Archived - Year Five Evaluation of the National Initiatives to Combat Money Laundering and Interim Evaluation of Measures to Combat Terrorist Financing: 3

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Appendix A: Legislative and Policy Context

Legislative and Policy Context

1. RCMP: Proceeds of Crime (POC) Program

The POC program is directed at identifying, assessing, restraining and forfeiting illicit and/or unreported wealth accumulated through criminal activities. Because the program targets illicit proceeds, it is an important component of the government's response to organized crime. Historically, the authority for the program relies on various provisions of the Criminal Code, Controlled Drugs and Substances Act; Customs Act; Excise Act; Proceeds of Crime (Money Laundering) and Terrorist Financing Act; and Seized Property Management Act.

Most POC sections work under an "integrated" model, specifically Integrated Proceeds of Crime Units (IPOC). IPOCs bring together expertise and skills from a diverse group, including RCMP investigators, lawyers from the Department of Justice, forensic accountants, municipal and provincial law enforcement, customs officers from the former CCRA, now CBSA-Customs, and CRA Investigations. There are currently twelve (IPOC) units located across the country.

IPOCs' tasks include: investigations, prevention initiatives, training for IPOC members and other enforcement agencies, as well as other outreach activities. IPOC units respond to requests for investigative services from a variety of sources. These include other RCMP units (Money Laundering Units funded through the National Initiatives to Combat Money Laundering and Related Anti Terrorist Financing Measures, Integrated National Security Enforcement Teams (INSETs), Integrated Market Enforcement Teams (IMETs), Combined Forces Special Enforcement Units (CFSEUs), RCMP Drug Sections, RCMP Border Integrity Sections, etc.), and other Provincial, Municipal and foreign enforcement agencies. When requests are received, a comprehensive assessment is conducted based on various risk and priority factors to determine the viability of conducting an investigation. Only then is approval sought and investigations pursued.

Since 2001, IPOC units have been responsible for the forfeiture of $35.5M worth of criminal assets.

2. Other Integrated Teams: INSETs, IMETs, CFSEUs and IBETs

FINTRAC meets regularly with the RCMP Integrated Market Enforcement Teams (IMETs), Integrated National Security Enforcement Teams (INSETs), and Combined Forces Special Enforcement Units (CFSEUs) in the region, as well as Integrated Border Enforcement Teams (IBETs).^[1] These teams are concerned with tracking and deterring criminal activities of terrorist groups or individuals who pose a threat to Canada's national security.

• Integrated National Security Enforcement Teams (INSETs): In April 2002, the Government of Canada invested approximately $64M over a five-year period towards creation of INSETs. This investment enabled INSET members to work more closely with national and international partners in the collection and sharing of vital intelligence, which is also analysed in a timely and accurate manner, enabling effective action.^[2] Teams are made up of representatives from RCMP, the Canada Border Services Agency (CBSA), Citizenship and Immigration (CIC), the Canadian Security Intelligence Service (CSIS) and provincial and municipal police services. These groups (a refocusing of the RCMP National Security Intelligence Sections-NSIS) are mandated to:

• Integrated Market Enforcement Teams (IMETs): The Initiative is aimed at strengthening the law enforcement community's ability to detect, investigate and deter capital markets fraud by focusing resources on the investigation and prosecution of corporate frauds and market illegalities. Teams are made up of police, lawyers, and other investigative experts. These teams will be co-managed by RCMP, Justice Canada and partner departments and agencies and will work closely with securities regulators and other federal and provincial authorities. The Government of Canada's 2003 budget proposed the spending of $30M annually over a five-year period to fund IMETs in four major financial centres: Toronto, Vancouver, Montreal and Calgary. Eventually, there will be IMETs operating in nine major centres across Canada.^[3]
• Combined Forces Special Enforcement Units (CFSEUs): The first CFSEU was formed in 1977. Since then, this program has expanded to include a total of seven CFSEU's located in Ontario, Quebec, Alberta and British Colombia. CFSEUs have always been organized crime-focused; however, since the terrorist attack of September 11, 2001, they have also been involved in counter terrorism and tactical investigations. The CFSEU mandate is to investigate and dismantle organized crime enterprises by being intelligence led and project oriented. A secondary mandate includes the sharing of intelligence with partners and to cooperate and assisting other organized crime units at the national and international levels. Each CFSEU is managed by an Executive Steering Committee, and a Joint Management Team ensures adequate resources within the Unit. CFSEUs exemplify the RCMP Op's Model ensuring that every project is multi-disciplinary and target selection is based upon national priorities and SLEIPNIR and PROOF, which are RCMP scoring systems for prioritizing cases. The benefits of the CFSEU program are many and include the development of strategic and tactical partnerships with other law enforcement agencies, intelligence sharing, public education and fast, effective integrated responses to organized crime threats.
• Integrated Border Enforcement Team (IBETs): IBETS, created in 1996, are multi-agency law enforcement teams (both Canadian and US services and law enforcement (LE) are involved) created to target cross-border criminal activity. The importance of this type of partnership has been heightened with the reality of terrorism and the increased need to enhance border integrity. These teams enable Canada and US police forces and LE agencies to work together "to ensure that the border is open for business, but closed to crime". The goal of IBETs is to help guard against potential threats of terrorism, and to impede the smuggling of drugs, humans, contraband cigarettes, or other illegal substances. In fact, they have, in some instances, effectively disrupted smuggling rings, confiscated illegal drugs, weapons, and vehicles, and have also intercepted criminal networks trying to smuggle illegal migrants across the border. Thus, these teams enhance existing security and safe trade measures to help ensure a secure border between the two countries.

3. Criminal Intelligence Service Canada (CISC)

Criminal Intelligence Service Canada (CISC) was established in 1970 as a network to facilitate the timely exchange of criminal intelligence among member agencies. CISC's mission is to be a strategically-focused organization that, as a centre of excellence, supports the national effort to detect, reduce and prevent organized and other serious crime affecting Canada. Through the creation of CISC, the Canadian criminal intelligence community is united to more effectively and efficiently assess the threat of organized and other serious crime, with the goal of developing strategies to make Canadian communities safer. CISC member agencies include federal, provincial, regional and municipal law enforcement agencies which have a criminal intelligence unit.

CISC's 380 member agencies collaborate in the collection, collation, evaluation, analysis and dissemination of criminal intelligence by contributing to the Automated Criminal Intelligence Information System (ACIIS).

CISC's national intelligence priorities are determined annually by the CISC Executive Committee, consisting of over 20 leaders from Canada's law enforcement community. The 2004 intelligence priorities are as follows:

• Asian-based organized crime,
• Eastern European-based organized crime,
• Organized crime at marine/air/land border areas,
• Outlaw Motorcycle Gangs, and
• Traditional (Italian-based) organized crime.

4. National Coordinating Committee on Organized Crime (1997) and the National Agenda to Combat Organized Crime (2000)

In 1997, following a recommendation made at the National Forum on Organized Crime, the National Coordinating Committee on Organized Crime (NCC) was created. The NCC, a body composed of federal, provincial and territorial government officials, prosecutors, and representatives from the law enforcement community, identifies key issues for action and develops national strategies and initiatives to address them.^[4] The NCC's five Regional Coordinating Committees, made up of federal, provincial and territorial representatives,^[5] ensure that local agencies' concerns are brought to the table.

Canada's national strategy to combat OC provides a structure through which impacts from trans-national OC groups can be addressed. For many of these OC groups, money laundering is the primary mechanism by which the original source behind their proceeds of crime can be hidden while at the same time distancing the proceeds from the owner. The proceeds of crime often work their way back into the economy via the laundering process of placement, layering, and integration described above. International and domestic cooperation are required in effort to fight OC through control of ML.

Building on the 1998 Joint Statement, federal, provincial and territorial Ministers Responsible for Justice, the Government of Canada endorsed, in 2000, the National Agenda to Combat Organized Crime. The National Agenda recognizes that the fight against organized crime is a national priority (and money laundering was perceived as a specific priority in need of attention) that requires governments and the law enforcement community to work together.^[6] The National Agenda> identified four main components to be addressed: national and regional coordination; legislative and regulatory tools; research and analysis; and communications and public education.^[7]

5. Public Security and Anti-Terrorism (PSAT)^[8] Initiative, Anti-Terrorism Act (ATA) and Public Safety Act

In the wake of September 11, 2001, the PCO and Prime Minister formed an ad hoc Cabinet Committee on Public Security and Anti-Terrorism. It was tasked with developing a Canadian response to the events of September 11, 2001 and to ensure well considered, timely and collective decisions by Ministers on security policy. In December 2003, the Cabinet Committee on Security, Public Health and Emergencies was formed to replace the Ad Hoc Committee, and was charge with the responsibility to manage national security and intelligence issues and activities and government-wide responses to public health, national disasters, and security emergencies.

