ARCHIVED - Department of Finance Canada

Name of horizontal initiative: Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime, formerly the National Initiative to Combat Money Laundering (NICML)

Name of lead department: Department of Finance Canada

Lead department program activity: Economic and Fiscal Policy Framework

Start date of the horizontal initiative: June 2000

End date of the horizontal initiative: 2010–11

Total federal funding allocation (start to end date): $533,786 (thousands)

Description of the horizontal initiative (including funding agreement): The National Initiative to Combat Money Laundering (NICML) was formally established in 2000 as part of the government's ongoing effort to combat money laundering in Canada. Legislation adopted that year, the Proceeds of Crime (Money Laundering) Act (PCMLA), created a mandatory reporting system for suspicious financial transactions, large cross-border currency transfers, and certain prescribed transactions. The legislation also established the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) to collect and analyze these financial transaction reports and to disclose pertinent information to law enforcement and intelligence agencies. In December 2001, the PCMLA was amended to include measures to fight terrorist financing activities and renamed the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA).

The NICML was expanded and is now known as Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime. In December 2006, Bill C-25 amended the PCMLTFA to ensure Canada's legislation remains consistent with international anti-money laundering and anti-terrorist financing standards as set out by the Financial Action Task Force (FATF) and is responsive to areas of domestic risk. Amendments include enhanced client identification requirements, the creation of a registration regime for money services businesses, and the establishment of an administrative and monetary penalties regime to deal with lesser infractions of the Act.

Shared outcomes: To detect and deter money laundering and the financing of terrorist activities and to facilitate the investigation and prosecution of money laundering and terrorist financing offences.

Governance structure: Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime is a horizontal initiative comprised of both funded and non-funded partners. The funded partners include the Department of Finance Canada, the Department of Justice Canada, the Public Prosecution Service of Canada, FINTRAC, the Canada Border Services Agency, the Canada Revenue Agency, the Canadian Security Intelligence Service, and the Royal Canadian Mounted Police; non-funded partners include Public Safety Canada, the Office of the Superintendent of Financial Institutions Canada, and Foreign Affairs and International Trade Canada. An interdepartmental ADM-level group and working group, consisting of all partners and led by the Department of Finance Canada, has been established to direct and coordinate the government's efforts to combat money laundering and terrorist financing activities. In addition, the Department of Finance Canada also chairs a Public/Private Sector Advisory Committee. This is a broad-based advisory committee that includes both public and private sector representatives to provide general guidance for Canada's Anti-Money Laundering and Anti-Terrorist

Planning highlights: The priorities for Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime partners will continue to focus on the following key objectives: detecting, deterring and preventing money laundering and terrorist financing and facilitating the investigation and prosecution of money laundering and terrorist financing offences. Each partner plays a key role in the Regime and a coordinated effort is a priority. Regime partners will also provide input for the 10-Year Treasury Board Evaluation of the Regime, which will take place in 2010.

Federal partner: Department of Finance Canada
($ thousands)

Federal Partner Program Activity (PA)	Names of Federal Partner's Programs	Total Allocation (from Start to End Date)	Planned Spending for 2010–11	Expected Results for 2010–11
Financial Sector Policy	Canada's Anti- Money Laundering and Anti-Terrorist Financing Regime	$3,300	$300	Effective oversight of Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime (the Regime). Complete the 10-year Treasury Board-mandated evaluation of the Regime to assess effectiveness and access to continued funding. Monitor the financial sector for money laundering and terrorist financing risks and other emerging illicit financing risks. Participate in international forums related to combatting money laundering and terrorist financing—in particular, the G7 Financial Experts meetings, the Financial Action Task Force (FATF), the Caribbean Financial Action Task Force, and the Asia Pacific Group on Money Laundering­—and contribute and respond to G20 work on illicit financing. Implement Budget 2009 measure related to counter- measures to tackle illicit financing.
Total		$3,300	$300

 

Federal partner: Department of Justice Canada
($ thousands)

