October 11, 2006
Address by the Honourable Jim Flaherty, Minister of Finance, at the
opening of the First Plenary Meeting of the 18th Session of the
Financial Action Task Force
Vancouver, British Columbia
Check against delivery
Thank you very much, and welcome to Vancouver and to the First Plenary
Meeting of the 18th Session of the Financial Action Task Force.
It gives me great pleasure to open this event under Canadian
chairmanship, and to offer a special welcome to the members of the
delegation from the Republic of Korea, who are attending their first FATF
meeting as observers.
I’m sure you’re enjoying this vibrant host city as much as I do when
I come here. Canadians are excited and proud that Vancouver is busy
preparing to host the 2010 Winter Olympics.
This city’s diverse population, bustling trade, natural beauty and
dynamic cultural communities really do represent what Canada is all about.
Canada is about diversity. About freedom. About quiet pride, and
innovative spirit. Ours is a country comprised of many cultures, all of
which contribute to our unique and strong Canadian identity.
We know that we are fortunate to live in a country where we are free to
be who we are, to raise our families as we see fit, to earn a living, to
speak openly without fear of censure, to practise our religious faith
without persecution, and to follow our dreams.
Canada is also a country on the move, a country with a G7-leading economy
and, under our new government led by Prime Minister Harper, a steadfast
commitment to meeting its international obligations.
We take our global responsibilities very seriously.
More than 2,000 members of the Canadian Forces are in Afghanistan today
at the request of the Afghan government. Most are part of the NATO-led
International Stabilization Assistance Force.
Canadians are there to do our part to prevent Afghanistan from once again
becoming a failed state that provides a safe haven for terrorists and
terrorist organizations.
We are there to provide the people of Afghanistan with hope for the
future.
We are there to help the government and its people build a stable,
peaceful and self-sustaining democratic country.
Ladies and gentlemen, we all know one basic fact.
Terrorists need money.
That’s why we’re here today.
To make it harder for them to get it.
To work together to find ways to starve them of the funds they need to
finance their despicable ambitions.
The fight against money laundering and terrorist financing is one that we
must win. We must stay one step ahead of criminals by continuing to
develop ways to defeat them, wherever they operate.
We live in an increasingly connected world, where terrorists and criminal
organizations are becoming more sophisticated in their attempts to move,
conceal and launder funds through financial systems and other means.
Ironically, our ongoing efforts to maintain the stability and
dependability of our financial systems can pose risks because, like everyone
else, criminals prefer financial systems they can trust.
Abuses to one nation’s financial system can have a serious ripple
effect well beyond its borders.
This makes your work more challenging than ever.
It also makes it more important than ever.
The FATF has made great strides over the years in working with regional
bodies and international financial institutions to develop a more fortified
international system.
You are to be commended for this, and for continually highlighting best
practices around the world and incorporating them into new, better
international standards.
Our success depends on all of our individual efforts. When we combine
those efforts, as we are doing today, we become a more formidable foe to
criminals and terrorists who want to use our financial systems to fund
criminal activities.
I can assure you that Canada’s New Government is being relentless in
its efforts to combat money laundering and terrorism financing.
We are committed to playing a stronger role at home and internationally
and have already been doing so through a number of initiatives, which I will
touch upon briefly now and talk more about in a few minutes.
1. In our government’s first budget this May, we provided additional
investments in Canada’s financial intelligence, police and border
security organizations;
2. We are increasing our involvement in regional bodies like the
Asia/Pacific Group, which are fighting money laundering and terrorist
financing within their own borders;
3. The City of Toronto has been chosen to become the permanent home for
Egmont, and Canada will contribute $5 million over the next five years
to help Egmont’s permanent secretariat get established; and
4. Last Thursday, our government introduced tough new anti-money
laundering and terrorist financing legislation, which I will talk more
about in a few minutes.
Increased Funding in Budget 2006
Since taking office in February, Canada’s New Government has made the
safety and security of our citizens—and our fellow citizens around the
world—a priority.
In our first budget in May, our government announced significant new
funding to enhance the work being done by:
- Canada’s financial intelligence unit, the Financial Transactions and
Reports Analysis Centre of Canada;
- the Royal Canadian Mounted Police;
- the Canada Border Services Agency; and
- the Department of Justice.
This additional funding will help in a number of ways:
- it will increase the number of RCMP officers working within the
anti-terrorist financing and anti-money laundering units;
- it will expand the capability of the Canada Border Services Agency to
detect unreported currency at airports and border crossings;
- it will enable the Department of Justice to handle the expanding legal
workload that will result from increasing the enforcement resources of
other government departments; and
- it will ensure FINTRAC, Canada’s financial intelligence unit, can
better analyze financial transaction reports and monitor the compliance
of the unregulated financial sectors such as money remitters.
A Stronger International Role for Canada
FINTRAC
FINTRAC is widely considered to have leading-edge analytical and
technological capacity. Since FINTRAC began making disclosures in early
2002, it has provided law enforcement and intelligence agencies with key
financial intelligence on money laundering, the financing of terrorist
activity and threats to Canada’s security by analyzing financial
transaction reports and other sources of information.