In the 2001 Budget, the government allocated $7.7 billion in new funds to be spent over the next five years on the Public Security and Anti-Terrorism initiative for security, intelligence, and law enforcement departments and agencies to heighten border security and undertake initiatives to enhance the security of Canadians. The Budget included major investments to

• equip and deploy more intelligence and front-line investigative personnel, improve co-ordination among agencies, and boost marine security ($1.6 billion);
• improve screening of immigrants, refugee claimants, and visitors (including detention and removal), speed up the determination of refugee claims, and introduce new fraud-resistant Permanent Resident Cards ($1 billion);
• improve the protection of critical infrastructure and emergency preparedness and response; and expand the military's anti-terrorism capacity ($1.6 billion);
• create a new air security organization, place armed plainclothes police officers on Canadian aircraft, purchase explosive-detection equipment, and enhance air transportation policing ($2.2 billion); and
• enhance border security and improve the infrastructure that supports major border crossings to ensure the legitimate flow of goods and people ($1.2 billion).

In response to the terrorist threat following the events of September 2001, the Canadian Government passed anti-terrorism legislation in December 2001, the Anti-Terrorism Act (ATA). PSAT also saw the development of a broad range of legislative initiatives to increase security and public safety, which addresses the challenge of dealing with the sophisticated and trans-border nature of terrorism. The purpose of the ATA is to combat terrorism through provisions that detect, disrupt and disable terrorist activities and groups. The ATA established, among others:

• Processes for designating terrorist organizations.
• New and specialized criminal offences.
• Powers to freeze and seize terrorist property.
• Charities Registration (Security Information) Act.^[9]

Under this act, the original PCMLA was amended (December 24, 2001) and FINTRAC's mandate was expanded to include detection activities related to TF activity in Canada. To this end, FINTRAC received $34 million over three years under the PSAT initiative. The changes included:

• Financial service providers being required to report suspicions of ML, now, are also required to report suspicions of TF activity to FINTRAC;
• FINTRAC' s role being broadened to include the analysis of these reports and disclosure of key identifying information to LE and intelligence authorities; and
• FINTRAC sharing information about TF activities with its international counterparts, subject to safeguards with respect to its treatment and disclosure.^[10]

FINTRAC's partners in this area include:

• CRA;
• Canadian Security and Intelligence Service (CSIS);
• Department of Justice; and
• RCMP.^[11]

The Government of Canada introduced to the House of Commons, a bill on public safety initiatives in support of its anti-terrorism plan. The Public Safety Act (and the accompanying amendments to various federal laws)^[12] increase the Government's capacity to prevent terrorist attacks, protect Canadians, and respond swiftly should significant threats arise. Key measures of the Act include:

• Clarifying and updating existing aviation security authorities to maximize the effectiveness of Canada's aviation security system and enhance the ability of the Government of Canada to provide a safe and secure environment for air travel;
• Sharing of law enforcement and national security information between federal departments and agencies;
• Deterring hoaxes that endanger the public or heighten public anxiety;
• Establishing tighter controls over explosives and hazardous substances, activities related to other dangerous substances such as pathogens, and the export and transfer of technology;
• Helping to identify and prevent harmful unauthorized use or interference with Department of National Defense computer systems;
• Deterring the proliferation of biological weapons; and,
• Respecting the privacy of Canadians.

Under this legislation, new provisions are included to:

• Improve the capacity of federal departments and agencies involved in anti-terrorism and national security activities to share critical information and coordinate their work; and
• Provide for the smooth flow of information between Canada and its partners internationally, particularly the United States, in order to prevent terrorist activity and protect public safety;
• Provide a mechanism by which the Government of Canada can provide financial assistance, where necessary, to enhance marine security;
• Increase the capacity of the RCMP and CSIS to protect the public and work with their counterparts on preventing terrorist and other criminal activities that endanger public safety.^[13]

With the passing of the Public Safety Act, FINTRAC was provided with the ability to sign MOUs with regulators and supervisors of financial entities to share information on how various reporting entities such as banks and trust companies are complying with the provisions of the PCMLTFA. The new legislation also proposed a complimentary amendment to the Office of the Superintendent of Financial Institutions Act, permitting the superintendent to disclose to FINTRAC information related to compliance by financial institutions. The Act also amends the PCMLTFA to permit FINTRAC to collect information from government databases related to national security in much the same way that it may collect information from law enforcement databases.^[14]

6. Personal Information Protection and Electronic Documents Act (PIPEDA - 2001)

Although assent for this bill was granted in 2000, PIPEDA, the federal legislation that protects personal information in the private sector, was not fully enacted until January 2004 at which time it applied to every organization except those in specific circumstances (e.g., government institutions to which federal Privacy Act already applies; substantially similar legislation in a specific province).^[15]

Under PIPEDA, an individual's personal information is to be collected, disclosed or used only with the individual's knowledge and consent, subject to the exceptions set out in the Act. The aim of part one of the Act is to establish, in an era in which technology increasingly facilitates the circulation and exchange of information, rules to govern the collection, use and disclosure of personal information in a manner that recognizes the right of privacy of individuals with respect to their personal information and the need of organizations to collect, use or disclose personal information for purposes that a reasonable person would consider appropriate in the circumstances.

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Appendix B: Logic Model: National Initiatives to Combat Money Laundering and Related Anti-Terrorist Financing Measures

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Appendix C: Matrix of Issues and Indicators

Matrix of Issues and Indicators by Specific Methodology

Table C.1.1: Relevance Issues

Issue	Indicators	Key documents and Files		Operational Data, Systems, Databases			2nd ary Data	Lit. Review	Media	KII
		1	2	3	4	5	6	7	8	9
1. To what extent are the objectives of the Initiative and anti-terrorist financing measures still relevant (i.e., participation in the international fight against organized crime through improved detection and deterrence of ML and terrorist financing)? ML TF	Perceptions of Initiative partners Perceptions of International Partners Level of international commitment to issues of ML and terrorist financing and pressure on Canada to participate Evidence that ML and terrorist financing activities are being carried out by organized crime groups Evidence of terrorist financing activity	X	X					X		X
2. Is there a continued need for the Initiative and measures to combat terrorist financing? ML TF	Perceptions of Initiative partners Perceptions of International Partners Perceptions of other experts (ML, terrorist financing, organized crime, law enforcement, etc.) International commitments Level of demand for Initiative activities and outputs	X		X				X		X
3. To what extent do the Initiative and anti-terrorist financing measures meet the policy priorities of the government (with respect to criminal justice, privacy rights and financial sector regulation)? ML TF	Perceptions of Initiative partners Perceptions of other experts (ML, terrorist financing, organized crime, law enforcement, privacy, Parliamentarians, etc.) Nature of governmental priorities (including with respect to privacy, etc. versus law enforcement/anti-ML/anti-terrorist financing)							X		X
1=Document Review, 2=File Review, 3=Operational Data Review, 4=System Review, 5=Database Review, 6=Secondary Data Analysis, 7=Literature Review, 8=Media Analysis, 9=Key Informant Interviews

^ML

To be included in Year Five full evaluation of the National Initiative to Combat Money Laundering.

^TF

To be included in interim evaluation of Anti-Terrorist Financing work of FINTRAC.

