US deems Canada ‘major money laundering country’

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Canada has always been particularly sensitive to suggestions that it is soft on crime. Now a March 2019 report by the U.S. Department of State has designated Canada as “major money laundering country” where foreign drug-trafficking gangs seem to be exploiting with impunity its lax law enforcement and soft laws.

Canada finds itself on a short list of countries vulnerable to significant drug money laundering transactions alongside Afghanistan, the British Virgin Islands, China, Colombia and Macau.

“Foreign-generated proceeds of crime are laundered in Canada, and professional, third-party money laundering is a key concern,” the report states. “Transnational organized crime groups and professional money launderers are key threat actors.”

The report says Canada is especially vulnerable to money laundering through casinos, real estate, money services businesses, currency exchanges, wire exchanges, offshore corporations, legal “funnel accounts” and bulk cash and hawala transactions — meaning international exchanges of credit and debt between criminal bankers without money actually crossing borders.

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Weak law enforcement and prosecution is a consequence of Canada’s privacy laws and loopholes.

According to the most recent data, from 2010 to 2014, only 169 charges of money laundering led to convictions in Canada, the report says.

The report notes that Canadian police do not have direct access to the databases of Fintrac, Canada’s financial intelligence agency. Fintrac collects data on suspicious transactions from entities such as banks and realtors (although realtors often do not comply with reporting laws, according to Fintrac).

Canada was also designated as a “major precursor country” for illicit narcotics and a source country for fentanyl.

Meanwhile the federal government’s proposed a new anti-money laundering task force in the federal budget to crack down on real estate-, casino-and trade-based money laundering, especially in high-risk areas such as Vancouver, Toronto and Montreal is expected to blunt the US assessment slightly.

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But it be a while before Canada earns the reputation for being tough on financial crime and on crime generally and finds itself viewed favourably by law enforcement agencies around the world. -CINEWS

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