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I am pleased to present FINTRAC's 2010-2011 Report on Plans and Priorities, an outline of the organization's corporate direction for the coming year.
FINTRAC has seen changes in recent years with the implementation of amendments to our governing legislation, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the development of a three-year strategic plan to guide our work. Our legislative mandate has grown and FINTRAC has become more capable and focused in the detection and deterrence of money laundering and the financing of terrorist activities in Canada and abroad.
In the upcoming year, FINTRAC will maintain the momentum brought by these changes to ensure that effective measures are adopted in a variety of business sectors to combat money laundering and terrorist activity financing. By improving compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, we will strengthen Canada's defences against those that would abuse its financial system.
We are improving our processes for the analysis and disclosure of financial intelligence. These strides to improve our effectiveness will allow us to assist a larger number of investigations more quickly, helping them connect the money with the crime. As we make these improvements, we recognize that the true measure of FINTRAC's success will be the contribution that we make to the work of our partners.
As FINTRAC continues to improve its current operations, it is important that we also keep an eye to the future. We will identify new trends and emerging methods used to hide the proceeds of criminal activities and finance terrorist activity. FINTRAC will look toward the future by anticipating new threats and seeking out ways to contribute from our unique perspective and specialized role.
___________________________________________
Jeanne M. Flemming
Director
The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), Canada's Financial Intelligence Unit, exists to detect and deter money laundering and terrorist financing. The end result is a unique contribution to the public safety of Canadians and to the protection of the integrity of Canada's financial system. FINTRAC is an independent agency that was created in 2000. It reports to the Minister of Finance, who is in turn accountable to Parliament for the activities of the Centre. FINTRAC was established and operates within the ambit of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) and its Regulations.
FINTRAC is one of several domestic partners in Canada's Anti-Money Laundering and Anti-Terrorist Financing (AML/ATF) Initiative, which also includes the Department of Finance as the policy lead, the Royal Canadian Mounted Police (RCMP), the Canadian Security and Intelligence Service (CSIS), the Canada Revenue Agency (CRA), the Canada Border Services Agency (CBSA), the Office of the Superintendant of Financial Institutions (OSFI), the Public Prosecution Service of Canada, Communications Security Establishment Canada, the Department of Justice, Public Safety Canada and the private sector. FINTRAC is also part of the Egmont Group, an international network of financial intelligence units that collaborate to combat money laundering and terrorist activity financing.
To contribute to the public safety of Canadians and help protect the integrity of Canada's financial system through the detection and deterrence of money laundering and terrorist financing.
To be recognized as a world class financial intelligence unit in the global fight against money laundering and terrorist financing.
FINTRAC is Canada's financial intelligence unit and is a specialized agency which undertakes activities related to the collection of financial information and the production and dissemination of financial intelligence. In addition, the Centre undertakes activities to ensure compliance by reporting entities with their obligations under Part 1 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
FINTRAC's mandate is to facilitate the detection, prevention and deterrence of money laundering, terrorist activity financing and other threats to the security of Canada by gathering and analyzing information on suspect financial activities; making disclosures of financial intelligence to the appropriate law enforcement agency, CSIS, or other agencies designated by legislation in support of investigations and prosecutions and ensuring those subject to the PCMLTFA comply with reporting, record keeping and other obligations. FINTRAC's mandate also includes enhancing public awareness and understanding of matters related to money laundering. These activities are conducted while ensuring the protection of the personal information under FINTRAC's control.
FINTRAC's headquarters is located in Ottawa, with three regional offices in Montreal, Toronto and Vancouver having specific mandates related to compliance with the Act.
To effectively pursue its mandate, FINTRAC aims to achieve the following strategic outcome:
FINTRAC's detection and deterrence of money laundering and terrorist financing contributes to the public safety of Canadians and helps protect the integrity of Canada's financial system.
The chart below illustrates FINTRAC's complete framework of the program activities and sub-activities that contribute to the Agency's Strategic Outcome.