 

Table C.1.2: Design and Delivery Issues

 

Table C.1.3: Success Issues

Issue	Indicators	Key documents and Files		Operational Data, Systems, Databases			2nd ary Data	Lit. Review	Media	KII
		1	2	3	4	5	6	7	8	9
1. What progress has been made towards achieving the objectives of the Initiative and anti-terrorist financing measures? ML TF To what extent has the Initiative and related anti-terrorist financing measures fulfilled Canada's national and international anti-ML and anti-terrorist financing commitments? To what extent has the Initiative and related anti-terrorist financing measures enhanced Canada's compliance with the FATF Forty +8 Special Recommendations? To what extent has the Initiative and related anti-terrorist financing measures contributed to Canada's ability to meet its G-7, G-8, FATF and UN commitments? 5	Progress made in addressing FATF recommendations Nature and extent to which legislation and regulations are in line with 40 + 8 Recommendations Positive mutual evaluation in next round of assessments FIU (FINTRAC) up and running Cross-border program fully implemented FINTRAC Membership in Egmont and other international organizations Recognition of Canada as a leader in the anti-ML and TF field Feedback from foreign financial intelligence units	X	X							X
To what extent has the Initiative and related anti-terrorist financing measures resulted in an effective legislative balance between anti-ML and anti-terrorist financing goals and privacy and Charter concerns?	Number of requests under Privacy Act Number of privacy complaints under Privacy Act Number of successful privacy complaints Number of Charter challenges Number of successful Charter challenges Nature and extent to which components of the legislation and regulations are struck down with respect to Charter or Privacy violations Perceptions of balance (from variety of sources, i.e., privacy advocates, law enforcement, reporting entities) FINTRAC's internal security policy and process
2. To what extent have Canada's anti-ML and terrorist financing programs contributed to improved national and international liaison and cooperation with respect to ML and terrorist financing? ML TF	Number of disclosure reports and queries received/sent from international partners Access to interagency databases Sharing of training tools/resources Relative levels of cooperation through formal linkages including: Number of Joint Forces Operations Number of MOUs International agreements/networks Number of partnerships, and interagency and working groups Number of requests (under MLATs) leading to assistance Information available/received including: Quality of information available/received Comprehensiveness of information available/received User perceptions of enhancements to information Volume of communications/information exchange		X	X						X
3. To what extent have the Initiative and anti-terrorist financing measures increased public awareness of ML and terrorist financing and support for its efforts in combating them? ML TF	Public knowledge of the impact of ML and terrorist financing in Canada Volume and content (improved, more detail, reflects better understanding, etc.) of reporting by the media on relevant issues (ML and organized crime, terrorist financing) and the Initiative itself		X				X		X
4. To what extent have efforts to promote and monitor compliance with the PCMLTFA continued to enhanced compliance and improved data for analysis? ML TF To what extent has data for analysis by FINTRAC improved over time? To what extent has compliance with the PCMLTFA and regulations by reporting entities and importers/exporters been enhanced over time?	Volume of reporting to FINTRAC Number of reports filed (i.e. mandatory, voluntary, border, etc.) Extent to which an efficient risk-based compliance-monitoring program is in place Extent to which material non-compliance issues have been detected in examinations Extent to which transactions reports meet quality standards Effectiveness of mechanisms to respond to requests for information and provide guidance to reporting entities Error rates in data received by agencies Number of wilful non-compliance referrals to law enforcement Number of MOUs between FINTRAC and regulators		X		X					X
5. To what extent have the Initiative and anti-terrorist financing work of FINTRAC contributed to increased understanding of and improved response to ML and terrorist financing through strategic analysis? ML TF To what extent have the Initiative and anti-terrorist financing measures contributed to an increased understanding of ML and terrorist financing among its partners and stakeholders (i.e., typologies, link to organized crime)? To what extent have the Initiative and anti-terrorist financing work of FINTRAC contributed to an improved response to ML and terrorist financing within Canada?	Level of knowledge about ML and terrorist financing New/more refined typologies Extent of implementation of a continuous outreach plan to all large and medium-size law enforcement agencies, and CSIS Level of understanding of the linkages/relationship between ML and organized crime Value of the information that is accessible to FINTRAC for analysis purposes Level of resources focused on identified high risks Magnitude of response to ML and terrorist financing Types of responses to ML and terrorist financing Perceptions of Initiative partners Perceptions of other experts (ML, organized crime, law enforcement, etc.) Amount and quality of voluntary information received from domestic and international law enforcement and intelligence agencies and the public	X						X		X
6. To what extent have the Initiative and anti-terrorist financing measures contributed to an improved ability to identify targets and enhanced support for investigations through tactical analysis? ML TF To what extent have the Initiative and anti-terrorist financing measures contributed to an improved ability to identify targets (i.e., law enforcement, taxation & duties, immigration and national security)? To what extent have the Initiative and anti-terrorist financing measures contributed to enhanced information to support investigations?	Number of new targets identified Number of discloses to relevant agencies Responses to international requests Feedback received from domestic intelligence community Feedback received from international law enforcement agencies and intelligence organizations Quality of information provided on targets Quality of information disclosed Qualitative assessment of the value added to investigations Improved efficiency of decision-making processes about investigations Number of investigations restarted/renewed on the basis of new or improved information Number of new investigations initiated		X			X				X
7. To what extent have the Initiative and anti-terrorist financing measures contributed to the quality of investigations of ML or terrorist financing-related offences? ML TF To what extent have the Initiative and anti-terrorist financing measures contributed to improvements in the quality of evidence to support the judicial process with respect to ML and terrorist financing offences? To what extent have the Initiative and anti-terrorist financing measures contributed to increased seizures of proceeds of crime or funds for terrorist use?	Number of ML/terrorist financing (ML/TF) disclosures provided to partners Number of new ML/TF investigations opened based on FINTRAC disclosures Number of ongoing ML/TF investigations where FINTRAC intelligence is being used Number of ML/TF production orders requested Number of ML/TF search warrants (including special) requested linked to FINTRAC intelligence Number and value (market value) of restraint/seizure orders linked to FINTRAC intelligence Number/nature of ML/TF related charges laid where FINTRAC intelligence involved in case Number of Cases referred to Justice (tax & duties) Value of reassessments in cases (tax & duties) referred to Justice Perceived timeliness, credibility/usefulness of FINTRAC disclosures by law enforcement, CRA, CIC, and prosecution	X				X				X
8. To what extent have the Initiative and related anti-terrorist financing measures contributed to the creation of a hostile environment to ML and terrorist financing in Canada? ML TF	Vulnerable sectors' knowledge of typologies Commitment to vigilance by reporting entities Level of compliance with PCMLTFA and Regulations Levels of voluntary suspicious reports New ML and terrorist financing trends (showing changes in criminals' behaviour)	X	X					X	X	X
9. To what extent have the Initiative and anti-terrorist financing measures contributed to increased effectiveness and efficiency of adjudications and sanctioning related to ML or terrorist financing offences? 5+ To what extent have the Initiative and anti-terrorist financing measures contributed to the increased effectiveness and efficiency of adjudications (criminal, civil, immigration, etc.) related to ML and terrorist financing? To what extent have the Initiative and anti-terrorist financing measures contributed to increased forfeitures of proceeds of crime and funds for terrorist use?	Number of ML/TF production orders granted by court and included in prosecution case Number of ML/TF search warrants (including special) granted linked to FINTRAC where evidence used in prosecution case Trends in volume and successful outcome of Charter Challenges Number and value (market value) of restraint/seizure orders forfeited (criminal/civil) linked to FINTRAC intelligence Disposition/result of charges (e.g., pleas vs. court stays) Perceptions of prosecutors/civil litigation counsel Trends in Resources required to process cases Number of successful appeals Elapsed time between charges laid and adjudication result		X			X				X
10. To what extent has the Initiative contributed to a reduction in profitability of crime in Canada? 5+	Levels of profit-motivated crime Amount of assets forfeited		X				X			X
11. To what extent has the Initiative contributed to a decrease in the level of ML and terrorist financing activity in Canada? 5+	Levels of charges and convictions for offences associated with ML and terrorist financing Amount of assets forfeited		X				X			X
1=Document Review, 2=File Review, 3=Operational Data Review, 4=System Review, 5=Database Review, 6=Secondary Data Analysis, 7=Literature Review, 8=Media Analysis, 9=Key Informant Interviews

⁵⁺

These issues relate to longer term outcomes which may not be relevant to measure at year five.

