist financing issues, methods, indicators and case studies which enabled them to better combat money laundering and terrorist financing. One example during the year was the third report in FINTRAC's Typologies and Trends Report series entitled Money Laundering and Terrorist Financing Trends in Canadian Money Services Businesses (MSBs). This document was published in July 2010 to better enable MSBs and other reporting entities and partners to recognize and combat money laundering and terrorist financing more effectively.

Beginning in 2009-10 and continuing during this fiscal year, FINTRAC has embarked on a compliance strategy that places increased emphasis on compliance enforcement interventions. As a result, the Centre has provided fewer, but more targeted and focused outreach activities and has promoted the self-service tools available on the FINTRAC Web site as an effective approach for reporting entities to find guidance on common examination deficiencies and responses to frequently asked questions in relation to the Act and Regulations.

One of the key outreach events during the year was the November 2010 workshop hosted by FINTRAC in Montreal with the theme "Establishing the Links." This workshop built on the success of a similar event held in Toronto in 2009. More than 100 representatives from the banking, credit union /caisse populaire, insurance, securities and MSB sectors in Quebec and eastern Canada attended the workshop. Presenters from FINTRAC, the RCMP, the Sûreté du Québec and the Public Prosecution Service of Canada spoke to the importance of suspicious transaction reporting, and to the unique contribution of financial intelligence in supporting investigations and prosecutions.

In 2010-11, FINTRAC responded to a total of 4,868 inquiries from calls and emails initiated by reporting entities. This marks an increase of inquiries of 32.5% over last year (3,673 inquiries), and can be explained in part by the Money Services Businesses registration renewals, which started in June 2010.