FINTRAC is introducing an enhanced program activity architecture (PAA) in 2010-11 that will enable more accurate reporting on activities and their benefits to Canadians. The new PAA has been developed to reflect changes from the introduction of new activities as a result of amendments made to the PCMLTFA and the development of the FINTRAC Strategic Plan for 2009-2012. The following table presents FINTRAC's new and previous Strategic Outcome and Program Activity as well as new sub-activities.
Current PAA |
Previous |
|
---|---|---|
Strategic Outcome |
FINTRAC's detection and deterrence of money laundering and terrorist financing contributes to the public safety of Canadians and helps protect the integrity of Canada's financial system. |
Financial Intelligence that contributes to the detection and deterrence of money laundering and terrorist activity financing in Canada and abroad. |
Program Activity |
Detection and deterrence of money laundering and terrorist financing |
Collection, analysis and dissemination of financial information |
Sub-activities |
Financial Intelligence |
N/A |
The amendments to the Strategic Outcome (SO) were made to show that the intended effect of FINTRAC's work is to contribute to the public safety of Canadians and to help protect the integrity of Canada's financial system. The reference to financial intelligence was removed at the beginning of the SO and is now reflected as a sub-activity. This reflects that there are other components to the detection and deterrence of money laundering and terrorist financing, such as compliance activities.
The Program Activity (PA) was modified and two sub-activities were created to better reflect FINTRAC's work. Notably, the PA speaks to the detection and deterrence of money laundering and terrorist financing, a shift from the previous PA which focused solely on financial information. The two sub-activities, Financial Intelligence and Compliance reflect the major operational aspects of FINTRAC's work. In addition to financial intelligence, the compliance function plays an integral role in the AML/ATF regime. First, it ensures that FINTRAC receives the financial information that it needs to analyze and disclose on cases of suspected money laundering and terrorist financing. The compliance program also serves as a deterrent for those who would attempt to use Canada's financial systems for money laundering or terrorist financing purposes. The implementation of new legislative requirements for reporting entities, including the introduction of administrative monetary penalties and a money services business registry have strengthened FINTRAC's capacity to ensure compliance with the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).
2010-11 |
2011-12 |
2012-13 |
---|---|---|
49.8 |
31.7 |
31.0 |
As a result of legislative amendments to the PCMLTFA, FINTRAC received additional funding in Budget 2006. For the years 2011-12 and 2012-13, a reinstatement of resources of $16.2M, which represents resources for FINTRAC's anti-money laundering / anti-terrorist financing initiative, is contingent on a Treasury Board mandated 10 Year review of Canada's AML / ATF Regime. As well, FINTRAC will receive funding under the National Anti-Drug Strategy until 2011-12. If this funding is not renewed, resources will be reduced by $.726M in 2012-13. The reinstatement of the $16.2M will bring FINTRAC's resources for 2011-12 to $47.9M and for 2012-13 to $47.2M.
2010-11 |
2011-12 |
2012-13 |
---|---|---|
315 |
222 |
216 |
For the years 2011-12 and 2012-13, the number of FTEs is contingent on the reinstatement of the above-mentioned funds under the AML / ATF Regime and the National Anti-Drug Strategy. The reinstatement of funds under the AML / ATF Regime would bring the number of planned FTEs to 315 for 2011-2012, and to 309 for 2012-2013. The number of FTEs would increase by 6 to 315 in 2012-2013 if the National Anti-Drug Strategy funding were also to be reinstated.