 

Table C.1.4: Cost-Effectiveness and Alternatives Issues

Issue	Indicators	Key documents and Files		Operational Data, Systems, Databases			2nd ary Data	Lit. Review	Media	KII
		1	2	3	4	5	6	7	8	9
1. To what extent has the Initiative achieved its results to date in a cost-effective manner? ML To what extent has the Initiative improved Canada's response to ML and terrorist financing, in relation to resources allocated? To what extent are compliance costs burdensome for reporting entities? To what extent has the Initiative affected the competitiveness of regulated entities? To what extent has the Initiative enhanced the integrity of Canadian financial institutions?	Perceptions of compliance burden by entities Perceptions of competitiveness levels and integrity (public, entities' own) Comparisons with similar measures in other countries with similar regimes	X								X
2. Are there more effective ways of achieving the objectives of the Initiative? ML	Comparison with other countries' regimes Perceptions of Initiative partners Perceptions of other experts (ML, organized crime, law enforcement, etc.)	X								X
1=Document Review, 2=File Review, 3=Operational Data Review, 4=System Review, 5=Database Review, 6=Secondary Data Analysis, 7=Literature Review, 8=Media Analysis, 9=Key Informant Interviews

 

Table C.1.5: Other Issues

Issue	Indicators	Key documents and Files		Operational Data, Systems, Databases			2nd ary Data	Lit. Review	Media	KII
		1	2	3	4	5	6	7	8	9
1. Have the Initiative and anti-terrorist financing measures been implemented as intended ML TF	Perceptions of Initiative partners Perceptions of experts (ML, terrorist financing, organized crime, law enforcement etc.)	X								X
2. What have been the challenges, if any, to the implementation of the Initiative and anti-terrorist financing measures and how have these challenges been addressed or overcome? ML TF	Perceptions of Initiative partners Perceptions of experts (ML, terrorist financing, organized crime, law enforcement etc.)	X								X
3. Are appropriate practices and mechanisms in use to monitor the effectiveness and impact of activities of the Initiative and anti-terrorist financing measures? ML TF	Perceptions of Initiative partners Perceptions of experts (ML, terrorist financing, organized crime, law enforcement etc.)	X								X
4. Have the Initiative and anti-terrorist financing work had any unintended impacts (positive or negative)? ML TF	Perceptions of Initiative partners Perceptions of experts (ML, terrorist financing, organized crime, law enforcement etc.)	X								X
5. To what extent are the activities of the programs coordinated among partners? ML TF	Perceptions of Initiative partners									X
1=Document Review, 2=File Review, 3=Operational Data Review, 4=System Review, 5=Database Review, 6=Secondary Data Analysis, 7=Literature Review, 8=Media Analysis, 9=Key Informant Interviews

 

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Appendix D: Evaluation Methodology

A. Research Design

The details of the research design were described in the first project deliverable - the Work Plan and Research Design Report (July 5, 2004). This report included a description of the methodological approach for addressing the evaluation issues and questions; a matrix linking each evaluation issue/question with indicators and methods/data sources (presented in Appendix C); interview guides (presented in the Work Plan and Research Design Report) and a list of documents reviewed (included in Appendix E).

B. Reviews of Documents, Operational Data, Secondary Data, Literature and Media

Multiple reviews of documents and other materials were conducted for this evaluation. Reviews were undertaken of key documents, operational data, secondary data, the literature on money laundering and terrorist financing, and print and electronic media. These reviews addressed a large number of the evaluation issues. Exactly which issues each type of review addressed is indicated in Appendix C. A media review was also conducted focused on issues of public awareness and relevance. The documents and other material reviewed for this evaluation are presented in Appendix E. The results of the review were synthesized into an internal document that informed all deliverables, including the Final Report.

C. Key Informant Interviews

In general, key informant interviews help in gaining a better understanding of the perceptions and opinions of individuals who have had a significant role or experience in the design and/or delivery of the Initiative and the anti-terrorist financing work of FINTRAC as well as those who have a key stake in these activities. The interviews contributed to addressing many of the evaluation issues, such as whether there is a continued need for the Initiative and for measures to combat terrorist financing, whether the organizational set-up is appropriate to meet objectives, the extent to which the Initiative has achieved its objectives, observable impacts, and perspectives on cost-effectiveness and alternatives. For this evaluation, 32 interviews were conducted involving about 56 individuals with varying degrees of association with or interest in the Initiative. The distribution across the sub-groups of interviewees is presented in Appendix F.

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Appendix E: List of Documentation Reviewed

ABC Solutions Inc. (February 14, 2003). The National Initiative to Combat Money Laundering: Year Three Evaluation.

Acts and Regulations concerning Cross-Border Currency and Monetary Instruments Reporting can be found at www.cbsa-asfc.gc.ca/menu/D19-e.html. Accessed August 2004.

AUSTRAC Annual Report. 2002-2003. Available at www.austrac.gov.au. www.ncis.co.uk. Accessed September 2004.

Burbidge, N.W.R. (2004). International Anti-Money Laundering And Anti-Terrorist Financing: The Work of the Office of the Superintendent of Financial Institutions in Canada. Journal of Money Laundering Control, 7(4) 320-332.

Backgrounder on the New Proceeds of Crime (Money Laundering) Act. www.fin.gc.ca/news99/data99-109_1-eng.asp. Accessed in August 2004.

Canada's FATF Self Assessment Response - 2001.

Canada's FATF Self Assessment Response - 2002.

Canada Gazette, SOR/2003-Extra Vol. 137 (2), available at www.canada.gc.ca/gazette. Accessed in August 2004.

CBSA (February 2004). Cross-Border Currency and Proceeds of Crime Reporting. Intelligence Analysis Section, Intelligence and Risk Management Division, Customs Contraband, Intelligence and Investigations. Available at www.cbsa-asfc.gc.ca/newsroom/prosecutions/bc/0213surrey-e.html. Accessed in April 2005.

CBSA (August 2004). Canada's National Initiative to Combat Money Laundering and Terrorist Financing. 1999-2004. Immigration Intelligence Perspective.

CBSA (August 2004). Cross-Border Currency Reporting Program: NICML Evaluation, CBCR Program Information. Specific Report: National Initiative to Combat Money Laundering.

CBSA (2004). Customs Investigations Involvement in Currency Reporting Offences. Document provided to EKOS by CBSA in support of information provided in interview.

CCRA (2003) Mechanisms and Forms of Controlling Money Laundering Paper presented at Inter-American Center of Tax Administrations - CIAT: Theme: "Key Aspects in Control Actions of the Tax Administrations" (Sic). Lisbon, Portugal: September 29-October 2, 2003.

CFSEU information obtained at www.cfseu.org/sitefactscfseu.htm. Accessed in August 2004.

www.ci.gc.ca/cicexplore /english/pubs/visa/6-5/art_016.htm. Please note, this website is not accessible to the public. It is CIC's internal website.

www.ci.gc.ca/cicexplore /english/pubs/iss6-4/art_013.htm. Please note, this website is not accessible to the public. It is CIC's internal website.

CISC information obtained at

www.cisc.gc.ca/media2004/factsheet_e.pdf. Accessed in August 2004.

CISC 2004 Annual Report. Available at www.cisc.gc.ca. Highlights of the report available at

www.cisc.gc.ca/media2004/newsrelease_e.pdfand



www.cisc.gc.ca/media2004/reporthighlights_e.pdf. Accessed in August 2004.

Criminal Intelligence Service Canada: 2004 Fact Sheet

www.cisc.gc.ca/media2004/factsheet_e.pdf. Accessed Sept. 2004.

Colapinto, R. (May 2004). The Clean-Up Act. Article obtained at www.camagazine.com/index.cfm/ci_id/20878/la_id/1.htm. Accessed August 2004.

CTIF (2002-2003) 10th Annual Report 2002-2003. Available at

www.ctif-cfi.be/en/ar/ar02-03/stat.pdf. Accessed August 2004.

Desjardins, J., (June 18, 2003). Presentation of the Proceeds of Crime (Money Laundering) and Terrorist Financing: The Act, Regulations and Related Issues.

Efforts to Continue To Combat Terrorist Financing. www.fin.gc.ca/news01/01-106-eng.asp. Accessed August 2004.

Egmont Group (June 2001). 100 cases from the Egmont Group: FIU's in action. Available at

www.gfsc.guernseyci.com/documents/fiu_in_action_full.pdf. Accessed in Sept. 2004.

Egmont Group (April 2002). 20 cases from the Egmont Group. Available at

http://www.ctif-cfi.be/en/typo/egm/20casesgb.PDF. Accessed August 2004.

FATF (February, 2001). Report on Money Laundering Typologies 2000-2001.

FATF (2001). Report by Canada on Money Laundering And Terrorist Financing Typologies. FATF 2001 Typologies Exercise, November 19-20, 2001 Wellington New Zealand.

FATF (February, 2002). Report on Money Laundering Typologies 2001-2002.

FATF (2002). Canadian Submission to FATF Typologies Meeting, November 19-21, 2002 Rome, Italy.

FATF (June 2002). Annual Report 2001-2002.

FATF-XIV Typologies Exercise (2002-2003), Compilation of Country Submissions: Part 12.

FATF (February 2003). Report on Money Laundering Typologies 2002-2003.

FATF (2003-2004). FATF-XV Typologies Exercise, (2003-2004), Compilation of Country Submissions: Part 8.

FATF (June 2003). Annual Report 2002-2003.

FATF (June 2003). New Anti-Money Laundering Standards Released.

