TORONTO, Sept 15 Canada can improve its
anti-money laundering rules regime, an international group that
monitors the worldwide laundering of illicit cash said on
Thursday, calling into question the effectiveness of the
country's financial intelligence agency.
The Financial Action Task Force (FATF) said Canada had
strong anti-money laundering measures in place and rules to
combat terrorism financing that had achieved good results, but
needed to make further improvements to be fully effective.
It said the Financial Transactions and Reports Analysis
Centre of Canada (FINTRAC), was hampered by the fact that it is
not authorized to request information from the firms that it
monitors. It noted, however, that FINTRAC had co-operated
effectively with law enforcement agencies.
"The Canadian authorities have achieved some success in
combating money laundering, notably when conducting law
enforcement efforts with the support of FINTRAC's analysis.
These are not entirely in line with the money laundering risks
that Canada faces and, overall, the recovery of proceeds of
crime appears to be relatively low," FATF said in the report.
FINTRAC issued its first ever penalty against a bank in
April, fining the unnamed lender C$1.1 million ($834,000) for
failing to report a suspicious transaction and various money
It had previously leveled fines against multiple credit
unions totaling just C$676,795, over a swath of issues from the
failure to submit suspicious transaction reports (STRs) to a
failure to determine whether a client is a politically exposed
foreign person (PEFP).
Its U.S. equivalent, the Financial Crimes Enforcement
Network, has by contrast fined a dozen banks and one credit
union more than $500 million over the last five years.
The FATF report also criticized the fact that lawyers in
Canada, unlike financial institutions and other professionals,
are exempt from the obligation to report suspicious
transactions, allowing them to use trust accounts to move around
money for clients without notifying regulators.
"The lack of coverage of these professions is a significant
loophole in Canada's AML framework and raises serious concerns.
Legal persons and arrangements are at high risk of misuse for
money laundering or terrorist financing purposes and that risk
is not satisfactorily mitigated," it said.
An internal report prepared for Canada's anti-money
laundering watchdog last year found that lawyers are the second
most likely profession after entrepreneurs to face money
($1 = 1.3183 Canadian dollars)
(Reporting by Matt Scuffham, editing by G Crosse)