Presentations and Speeches

Notes for Remarks by Glynnis French,
Deputy Director, Strategies and Partnerships
Financial Transactions and Reports Analysis
Centre of Canada, Before the Banking, Trade and Commerce Committee of the Senate

Ottawa
December 6, 2006

Table of Contents

• Introduction
• Benefits of the Legislative Amendments
• Protection of Privacy

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INTRODUCTION

Thank you, Mr. Chairman. It is our pleasure to be back before this committee today, this time to discuss why the provisions set out in Bill C-25 are important to FINTRAC and to Canada’s overall anti-money laundering and anti-terrorist financing regime.

Let me say first how much we appreciate the Committee’s thoughtful study of the legislation. The support you lend to us and our partners in the effort to continually improve Canada’s capacity to combat money laundering and terrorist activity financing is encouraging and helpful. Further, your constructive report has helped to raise the profile of money laundering and terrorist financing issues on the national scene, drawing attention to some of the major challenges we face – for this we are grateful.

While we are here today to discuss amendments to the current regime, we believe that it is important to recognize, at the outset, that the existing regime is working well. We have seen some tangible successes in the relatively short period of time that it has been in place and the regime is well regarded by our international counterparts.

We are pleased that FINTRAC makes an important contribution to that success. As we indicated in our Annual Report, tabled two months ago, in 2005-06 we produced 168 case disclosures of suspect financial activity, involving more than $5 billion in transactions. In fact, since FINTRAC began its operations five years ago, we have made a total of 610 case disclosures involving transactions valued at just over $8 billion.

We are gratified that, more and more, financial intelligence contributed by FINTRAC is being reflected in investigations, charges and prosecutions.

As you noted in your report, methods used to launder money and finance terrorism are constantly changing, and international standards that all countries are expected to meet are also rising. To keep abreast of these changes, it is necessary to make amendments to the legislative framework. We are pleased to say that FINTRAC believes that the proposed Bill is consistent with the Committee’s recommendations in this regard

Let me make a few points with regard to the Bill.

BENEFITS OF THE LEGISLATIVE AMENDMENTS:

From an operational perspective, there are three key elements to the proposed legislative package that are of particular importance to FINTRAC. They are:

• Expanding the coverage of the Act to new entities and professions;
• Strengthening the deterrence provisions of the Act; and,
• Expanding the range of information that FINTRAC may disclose.

Bill C-25 will expand the coverage of Canada’s anti-money laundering/anti-terrorist financing regime by bringing additional business sectors within the ambit of the legislation and regulations, for example, dealers in precious metals and stones, and the legal profession. These sectors have an identified vulnerability to money laundering and their inclusion will strengthen Canada’s efforts to combat both money laundering and terrorist activity financing.

Second, the Bill will strengthen the deterrence component of the regime by creating a registry for money service businesses and establishing a system of administrative monetary penalties. These proposed measures will improve compliance with the essential reporting, record keeping and client identification provisions of the law. This will not only contribute to FINTRAC’s analysis, but will greatly strengthen the general deterrence of money laundering and terrorist activity financing in Canada.

Third, C-25 will make it possible to enrich the intelligence product that FINTRAC can disclose to law enforcement and national security agencies by including some additional information in its disclosures, while at the same time continuing scrupulous protection of the privacy rights of Canadians. This will respond to the needs of law enforcement and make FINTRAC’s core product even more useful to them.

Before concluding and taking your questions, however, I would now like to draw your attention to one final aspect of the amendments – one of the bedrock issues of interest to both Houses: the protection of privacy.

PROTECTION OF PRIVACY

As acknowledged by your report, the Act was carefully crafted to ensure the highest possible protection for personal information while also making it possible for some information to be disclosed to law enforcement to facilitate the detection and deterrence of serious criminal activity. The protections begin with the very nature of the institutional arrangements that establish FINTRAC as an independent and arm’s length entity that receives and analyzes reported financial transaction information and that can only pass on such information if particular tests are met.

The information we hold can not be accessed by any other outside body, except by a court-granted production order, and the Act provides for serious criminal penalties to be applied to the unauthorized disclosure of information.

We take protection of privacy very seriously. As an institution, we firmly believe that safeguarding personal information is – and must be – the cornerstone of any effective regime.

FINTRAC has been and will always be willing to cooperate with the Privacy Commissioner in conducting reviews of the measures we have taken to protect the personal information we receive or collect and we support the amendment to the Bill that mandates a bi-annual review.

Let me conclude by simply reiterating that FINTRAC is very supportive of the amendments proposed in Bill C-25. They will help to ensure Canada’s anti-money laundering and anti-terrorist financing regime remains strong and effective well into the future.

Thank you.