FATF (June 2003). The Forty Recommendations.

FATF (March, 2004). Report on Money Laundering and Terrorist Financing Typologies, 2003-2004.

FATF (July, 2004). Annual Report 2003-2004.

FATF (Plen/27). Summary Record of the Meeting of the FATF Plenary 9-11 October 2002.

FATF-XII/ (Plen/48.REV1). Analysis of the 2000-2001 Self-Assessment Exercise.

FATF-XIV (Plen/48). The 2002-2003 Self-Assessment Exercise: Analysis of Compliance with the FATF Forty Recommendations for FATF Members. Annex A.

FATF-XIV (Plen/49). The 2002-2003 Self-Assessment Exercise: Analysis of Compliance with the Special Recommendations on Terrorist Financing for FATF Members.

FATF-XIII (Plen/53). Analysis of the 2001-2002 Self-Assessment Exercise: The FATF Forty Recommendations.

FATF-XIV (Plen/59). The Future of the FATF: Discussion notes by the Incoming President.

FATF: Basic Facts bout Money Laundering. Available at www1.oecd.org/fatf/Mlaundering_en.htm

Federal Action Against Organized Crime. Available at http://www.canada.justice.gc.ca/en/news/nr/2000/doc_25605.html. Accessed Sept. 2004.

FINTRAC (March 31, 2002). Annual Report (2000-2002).

FINTRAC (August 2002) to the Real Estate Council of Ontario. The Importance of Reporting Suspicious Transactions. Available at www.reco.on.ca/news_newsrelease_aug20_02.htm.

FINTRAC (2003). Performance Report for the Period Ending March 31, 2003. Also available at www.fintrac.gc.ca/publications/dpr/2004/4_e.asp. Accessed April 2005.

FINTRAC (2003). Performance Report, for the period ending March 31, 2003. Annex 2. Available at www.fintrac.gc.ca/publications/dpr/2003/4_e/.asp. Accessed August 2004.

FINTRAC (2003). Annual Report 2003.

FINTRAC's News Releases (July 2004). OSFI and FINTRAC to Join Forces Against Money Laundering and Terrorist Laundering and Terrorist Financing. www.canafe.gc.ca/publications/nr/2004-07-08_e.asp. Accessed August 2004.

FINTRAC News Releases (2001). FINTRAC Receives Increased Funding to Combat Terrorist Financing. Available at www.fin.gc.ca/news01/01-094-eng.asp. Accessed August 2004.

FINTRAC (July 2004). Overview of FINTRAC. PowerPoint Presentation deck.

FINTRAC (July 2004) Presentation on mechanisms and methods to inform, produce and disseminate quality financial intelligence, and obtain feedback on it. PowerPoint presentation deck.

FINTRAC (2004). FINTRAC's National Compliance Program. PowerPoint presentation deck.

FINTRAC (2004). Presentation to EKOS on August 5, 2004.

FINTRAC. A Historical Chronology. Document provided to EKOS for research purposes.

FINTRAC. A list of "appropriate" Law Enforcement agencies in contact database. List provided to EKOS for research purposes.

FINTRAC. Guide to Determining the Appropriate Police Force(s).

FINTRAC Detecting and Deterring Money Laundering and Terrorist Activity Financing.

FINTRAC disclosures received by CRA: Summary of Activity to February 4, 2004. Data provided to EKOS by the CRA Anti-Evasion Division. Investigation Directorate.

National Post, April 01, 2004. Humphreys, A. Police "losing War" on Dirty Money: Criminals using banks, other institutions to launder money RCMP probe finds.

Government Amends Anti-Money Laundering Regulations Affecting Legal Professionals available at www.fintrac.gc.ca/news03/03-20e. Accessed April 2005.

Harvey, J. (2004). Compliance and Reporting Issues Arising for Financial Institutions from Money Laundering Regulations; A Preliminary Cost Benefit Analysis. Journal of Money Laundering Control, (7) 4, 333-346.

Hubbard, R., Murphy, D., Odonnell, F., & DeFreitas, P (2004). Money Laundering and Proceeds of Crime. Toronto: Irwin Law Inc.

IBETS information obtained at www.rcmp-grc.gc.ca/security/ibets_e.htm. Accessed August 2004.

IMETS information obtained at www.rcmp-grc.gc.ca/fio/imets_e.htm. Accessed August 2004.

INSET information obtained at www.rcmp-grc.gc.ca/securtiy/insets_e.htm. Accessed April 2005.

International overview page. Available at www.fincen.gov/int_main.html. Accessed August 2004.

International Monetary Fund and the World Bank (March 10, 2004). Twelve-Month Pilot Program of Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT) Assessments: Joint Reports on the Review of the Pilot Program. Available at www.imf.org/external/np/aml/eng/2004/031004.htm. Accessed September 2004.

International Monetary Fund (April 2, 2004). IMF Executive Board Reviews and Enhances Efforts for Anti-Money Laundering and Combating the Financing of Terrorism. Public Information Notice (PIC) no 04/33. Available at www.imf.org/external/np/sec/pn/2004/pn0433.htm. Accessed in August 2004.

Intscher, H. (September 8, 2003). Following the Money Trail: Enhancing the Contribution of Financial Intelligence to Counter Terrorism. Address presented at the 21st Cambridge International Symposium on Economic Crime.

Introduction to Organized Crime. Available at http://www.psepc-sppcc.gc.ca/policing/organized_crime/index_e.asp. Accessed Sept. 2004.

Ipsos Reid (April 2004). Tracking Public Perceptions Surrounding Money Laundering. Document provided by FINTRAC.

KPMG (August 2004). Global Anti-Money Laundering Survey 2004: How Banks are facing up to the Challenge. Available at http://kpmg.ca/en/news/pr20040920.html. Accessed September 2004.

KPMG (July 1, 2003). Review of the Regime for Handling Suspicious Activity Reports. Available at

www.ncis.co.uk/downloads/kpmgreport.pdf. Accessed August/Sept. 2004.

Letter from CSIS (2003). Please note that information provided in letter is marked SECRET.

Mayer, S.R. (June 2003). Will Privacy Patchwork Quilt be Wedding Rings or Log Cabins Design? The Lawyers weekly (pp. 16 and 17).

http://www.grantthornton.ca/fais/articles/Fiddian-Green_06-20-03.pdf. Accessed Sept. 2004.

Murphy, D.P. (2003). International Developments Surrounding the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Meredith Lectures 2002. (1-34). Quebec: Les Édition Yvon Blais Inc.

Notes for a Statement by the Honorable Lawrence Macaulay Solicitor General of Canada. (DRAFT III). Document provided by Public Safety and Emergency Preparedness Canada.

Office of the Auditor General (2003). Canada's Strategy to Combat Money Laundering April 2003 Report - Chapter 3. Available at www.oag-bvg.gc.ca/domino/reports,nsf/html/20030403ce.html. Accessed August 2004.

Office of the Superintendent of Financial Institutions (July 2004). Draft Guidelines: Deterring and Detecting Money Laundering and Terrorist Financing. Available at www.osfi-bsif.gc.ca. Accessed Sept. 2004.

Organized Crime Impact Study Highlights. Available at www.psepc-sppcc.gc.ca/publications/policing/1998orgctim_e.asp. Accessed April 2005.

PCO (2002). Departmental Performance Report. Available at www.pco-bcp.gc.ca/default.asp?Language=E&page=publications&doc=dpr-rrm2002/dpr-rrm2002-chap2_e.htm. Accessed August 2004.

www.psepc-sppcc.gc.ca/policing/organized_crime/FactSheets/money_laundering_e.asp

Proceeds of Crime (Money Laundering) and Terrorist Financing Act. Available at www.fintrac.gc.ca/act-loi/1_e.asp. Accessed August 2004.

Proceeds of Crime. Available at www.rcmp-grc.ca/poc/proceeds_e.htm. Accessed April 2005.

Progestic International Inc. (October 2002). Report on the Development of a Risk Management Framework.

Public Safety Act 2002 Improves Legislative Framework To Fight Terrorism and Protect Public Safety available at www.psepc.gc.ca /publications/news/20020429_2_e.asp.

RCMP (2000-2001). Money Laundering in Canada. Paper prepared by the RCMP Proceeds of Crime Branch. Submitted to the Financial Action Task Force on Money Laundering 2000-2001 Typologies exercise.

RCMP Criminal Intelligence Directorate (10-10-2003). Project Stack: An investigator's handbook on the use of hawalas - a from of alternative remittance and underground banking - in Canada.