Performance Indicators |
Targets |
---|---|
Number of case disclosures and strategic products that assist and/or are used in investigations and other actions by law enforcement, intelligence agencies and prosecutors |
Stable or increasing number of case disclosures used in investigations and other actions |
Degree of involvement of reporting entities and other entities with obligations in the Anti Money Laundering / Anti-Terrorist Activity Financing (AML/ATF) regime |
Increasing number of participants in FINTRAC's information sessions, the number of hits on the Web site, and the number of calls to the Call Centre |
Program Activity |
Forecast Spending 2009-10 |
Planned Spending |
Alignment to Government of Canada Outcomes |
||
---|---|---|---|---|---|
2010-11 |
2011-12 |
2012-13 |
|||
Detection and deterrence of money laundering and terrorist financing |
51.3 |
49.8 |
31.7 |
31.0 |
Safe and secure communities |
Total Planned Spending |
49.8 |
31.7 |
31.0 |
Operational Priorities |
Type |
Links to Strategic Outcome |
Description |
---|---|---|---|
Align our financial intelligence products more closely with our partners' needs and identify emerging money laundering and terrorist financing trends. |
Previously Committed to |
This priority contributes to FINTRAC's strategic outcome: FINTRAC's detection and deterrence of money laundering and terrorist financing contributes to the public safety of Canadians and helps protect the integrity of Canada's financial system |
Why this is a priority:
Plans for meeting the priority:
|
Refine our risk-based compliance program. |
Previously Committed to |
This priority contributes to FINTRAC's strategic outcome: FINTRAC's detection and deterrence of money laundering and terrorist financing contributes to the public safety of Canadians and helps protect the integrity of Canada's financial system |
Why this is a priority:
Plans for meeting the priority:
|
Enhance collaboration with our partners and stakeholders. |
Previously Committed to |
This priority contributes to FINTRAC's strategic outcome: FINTRAC's detection and deterrence of money laundering and terrorist financing contributes to the public safety of Canadians and helps protect the integrity of Canada's financial system |
Why this is a priority:
Plans for meeting the priority:
|
Pursue policy and legislative opportunities to strengthen the AML/ATF regime. |
Previously Committed to |
This priority contributes to FINTRAC's strategic outcome: FINTRAC's detection and deterrence of money laundering and terrorist financing contributes to the public safety of Canadians and helps protect the integrity of Canada's financial system |
Why this is a priority:
Plans for meeting the priority:
|
Be innovative in our approach to operational processes to maximize our efficiency and effectiveness. |
Previously Committed to |
This priority contributes to FINTRAC's strategic outcome: FINTRAC's detection and deterrence of money laundering and terrorist financing contributes to the public safety of Canadians and helps protect the integrity of Canada's financial system |
Why this is a priority:
Plans for meeting the priority:
|
Management Priorities |
Type |
Links to Strategic Outcome |
Description |
---|---|---|---|
Promote excellence in our workforce and strengthen our management and human resources framework. |
Previously Committed to |
This priority contributes to FINTRAC's strategic outcome: FINTRAC's detection and deterrence of money laundering and terrorist financing contributes to the public safety of Canadians and helps protect the integrity of Canada's financial system |
Why this is a priority:
Plans for meeting the priority:
|
As Canada's Financial Intelligence Unit and a partner in Canada's Anti-Money Laundering/Anti-Terrorist Financing Initiative, FINTRAC is a unique organization and will continue to face unique challenges. FINTRAC, recognizing the importance of risk management, has updated its Corporate Risk Profile in 2009-10 and will be integrating it into its planning cycle in 2010-11.
FINTRAC's operating environment is shaped by a number of important considerations. The organization has recently undergone significant changes with the development of a strategic plan for 2009-12 and the coming into force of requirements brought about by amendments to the PCMLTFA. FINTRAC is now in the process of refining and improving its operations based on these changes, and in doing so the Centre will continue to face challenges with regard to resource levels. Additionally, FINTRAC is looking towards the future to ensure that the organization is well positioned to enhance its contribution to the AML/ATF regime by anticipating and responding to new opportunities and threats.
