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Ottawa, June 10, 2005
2005-041

Canada Will Assume the Presidency of the Financial Action Task Force in 2006

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• Backgrounder

Minister of Finance Ralph Goodale today announced that the Government of Canada has agreed to take on the Presidency of the Financial Action Task Force (FATF) for a 12-month period beginning July 2006.

The FATF was established by the G-7 group of nations in 1989 in response to mounting concerns about the growth of money laundering. In 2001, its mandate was expanded to include terrorist financing. The Task Force examines money laundering and terrorist financing techniques and trends, reviews national and international policy efforts and recommends additional measures for action.

The announcement of Canada’s assumption of the Presidency was made earlier today in Singapore as part of the FATF’s annual Plenary Meeting. Frank Swedlove, Assistant Deputy Minister of the Financial Sector Policy Branch at the Department of Finance Canada, will act as the FATF President during this period.

"Canada plays a leading role in the fight against money laundering and terrorist financing," said Minister Goodale. "Canada is committed to maintaining a strong and viable anti-money laundering and anti-terrorist financing regime."

The FATF’s recommendations represent the global standard against which all anti-money laundering and anti-terrorist financing regimes are now judged. The Task Force is made up of 31 countries and territories and two regional organizations, which represent nations in the European Community and the Arabian Gulf. It also cooperates closely with a global network of FATF-style regional bodies that represent an additional 120 countries.

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Backgrounder

What is the FATF?

The Financial Action Task Force (FATF) is an international body that develops and promotes policies to combat money laundering and terrorist financing. The FATF published a series of Forty Recommendations in 1990, which were revised in 2003. These provide a complete set of counter-measures against money laundering. In 2001, the FATF added terrorist financing to its mandate and subsequently issued Nine Special Recommendations to combat terrorist financing activities. These combined FATF Recommendations have become the global standard against which national anti-money laundering and anti-terrorist financing regimes are now judged.

FATF member countries are strongly committed to the discipline of multilateral monitoring and peer review. Each member of the FATF is periodically examined by its peers to assess the effective implementation of its anti-money laundering and anti-terrorist financing measures to highlight areas where further progress is needed. Canada was last assessed in 1997 and will be reassessed in early 2007.

What is Canada’s history as a member of the FATF?

Canada is a founding member of the FATF and has played an active role in the organization. Canada is also closely involved with the Caribbean Financial Action Task Force and the Asia/Pacific Group on Money Laundering, two regional organizations that share the same goals as the FATF and have adopted the FATF’s Recommendations as their standards. Cooperation with these regional bodies forms a critical part of the FATF’s strategy to ensure that all countries implement effective counter-measures against money laundering and terrorist financing.

What will be Canada’s responsibilities during its Presidency?

The President of the FATF sets out the priorities of a one-year work program and is responsible for the general supervision of the FATF’s ongoing operations. The President is also responsible for chairing the three plenary sessions, one of which will be in Canada, and any special meetings that may be required. In addition, the President is required to represent the FATF at other international anti-money laundering and anti-terrorist financing meetings and conferences.

What are Canada’s goals for its period as President?

Canada’s priorities will be announced to the FATF at the first meeting under its Presidency in the fall of 2006. We will want to build on the FATF’s recent efforts to enhance international cooperation and strengthen global efforts to combat money laundering and terrorist financing.

What is Canada doing to combat money laundering and terrorist financing?

Canada’s primary instrument for fighting money laundering and terrorist financing is the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA). It requires financial institutions and other intermediaries to meet customer identification, due diligence and record-keeping standards and to report suspicious and other financial transactions relevant to the identification of money laundering, terrorist financing and possession of terrorist property. As well, the Act requires the reporting of the importation and exportation of cash or monetary instruments.

Canada’s financial intelligence unit, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), has been operational since October 2001. Its primary functions are to receive reports under the PCMLTFA from various reporting entities (including banks, insurance companies, money services businesses, casinos, accountants and real estate agents), to analyze those reports for information relevant to money laundering and terrorist financing, and to provide key identifying information to law enforcement and intelligence agencies.

For additional information:
FATF: www.fatf-gafi.org
FINTRAC: www.fintrac.gc.ca