RCMP (2002-2003) Performance Report 2002-2003. Available at www.rcmp.ca. Accessed Sept. 2004.

RCMP (2004). Canada's National Initiative to Combat Money Laundering and the Royal Canadian Mounted Police: Update and Objectives.

RPP 2003-2004-Financial Transactions and Reports Analysis Centre of Canada. Available at www.tbs-sct.gc.ca/est-pre/20032004/FINTRAC-CANAFE/FINTRAC-CANAFEr34_e.asp#442_ii. Accessed Sept. 2004.

Schneider, S. (March 2004). Money Laundering in Canada: An Analysis of RCMP Cases. Nathanson Centre for the study of Organized Crime and Corruption.

Sheppard, C.A., (2003). Professional Secrecy, Terrorism and Money Laundering, (49 - 111). Meredith Lectures 2002. Quebec: Les Éditions Yvon Blais Inc.

Statement of William J. Fox. Director Financial Crimes Enforcement Network. United States Department of the Treasury before House Committee on Financial Services Subcommittee on Oversight and Investigations. June 16, 2004. Available at

www.financialservices.house.gov/media/pdf/061604wf.pdf. Accessed April 2005.

Standing Committee on Finance; 37th Parliament, 2nd Session. Tuesday, May 27th, 2003. Document is available at www.parl.gc.ca/InfoCom/PubDocument.asp?DocumentID=938038&Language=E.

Speaking notes for the Honorable Elinor Caplan, Minister of National Revenue to the Association of Supply Chain and logistics special industry Luncheon. Border States from Coast to Coast. Toronto, Ont. Sept. 3, 2003.

Sussex Circle Inc. (July, 2003). FINTRAC Law Enforcement Consultation. Key findings. PowerPoint Presentation deck.

TCI Management Consultants (July 2003). Methodologies for Measuring the Impacts of Organized Crime-related Money Laundering Activities on Canada: Phase II of a III-Phase Undertaking. Final Report.

U.S. Government (2003). 2003 National Money Laundering Strategy. Available at

www.ustreas.gov/press/releases/reports/js10102.pdf. Accessed Sept. 2004.

Washington Post (July 2004) Day, K and O'Hara T. Obstacles Block Tracking of Terror Funding. Available from http://www.washingtonpost.com/wp-dyn/articles/A48391-2004Jul13.html. Accessed September 2004.

What is Terrorist Financing? Available at www.fintrac.fc.ca/fintrac-canafe/definitions/money_e.asp. Accessed August 2004.

Working together to Combat Organized Crime: A Public Report on Actions under the National Agenda to Combat Organized Crime. Available at http://www.psepc.gc.ca/publications/policing/combat_org_crime_e.asp. Accessed Sept. 2004.

Key Websites

http://www.fintrac.gc.ca

http://www.rcmp-grc.gc.ca

http://www.cbsa.gc.ca

http://www.justice.gc.ca

http://laws.justice.gc.ca/en/p-24.501/93840.html (PCMLTFA legislation).

http://www.psepc-sppcc.gc.ca

http://www1.oecd.org/fatf

http://www1.oecd.org/fatf/Ctry-orgpages/ctry-ca_en.htm (Canada's FATF page).

Media Review References

Press Clippings

FINTRAC

http://www.canafe.gc.ca/publications/nr/2004-07-08_e.asp

http://www.fintrac.gc.ca/publications/nr/2003-09-10_e.asp

Department of Finance

http://www.fin.gc.ca/news03/03-020-eng.asp

Canada Border Services Agency

http://www.cbsa.gc.ca/newsroom/releases/2003/jan/currency-e.html

General Media Article Sources

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Appendix F: Distribution of Interviews Conducted

Distribution of Interviews Conducted

• FINTRAC Management and Staff (n=7)
  • Senior Managers (n=5)
  • Compliance Managers and Assistant Director (n=2)
• Initiative Partner Departments/Agencies (n=19)
• • Department of Finance (n=4)
  • Canada Border Services Agency - Customs Contraband, Intelligence and Investigations Branch (n=2)
  • Canada Border Services Agency - Intelligence and Risk Management Division, Enforcement Branch (n=4)
  • Canada Border Services Agency - Immigration Intelligence (n=2)
  • Canada Revenue Agency (n=3)
  • Royal Canadian Mounted Police (RCMP) (n=3)
  • Department of Justice/Attorney General (n=1)
• Other Potential/Interested Federal Partners (n=5)

• International Partners (n= 4)

• Law Enforcement/Security Agencies (n=6)

• Federal Regulator of Financial Institutions and Reporting Entities in the Financial Sector (n=6)

• Experts (n=3)

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Appendix G: Recommendations of the
Three-Year (Interim) Evaluation of the
National Initiatives to Combat Money Laundering (NICML)

Recommendations of the Three-Year (Interim) Evaluation of the National Initiatives to Combat Money Laundering (NICML)^[16]

1. The benefit of future consultations with reporting entities could be maximized by considering which levels of consultation - national, provincial, or regional - would best serve the intended outcomes (page 14).

2. There is value in reconsidering the approach to communication with the general public. More traditional venues for sharing information, e.g., posters, pamphlets, and advertisements, could have a greater immediate impact (page 17).

3. There may be value in establishing some forum through which Initiative-wide and operational issues can be dealt with. This committee could also serve in a coordination role with the chair rotating across the partnership on a scheduled basis (page 17).

4. It is recommended that the RCMP implement an efficient, coordinated, and compatible tracking system for inputting, maintaining, and retrieving FINTRAC disclosure data. This should be undertaken in a timely manner to ensure that disclosure data is available for the five-year evaluation (page 20).

5. It is recommended that CIC further develop its existing action plan for the implementation of its Initiative responsibilities for the remaining two years (page 23).

6. It is recommended that each partner undertakes in a timely fashion a review of their present data-collection capabilities to ensure mechanisms are in place to efficiently capture the necessary information required for the year-five evaluation as identified in the Initiative Logic Model. These mechanisms will need to be designed to allow efficient data retrieval for subsequent analysis and reporting purposes (page 25).

7. Within the confines of the legislation, viable and effective mechanisms for FINTRAC to access the information and expertise available from partner agencies should be identified and implemented, where legally possible (page 29).

 

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Appendix H: Indicators of Co-operation Among Federal and International Partners of the Initiative

Indicators of Co-operation Among Federal and International Partners of the Initiative