Fiscal year 2010-11 will mark ten years since the creation of the AML/ATF Initiative (formerly the National Initiative to Combat Money Laundering). In this 10th year the regime will undergo a comprehensive evaluation to asses its relevance, success and cost effectiveness. This important review will require significant FINTRAC attention, and the recommendations stemming from it may identify opportunities for improvement within the regime and FINTRAC. The evaluation is scheduled for completion in the second half of fiscal year 2010-11. The PCMLTFA is also scheduled to undergo a Parliamentary review in 2011. As a result of the last Parliamentary review in 2006, several amendments were made to the PCMLTFA, which in turn resulted in significant changes to FINTRAC's operations.
As identified in FINTRAC's Corporate Risk Profile, it is important that FINTRAC keep pace with the adaptations that criminals make to conceal proceeds of crime and with the clandestine efforts of those engaged in terrorist activity financing.
An increased demand for FINTRAC tactical products from disclosure recipients coupled with an increased demand for strategic products from partners, reporting entities and other stakeholders will continue to require the use of technological tools and dedicated resources for tactical and strategic research and analysis. Now, more than ever, FINTRAC must work to align intelligence products with the needs of recipients to ensure that they are as useful and timely as possible. FINTRAC must also make a concerted effort to foster relationships with reporting entities as they are an integral part of the AML/ATF initiative.
Further to the above noted risks, FINTRAC, like many other organizations, has the challenge of changing workforce demographics and the risk of being able to attract and retain a sufficient and representative workforce with the appropriate competencies to adequately support, deliver and manage programs and services.
Financial Resources by Fiscal Years
FINTRAC received funding for the new initiatives called for by the December 2006 Amendments to the PCMLTFA; however, as the coming into force dates of these initiatives gradually occurred over the following three fiscal years, important reprofiling of funds was prompted, which explains the apparent peak in resourcing for the years 2007-2008 and 2008-2009.
From 2005-2006 to 2006-2007, the total resources available to FINTRAC increased from $34.0M to $40.3M. This additional funding allowed FINTRAC to respond to existing program pressures (Business Continuity Plan (BCP) - disaster recovery site, asset replacement plan and workload pressures) related to the National Initiative to Combat Money Laundering (NICML, now AML/ATF regime). Actual spending was $39.4M in 2006-2007.
In 2007-2008, funding increased to $53.5M (including an amount of $5.082M which was reprofiled from 2006-07): additional resources were allocated towards the 5 year contribution for the establishment of the Egmont Group secretariat in Toronto, for FINTRAC's participation in the National Anti-Drug Strategy and for the implementation of the new initiatives. Actual spending for 2007-2008 was $51.1M.
The resources available for spending in 2008-2009 were $56.8M, including an amount of $5.1M reprofiled from 2007-2008 for new initiatives. Actual Spending for 2008-2009 was $50.6M , with a total of $1.85M being reprofiled into fiscal year 2009-2010.
Resources available in 2009-2010 are $51.3M, including a reprofiling of $1.25M for FINTRAC's BCP - Disaster recovery site and $.6M for the Contribution of the Establishment of the Egmont Group Secretariat.
Approved resource levels for fiscal years 2010-2011 are $49.8M, $31.7M in 2011-2012 and $31.0M in 2012-2013. Please note the sunsetting of FINTRAC's anti-money laundering / anti-terrorist activity financing initiative in 2010-2011. The reinstatement of ongoing resources of $16.2M for FINTRAC's anti-money laundering / anti-terrorist activity financing initiative is contingent upon approval of evaluation of the AML/ATF Regime. Funding for the National Anti-Drug Strategy has been provided until 2011-2012.
In 2011-2012, Canada's Contribution for the establishment of the Egmont Group Secretariat will also be sunsetting. This is in keeping with Canada's commitment to host the Secretariat, which included start-up funding of $5M over five years. Beginning in 2011, the Egmont Group Secretariat will be fully funded through annual contributions by Egmont members.
Vote # or Statutory |
Truncated Vote or Statutory Wording |
2009-10 |
2010-11 |
---|---|---|---|
25 |
Program expenditures |
43.7 |
45.4 |
(S) |
Contributions to employee benefit plans |
4.2 |
4.4 |
TOTAL |
47.9 |
49.8 |