In fact, last week FINTRAC released its annual report and revealed that
it had tipped law enforcement and the Canadian Security Intelligence Service
to more than $5 billion in suspicious deals last year—more than double the
figure than the year before.
FINTRAC ensures that reporting entities are aware of and comply with
money laundering and terrorist financing legislation and regulations. They
do this while vigorously protecting the security of the personal information
under their control.
While only in existence for a few years, FINTRAC’s work is paying off.
International Role
Canada is proud to work with a number of regional bodies that share the
same objectives as we do—cutting off the funds terrorists need. We are
working with groups such as the Asia/Pacific Group on Money Laundering and
the Caribbean Financial Action Task Force.
Our commitment to these regions is why our government announced funding
for technical assistance and training in the fight against money laundering
and terrorist financing.
Among other projects, this funding will be used to help the Eastern
Caribbean Central Bank improve its money laundering and terrorist financing
system, and to provide on-the-ground training to improve the effectiveness
of regulation throughout the Caribbean and Asia/Pacific regions.
Canada will also contribute resources towards the work of the
Asia/Pacific Group in the delivery of technical assistance and training
within that region.
FATF Presidency
Holding the FATF Presidency is another example of Canada’s commitment
to national and international security, collaborative solutions to global
threats, and the need for international cooperation and institutions.
During the June FATF plenary meeting, Canada presented its draft work
plan for our Presidency year.
The plan builds on the FATF’s ongoing commitments, including regular
member assessments and improving international cooperation. It also focuses
on a few key priorities: actively pursuing the accession to membership by
China, India and the Republic of Korea; enhancing dialogue with the private
sector; and a review of the strategic direction of the organization in
preparation for its mid-term review.
In particular, it emphasizes the importance of strong collaboration with
the Financial Action Task Force-style regional bodies.
Egmont
This July, I was proud to announce that Toronto has been selected as the
permanent home for the Egmont Group secretariat. It is particularly
fitting that Egmont’s permanent home will be located in the heart of
Canada’s financial community.
Canada will provide funding over five years to provide the group with the
stable foundation it needs to strengthen its operations and infrastructure,
so that it can continue its important work well into the future.
Legislation
Another example of our government’s commitment to treating this issue
seriously is legislation we tabled just last week. When it is passed, which
I expect will happen before the end of this year, this bill, which contains
amendments to Canada’s Proceeds of Crime (Money Laundering) and Terrorist
Financing Act, will significantly strengthen Canada’s laws on money
laundering and terror financing.
Once passed by Parliament, these changes will make Canada’s overall
regime consistent with international standards.
It will do this by, among other things:
1. Creating an administrative monetary penalty system to deal with
individuals and businesses that do not comply with their obligations;
2. Bringing money service businesses which wire money or issue travellers
cheques into FINTRAC’s reach;
3. Strengthening "know your customer" measures for financial
institutions;
4. Requiring banks, insurance companies, securities dealers and money
service businesses to identify and monitor the transactions of foreign
nationals and their immediate families who hold prominent public
positions;
5. Requiring the reporting of attempted suspicious transactions.
Our government is also working to bring lawyers into Canada’s regime,
and is in the process of creating an advisory committee involving both the
public and private sectors to help with various money laundering and
terrorist financing issues.
All of us face numerous challenges as we create legislation that firmly
adheres to FATF standards—some unique to each country’s legal system,
and some we all share.
One of the issues we take very seriously here in Canada is the need to
balance increased vigilance and monitoring with the fundamental need to
protect the privacy of Canadian citizens.
As we did with this legislation, we will continue to consult widely with
Canadians in the future to ensure a better system does not come at the price
of a loss of privacy for our citizens.
Through the additional funding provided in our spring budget, legislative
reforms and initiatives I have outlined this morning, Canada’s New
Government is going much farther to detect, deter and prevent the abuse of
our financial systems by terrorists and organized crime.
Conclusion
All of these steps, and all of our efforts, add up to a better, safer
world for all of us. A world where our financial systems are used as they
were intended: to create better opportunities for our citizens and greater
prosperity for our nations.
We will ultimately win the battle against terrorist and criminal activity
by being smarter, more resourceful and more tenacious.
We will work together to continue to find new ways to starve these groups
of the funds they need to execute their plans.
Criminals don’t stand still—and neither can we. As we adapt, they
adapt. So we must be vigilant and relentless in our pursuit of ideas,
innovations and ways to cut them off and make it harder for them to finance
their activities.
Your efforts this week will go a long way towards permanently gaining the
upper hand in this fight.
I wish you much success.
Through more funds, improved legislation and a relentless resolve to
shoulder our global responsibilities, Canada is serving notice that we will
put these criminals out of business every chance we get.
And I assure you that, in Canada, you have an ally that will do
everything possible to make our shared goal of a safer world a reality.
Thank you.
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