1. Indicators of Information-sharing and Co-operation Among Federal Partners

• Many of the websites of the Initiative partners, particularly FINTRAC, Finance, RCMP, and PSEPC, provide information on money laundering and terrorist financing, which partners and stakeholders can consult.
• Many disclosure recipients have provided FINTRAC with feedback on disclosures.
• RCMP
• participated in 173 outreach information sessions with reporting entities/private sector and training sessions with CBSA regional intelligence officers (the latter to enhance CBSA knowledge on ML issues at border points). CBSA intelligence officers in Toronto, Niagara and Ottawa, and Windsor intelligence officers received training, while sessions in B.C. and PEI training sessions are still under negotiation. CBSA Adjudicators in Ottawa were also provided with training by RCMP.^[17] Various sections of the RCMP, as well as outside agencies and members of the private sector (e.g., the Canadian Bankers Association, Casinos, Real Estate Boards, and businesses selling automobiles, jewellery, furs, and other high-price items) were among the groups who received such training.^[18] In addition, the RCMP offers POC courses to all Initiative partners.
• RCMP launched the national Merchants Against Money Laundering campaign in February, 2004. While not funded under the Initiative, this campaign is expected to contribute to the same long-term expected outcome, that of reducing money laundering. The Program is intended to solidify partnerships with businesses from non-bank financial sector, including reporting entities like money services bureaus and credit unions, which are often targeted by criminals. The main goal of information sessions is to encourage these businesses to implement due diligence procedures to help combat ML.^[19]
• CBSA - Immigration organized 14 information sessions, workshops, training sessions etc. with partners to facilitate networking and collaboration.
• FINTRAC has made 301 disclosures to CSIS, CBSA-Immigration, RCMP, other law enforcement agencies, and other organizations.
• FINTRAC has given presentations on the Initiative to senior officials in key partner and stakeholder departments/agencies (e.g., CSIS, CRA, RCMP, Finance, CBSA).
• FINTRAC has senior level representation on the National Coordinating Committee on Organized Crime (an Assistant Deputy Minister (ADM) level committee consisting of senior officials from both levels of governments as well as the law enforcement and intelligence communities) and the Federal ADM Public Safety Committee. FINTRAC has made presentations about the Centre and provided progress reports to these bodies on numerous occasions.
• FINTRAC has made 140 presentations and provided information to its law enforcement partners and other recipient organizations to ensure an understanding of the Centre's analytical processes, the source/value of information (disclosures) it provides, and the procedure involved in obtaining a court order for information over and above the information in disclosures.
• FINTRAC has participated in over 500 outreach activities with reporting entities and their industry and regulatory representatives to increase understanding of and compliance with the Initiative and its regulations and reporting and record-keeping requirements, as well as to demonstrate the value of their reports to the Centre.
• FINTRAC has concluded two memoranda of understanding (MOUs) with regulatory bodies, specifically the federal regulator of financial institutions (OFSI) and a provincial regulator of casinos (BCPEB), with several more MOUs with industry regulators about to be signed. The purpose is to enhance information-exchange and compliance.
• CRA participates on a steering group with FINTRAC, which meets twice yearly, to share information, track referrals and discuss related matters in the area of ML/TF.
• Finance Canada participates in an interdepartmental working group with federal partners.
• PSEPC heads up the National Coordinating Committee on Organized Crime (NCCOC) (along with a provincial representative) and the ADM Public Safety Committee.
• FINTRAC has negotiated access to the Canadian Police Information Centre (CPIC), the national database maintained by the RCMP and used by all law enforcement agencies across Canada, in order to enhance the Centre's analytical capability. Negotiations have begun to sign MOUs for access to other key police databases such as those maintained by the RCMP, Metro Toronto police force, Service de Police Ville de Montreal (SPVM), Organized Crime Agency (OCA), Ontario Police Technology and Information Cooperative (OPTIC).^[20]
• FINTRAC received 864 voluntary disclosures from the police, public, CSIS, CBSA and other agencies (including foreign FIUs).
• CBSA made 79 voluntary disclosures to FINTRAC.
• CRA works closely with law enforcement in RCMP IPOC Units on ML/TF issues as they pertain to taxes evasion.
• Under the terms of an informal between the RCMP and CBSA, RCMP ML units respond to money laundering intelligence provided to them by the CBSA. In 2003, units were called out to a border point by CBSA 82 times.
• CBSA-Customs and CRA signed a MOU, in March 2003, to confirm and revitalize partnership in dealing with examination and entry of people into Canada. This updates the original MOU signed in 1983.^[21]
• CBSA - Customs Investigations participated in two pilot projects to offer their expertise in customs investigations and enterprise crime (one project with IPOC units and one with the RCMP's Financial Intelligence Branch).
• CRA collaborates with the RCMP, which passes on leads (that it cannot pursue) to CRA.
• CIC and RCMP signed a MOU in December 2002 to formalize and strengthen their existing partnership and to share best practices in enforcing the Immigrant and Refugee Protection Act.^[22]

2. Indicators of Cooperation with International Partners/Stakeholders

• FINTRAC is a member of the Egmont Group of FIUs (one of 94 such members), playing a significant role in the organization, as the following indicates:

• Canada is a charter member of FATF and plays a key role in that organization.

• FINTRAC signed information-exchange MOUs with the FIUs of 10 countries: Australia, Barbados, Belgium, Italy, Mexico, the Netherlands, Portugal, South Korea, the United Kingdom and the United States.^[25]

• FINTRAC has hosted visits from over 36 international delegations.
• FINTRAC is represented on the Canada-U.S. Border Crime Forum. Created in 1997 to provide a regular avenue for better communication on transnational crime problems, the Forum examines issues such as ML, telemarketing fraud, and high tech crime.^[27]
• RCMP responds to foreign agencies' requests for training and assistance regarding detecting and deterring money laundering and terrorist financing.

• CRA is involved in the OECD Committee on Fiscal Affairs Working Party 8 sub-group, which is encouraging cooperation among different countries' tax administrations and FIUs (e.g., at a 2002 meeting with FATF in Rome, they discussed indicators of money laundering, tax evasion schemes and the commonalties between the two).
• CBSA - Immigration Intelligence has shared information and lessons learned with visiting officials from Australia, New Zealand, the United States, Ireland and the metropolitan police of London, UK.
• CBSA - Customs is in discussions with US Customs Border Protection (CBP) about the possibility of sharing certain financial reporting information and CBSA currency seizure information. The CBP and CBSA Legal Services are working together towards signing an MOU for an exchange of cross-border currency reports data and possible amendments to Proceeds of Crime (POC) legislation in Canada, in order to address the sharing of seizure data too. This need has arisen due to the request by the CBP for currency and monetary instrument seizure information on US citizens for prosecutorial and follow-up investigations.^[29]
• CBSA has provided training sessions to a variety of agencies at international level. Some examples include: Moscow ICO 2001; Hong Kong ICO 2001; US Embassy and CIA 2003; and Canberra MIO 2004.^[30]
• Finance has participated in a number of international fora and the development international standards with respect to fighting ML and TF, including:

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Appendix I: International Comparisons

Appendix I: Anti-Money Laundering/Terrorist Financing in Canada and Other Countries

ISSUE	Canada	Australia	United Kingdom	United States
Name of FIU	Financial Transactions and Reports Analysis Centre of Canada (FINTRAC)	Australian Transaction Reports and Analysis Centre (AUSTRAC)	Financial Intelligence Division of the National Criminal Intelligence Service (NCIS)	Financial Crimes Enforcement Network (FinCEN)
Founding legislation	Original PCMLA enacted in 1991; PCMLTFA implemented in stages from November, 2001 to March 31, 2003.	Financial Transaction Reports Act, 1988 (FTR)	Money Laundering Regulations, 1993; Proceeds of Crime Act enacted in 2003/04**	Financial Record Keeping and Reporting Currency and Foreign Reporting Act (Bank Secrecy Act - BSA) enacted in 1970.
Location of FIU within Government	Independent body, which operates at arm's length from law enforcement in consideration of the Charter and privacy concerns.	AUSTRAC is a prescribed authority within the Australian Government's Attorney General Portfolio.	The Financial Intelligence Division is located within NCIS, a non-departmental public body under the authority of the UK Home Office.	Under Treasury Department authority.
Reporting: Transactions that must be reported	Suspicious Transaction Reports (STRs) related to Money Laundering and Terrorist Financing Activities Large Cash Transaction Reports (LCTRs) of $10,000 or more International SWIFT Electronic Funds Transfers (EFTs) of $10,000 or more and non-SWIFT EFTs of $10,000 or more Cross Border Currency Reports (CBCRs) of $10,000 or more	Suspicious transactions a cash dealer has reasonable grounds to believe are relevant to tax evasion laws, investigation, or enforcement of crime Significant cash transactions of AU$10,000 or more or the foreign currency equivalent; Cash transfers or international wire transfers into and out of Australia.	All reports are considered to be SARS (no specific breakdowns are available).	Suspicious Activity Reports (SAR), financial institutions have to report if the institution knows, suspects or has reason to suspect that funds were derived from illegal activities or is intended for and/or to hide illegal purposes; Currency Transaction Report (CTR) for currency transactions of US$10,000 or more; Currency of Monetary Report (CMIR) for cash values or monetary instruments worth US$10,000 or more being transported across the border; Foreign Bank Accounts Reports (FBAR) file by persons subject to US jurisdiction having interest in or authority over a foreign bank account in excess of US$10,000.
Manner in which reports are made	99% of all reports are received electronically	99% of all reports are received electronically.	Reports are received in paper and electronic format. The money.web system is a new electronic reporting database recently introduced, which will make electronic reporting even easier.	Reporting regime is still largely paper-based but the BSA Direct initiative, scheduled to be completed by October 2005, will greatly facilitate electronic reporting.
Partners have direct access to FIU database?	No. This is the case due to Charter and privacy laws	Yes. AUSTRAC provides the Australian Tax Authority and specified law enforcement agencies with general and specific access to its database.	Yes. Law enforcement agencies have access to a new system called money.web, which stores the SARS that have been made electronically.	Yes. FinCEN provides law enforcement agencies with direct access to its database.
Number of reports received by FIU	9.5M in 2003/04 (all types of reports)	10.8M 2003/04 (all types of reports)	Information not available in the 2002/03 NCIS annual report**.	FinCEN: numbers not available. There is no readily-accessible source to all types of reports for any particular year.
Number of disclosures	In 2002-2003, 103 disclosures were made to various partner agencies.	In 2002/03, 999 financial intelligence assessments were compiled. Of those, 650 assessments were prepared for use by partner agencies****.	Information was not available in the 2002/03 NCIS annual report.	At present, information on the number of disclosures is not available.
Funding for FIU	In 2002/03, FINTRAC received $26.3 M for ML activities and $14.7 M for TF activities	In 2004/05 AU$20.8M	Information not available.	US$51.4 M in 2002/03; US$57.2M in 2003/04; and is expected to receive US$64.5M in 2004/05.
* AUSTRAC also generates resources from the "sale of assets", interest payments and other contributions. ** NCIS website: www.ncis.co.uk. NCIS. Annual Report: A Year in the Fight Against Serious and Organised Crime - 2002-2003. *** Information derived from: FINCEN (Dept. of Treasury). October 2002. Report to the Congress: Use of Currency Transaction Reports. Available at Note: to read the PDF version you need Adobe Acrobat Reader on your system. If the Adobe download site is not accessible to you, you can download Acrobat Reader from an accessible page at: http://www.adobe.com/products/acrobat/alternate.html. If you choose not to use Acrobat Reader you can have the PDF file converted to HTML or ASCII text by using one of the conversion services offered by Adobe at http://www.adobe.com/products/acrobat/access_onlinetools.html. To view the RTF version, use the document conversion features available in most modern word processing software, or use a file viewer capable of reading RTF. www.fincen.gov/section366report.pdf. FINCEN (May 2004). The SARS Activity Review: By the Numbers. Issue 2. Available at Note: to read the PDF version you need Adobe Acrobat Reader on your system. If the Adobe download site is not accessible to you, you can download Acrobat Reader from an accessible page at: http://www.adobe.com/products/acrobat/alternate.html. If you choose not to use Acrobat Reader you can have the PDF file converted to HTML or ASCII text by using one of the conversion services offered by Adobe at http://www.adobe.com/products/acrobat/access_onlinetools.html. To view the RTF version, use the document conversion features available in most modern word processing software, or use a file viewer capable of reading RTF. www.fincen.gov/bythenumbersissue2.pdf. **** These disclosures do not include the number of times a LE Agency has accessed STRS/SARS directly from the database. *****KPMG Forensic (July 1, 2003). Review of the Regime for Handling Suspicious Activity Reports. ****** Information derived from Statement of William J. Fox., Director FINCEN. United States Department of the Treasury before House Committee on Financial Services Subcommittee on Oversight and Investigations. June 16, 2004. Available at Note: to read the PDF version you need Adobe Acrobat Reader on your system. If the Adobe download site is not accessible to you, you can download Acrobat Reader from an accessible page at: http://www.adobe.com/products/acrobat/alternate.html. If you choose not to use Acrobat Reader you can have the PDF file converted to HTML or ASCII text by using one of the conversion services offered by Adobe at http://www.adobe.com/products/acrobat/access_onlinetools.html. To view the RTF version, use the document conversion features available in most modern word processing software, or use a file viewer capable of reading RTF. www.financialservices.house.gov/media/pdf/061604wf.pdf. Accessed August 2004.