Federal Partner Program Activity (PA)	Names of Federal Partner's Programs	Total Allocation (from Start to End Date)	Planned Spending for 2010–11	Expected Results for 2010–11
The National Initiative to Combat Money Laundering	Canada's Anti- Money Laundering and Anti-Terrorist Financing Regime	$7,100	$100	The Criminal Division of the Department of Justice Canada plays a significant role in the Regime. For 2010–11, it is anticipated that the Criminal Division will use the resources it receives to carry out work related to the FATF, including attending FATF-related international meetings. Resources will also be allocated to ensure the Criminal Division's continued involvement in policy development relating to money laundering and terrorist financing. Finally, the Human Rights Law Section will receive money to deal with any ancillary constitutional issue raised during the prosecutions.
Total		$7,100	$100

 

Federal partner: Public Prosecution Service of Canada (PPSC)
($ thousands)

Federal Partner Program Activity (PA)	Names of Federal Partner's Programs	Total Allocation (from Start to End Date)	Planned Spending for 2010–11	Expected Results for 2010–11
Addressing criminal issues to contribute to a safer world	Canada's Anti- Money Laundering and Anti-Terrorist Financing Regime	$11,500	$2,300	PPSC plays a significant role in the Regime. For 2010–11, it is anticipated that information provided to law enforcement by FINTRAC will result in law enforcement's need of more prosecutorial legal advice. It is also anticipated that this information will result in additional charges being laid for money laundering and terrorist financing offences and thus result in an increased workload for prosecutors. PPSC has responsibilities related to the PCMLTFA as well. The work planned includes applications for production orders and prosecutions for PCMLTFA-related offences. In addition, resources will be used for the training of law enforcement personnel and prosecutors and for the development and coordination of policy as it relates to money laundering and terrorist financing. Finally, PPSC resources will be used to carry out work related to the FATF, as required.
Total		$11,500	$2,300

 

Federal partner: The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)
($ thousands)

Federal Partner Program Activity (PA)	Names of Federal Partner's Programs	Total Allocation (from Start to End Date)	Planned Spending for 2010–11	Expected Results for 2010–11
Collection, analysis, and dissemination of financial information	Canada's Anti- Money Laundering and Anti-Terrorist Financing Regime	$306,585	$37,500	FINTRAC's financial intelligence and case disclosures on money laundering will be widely disseminated to and used by law enforcement and intelligence agencies. Enhanced compliance in high-risk reporting entity sectors.
Total		$306,585	$37,500

 

Federal partner: Royal Canadian Mounted Police (RCMP)
($ thousands)

Federal Partner Program Activity (PA)	Names of Federal Partner's Programs	Total Allocation (from Start to End Date)	Planned Spending for 2010–11	Expected Results for 2010–11
Money Laundering Units (AML)	Canada's Anti- Money Laundering and Anti-Terrorist Financing Regime	$62,770	$6,872	Enhance national and international opportunities for the detection and investigation of money laundering activities, including leading national joint cash-smuggling interdiction operations. Develop FINTRAC disclosures, as well as other intelligence, to a point where resources from Integrated Proceeds of Crime Units or from elsewhere in the RCMP could be redirected toward investigations in an effort to increase seizures. Review current distribution of resources in the Anti-Money Laundering Program to determine effectiveness, with a view to maximizing available resources.
Anti-Terrorist Financing Units	Canada's Anti- Money Laundering and Anti-Terrorist Financing Regime	$28,095	$5,158	Through the gathering and analysis of financial intelligence, the Anti-Terrorist Financing Team will focus on converting that intelligence into proactive investigations, thus enhancing its ability to detect and deter terrorist financing activities. The Anti-Terrorist Financing Team will continue to work closely with domestic partners to further terrorist financing criminal investigations and will participate and contribute to international forums such as the FATF and international law-enforcement working groups on terrorist financing.
Total		$90,865	$12,030

 

Federal partner: Canada Revenue Agency (CRA)
($ thousands)

