Canada’s financial intelligence unit: FINTRAC

Author:Jeffrey R. Simser
Position:Ministry of the Attorney General, Toronto, Canada

Purpose International bodies, such as the Financial Action Task Force , have mandated the use of financial intelligence units (FIU) to address organized crime and money laundering. The purpose of this paper is to examine Canada’s FIU, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), and explore its current effectiveness and future challenges. Design/methodology/approac... (see full summary)

Canadasnancial intelligence
Jeffrey R. Simser
Ministry of the Attorney General, Toronto, Canada
Purpose International bodies, such as the Financial Action Task Force , have mandated the use of
nancial intelligenceunits (FIU) to address organized crimeand money laundering. The purpose of this paper
is to examine Canadas FIU, the FinancialTransactions and Reports Analysis Centre of Canada(FINTRAC),
and exploreits current effectiveness and future challenges.
Design/methodology/approach This paper examines FIUs in general and then looks more
specicallyat Canadas FIU, its policy and legislative basis as well as futurechallenges for the FIU.
Findings The challenge money laundering poses to society is a mirror of the challenge that organized
crime poses: a test of the values and the importance of rule of law. The FIU is an important mechanismto
address this challengegenerally, and there are importantchanges in the environment that must be addressed
if the future policyobjectives of the FIU are to be met.
Research limitations/implications Some of the policy nostrums thatare baked into the anti-money
laundering system, such as placement, layering and integration, need to be revisited and researched to
incorporatechanges in the licit and illicit marketplaces.
Practical implications Financialinstitutions and other intermediaries must comply with domesticanti-
money laundering laws.Compliance is always contextual, and this paper will outline the role of the regulator
and the environmentalchallenges that need to be met.
Social implications Effectively addressing money laundering and organized crime is critical to the
maintenanceof rule of law and the protection of the nancial system.
Originality/value This is a brief but very fulsome review of CanadasFIU, FINTRAC, which captures
broader challenges in addressing money laundering, economic crime and regulatory systems designed to
protect rule of law and theintegrity of the nancial system. The paper not only examinesthe current state of
the FIU but also exploreschallenges on the horizon.
Keywords AML, Financial intelligence unit, Money laundering, Canada, FINTRAC,
Organized crime
Paper type Technical paper
Canadas problem with money laundering is simply a mirror of its problem with organized crime.
Virtually all organized crime is prot driven and therefore gives rise to money, generally cash,
which must then be returned to the legitimate nancial system in order to be used to buy
additional product or taken as prot(
German, 2019).
Canadas problem with money laundering has been robustlychronicled by Dr German in a
series of reports commissioned by theAttorney General of British Columbia. Those reports
survey an environment that transnational organized crime groups have been able to
leverage and benet from, enabling signicant illicit nancial ows through a series of
alliances that include, amongst others, Mexican drug cartels, outlaw motorcycle gangs,
underground bankers and Chinese nationals avoiding currency and export controls.Money
is the golden threadthat binds all of these alliances. Organized crime is a sophisticated
illicit business that seeks to maximize prot and minimize risk. Canada is an inviting
environment. We have stable nancial institutions, ready access to international markets
Journalof Money Laundering
Vol.23 No. 2, 2020
pp. 297-307
© Emerald Publishing Limited
DOI 10.1108/JMLC-10-2019-0079
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