 

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[1] Information on INSET teams obtained at: http://www.oag-bvg.gc.ca/domino/reports.nsf/html/20030403ce.html [Return]

[2] Information on IMETS obtained at www.rcmp-grc.gc.ca/fio/imets_e.htm. [Return]

[3] Information on INSETS obtained at www.rcmp-grc.gc.ca/fio/imets_e.htm. [Return]

[4] Working together to Combat Organized Crime: A Public Report on Actions under the National Agenda to Combat Organized Crime. Available at http://www.psepc.gc.ca/publications/policing/combat_org_crime_e.asp. [Return]

[5] Introduction to Organized Crime; available at http://www.psepc-sppcc.gc.ca/policing/organized_crime/index_e.asp. [Return]

[6] Information derived from CCRA (2003). Mechanisms and Forms of Controlling Money Laundering. Paper presented at the Inter-American Center of Tax Administrations-CIAT, Technical Conference; theme: "Key Aspects in Control Actions of the Tax Administrations" (sic). Lisbon Portugal, September 29-October 2, 2003. [Return]

[7] Working together to Combat Organized Crime: A Public Report on Actions under the National Agenda to Combat Organized Crime. Available at http://www.psepc.gc.ca/publications/policing/combat_org_crime_e.asp#1. [Return]

[8] http://www.oag-bvg.gc.ca/domino/reports.nsf/html/20040303ce.html [Return]

[9] Information derived from CCRA (2003). Mechanisms and Forms of Controlling Money Laundering. Paper presented at the Inter-American Center of Tax Administrations-CIAT, Technical Conference: Theme: "Key Aspects in Control Actions of the Tax Administrations" (sic). Lisbon Portugal, September 29-October 2, 2003. [Return]

[10] Information derived from FINTRAC Receives Increased Funding to Combat Terrorist Financing. Available at www.fin.gc.ca/news01/01-094-eng.asp. [Return]

[11] Information derived from FINTRAC Performance Report,for the period ending March 31, 2004. Annex 2: Horizontal Initiatives. Available at www.fintrac.gc.ca/publications/dpr/2003/6_e.asp. [Return]

[12] For information regarding the specific Acts that were amended with the introduction of the Public Safety Act, please go to www.tc.gc.ca/mediaroom/releases/nat/2002/02_gc004e.htm. [Return]

[13] Information taken from: Public Safety Act, 2002 Improves legislative framework to fight Terrorism and Protect Public Safety. Available at www.tc.gc.ca/mediaroom/releases/nat/2002/02_gc004e.htm. Bold added to draw attention to those issues/measures of the act that are specifically relevant to current evaluation. [Return]

[14] Information on the Public Safety Act, 2002 derived from Public Safety Act, 2002 Improves Legislative Framework To Fight Terrorism and Protect Public Safety available at www.psepc.gc.ca/publications/news/20020429_2_e.asp. [Return]

[15] Mayer, S.R. (June 2003). Will Privacy Patchwork Quilt be Wedding Rings or Log Cabins Design? The Lawyers weekly (pp. 16 and 17).

http://www.grantthornton.ca/fais/articles/Fiddian-Green_06-20-03.pdf. [Return]

[16] See: ABC Solutions Inc. (February 14, 2003). The National Initiative to Combat Money Laundering: Year Three Evaluation. Page numbers refer to that report. [Return]

[17] RCMP (15-04-2004). Canada's National Initiative to Combat Money Laundering and the Royal Canadian Mounted Police: Update and Objectives. [Return]

[18] RCMP (15-04-2004). Canada's National Initiative to Combat Money Laundering and the Royal Canadian Mounted Police: Update and Objectives. [Return]

[19] RCMP (15-04-2004). Canada's National Initiative to Combat Money Laundering and the Royal Canadian Mounted Police: Update and Objectives. [Return]

[20] RPP 2003-2004-Financial Transactions and Reports Analysis Centre of Canada. Available at www.tbs-sct.gc.ca/est-pre/20032004/FINTRAC-CANAFE/FINTRAC-CANAFEr34_e.asp#442_ii. [Return]

[21] www.cigc.ca/cicexplore /english/pubs/iss6-4/art_013.htm [Return]

[22] www.cigc.ca/cicexplore /english/pubs/visa/6-5/art_016.htm [Return]

[23] FINTRAC (August, 2004). Information received from FINTRAC in response to EKOS query. Please note, FINTRAC indicates that the assistance they provide does not necessarily come through MLAT , but through other means (e.g., directly through international bodies like FATF or Egmont). [Return]

[24] FATF Plenary/ 27 document. Summary Record of the Meeting of the FATF Plenary 9-11 October 2002. [Return]

[25] FINTRAC (2003) Performance Report for the period ending March 2003. This information also obtained through FINTRAC (2004) Communication with EKOS, on a list of documents provided to EKOS for research purposes. [Return]

[26] FINTRAC (2004) Communication with EKOS. This information obtained from a list of documents provided to EKOS for research purposes. [Return]

[27] Information derived from: House of Commons (May 3, 2000). Notes for a Statement by the Honourable Lawrence Macaulay Solicitor General of Canada. (DRAFT III). [Return]

[28] RCMP (15-04- 2004). Canada's National Initiative to Combat Money Laundering and the Royal Canadian Mounted Police: Update and Objectives. [Return]

[29] CBSA (August 2004). National Initiative to Combat Money Laundering. Report prepared for Finance Canada for purposes of this evaluation. [Return]

[30] Information derived from information by CBSA to EKOS for purposes of this evaluation, August 2004. (Immigration Perspective: Other Contributions; Training Awareness, Section 50. [Return]

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