Federal Partner Program Activity (PA)	Names of Federal Partner's Programs	Total Allocation (from Start to End Date)	Planned Spending for 2010–11	Expected Results for 2010–11
Special Enforcement Program (SEP)	Canada's Anti- Money Laundering and Anti-Terrorist Financing Regime	$23,768	$2,200	CRA is focussing on the following four pillars: Participate in committees and initiatives to manage and enhance the AML/ATF Regime; Enhance operational relationships with FINTRAC and other partners in the Regime; Conduct research and analysis; and Contribute to the work of international organizations to enhance cooperation between tax administrations and anti-money laundering and anti-terrorist financing authorities. In 2010–11, SEP will continue to thoroughly review all disclosures received from FINTRAC and select for audit those with potential. The projected number of audits remains at 90, with a projected federal tax recovery of $7,000,000. However, the complexity of the files resulting from FINTRAC referrals is increasing, and this may lead to a reduction in the number of audits SEP is able to complete in 2011–12. Results of these audits will be gathered for intelligence purposes to determine if trends can be established.
Charities Directorate	Canada's Anti- Money Laundering and Anti-Terrorist Financing Regime	$16,068	$3,234	CRA, under the Income Tax Act (ITA), has responsibility for administering the registration system for charities. This recognizes that the existence of a strong regulatory deterrence against terrorist abuse of charities contributes to suppressing the financing of terrorism in Canada and to protecting and preserving the social cohesion and well-being of Canadians. CRA's regulatory oversight of charities has been strengthened by the enactment of complementary measures under the Charities Registration (Security Information) Act and the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and by changes to the Income Tax Act that authorize broader information sharing between AML/ATF agencies. Under these authorities, intelligence provided to CRA assists in its mandate to protect the integrity of the registration system for charities and information disclosed by CRA can be used for investigative purposes. In 2010–11, CRA will consolidate its capacity to identify and respond to cases involving possible links to terrorism through continuing IT development, expanding formal information-sharing arrangements with Regime partners, refining performance measurement and risk management tools, and staffing and training its full complement of program full-time equivalents (FTEs).
Total		$39,836	$5,434

 

Federal partner: Canada Border Services Agency (CBSA)
($ thousands)

Federal Partner Program Activity (PA)	Names of Federal Partner's Programs	Total Allocation (from Start to End Date)	Planned Spending for 2010–11	Expected Results for 2010–11
Risk Assessment	AML/ATF Regime		$2,004	The Risk Assessment Program involves identifying high-risk people and goods as early as possible before their arrival at Canada's border by using advance passenger and cargo information from carriers, importers, exporters, and other partners. Once identified, high-risk people or goods are flagged for closer examination and possible enforcement action at a Canadian port of entry.
Enforcement	AML/ATF Regime		$3,487	Border services officers detain, seize or forfeit, and impose penalties on, goods and currency that are non-compliant with the Customs Act or other Canadian legislation and regulations, such as the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. They are also responsible for administrating and enforcing the Immigration and Refugee Protection Act.
Conventional Border	AML/ATF Regime		$407	Development and administration of border-related programs and associated policies, regulations, and procedures.
Recourse	AML/ATF Regime		$338	Redress process available to people, importers, and carriers for CBSA enforcement-related actions.
Internal Services	AML/ATF Regime		$1,290	Internal Services provide program support in areas such as governance and management support (e.g. communications, legal services), resources management services (e.g. human resources and financial management, IT), and asset management services (e.g. real property, acquisitions).
Total		$74,600	$7,526*
* Please note that this figure includes 20 per cent for employee benefits plan (EBP) but not the 13 per cent Public Works and Government Services accommodation costs.

 

Total Allocation For All Federal Partners (from Start to End Date)	Total Planned Spending for All Federal Partners for 2010–11
$533,786†	$65,190
† Certain organizations that are partners in the AML/ATF Regime are exempt from reporting; therefore, the figures presented in the table may not sum to the total amount allocated.

Results to be achieved by non-federal partners: Not applicable

Contact information:

Rachel Grasham
Chief, Financial Crimes Section
Phone: 613-943-2883