Evidence of meeting #27 for Finance in the 44th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was rcmp.
A video is available from Parliament.
3:05 p.m.
General Counsel and Vice-President, Canadian Bankers Association
We were given a heads up that it was coming. We weren't given the details of the specific regulations until they were published.
3:05 p.m.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
They were published and then the RCMP gave you briefs that contained evidence that individuals may have been involved in the illegal protest movement. You were then to act based on your legal opinion.
For each one of the briefs provided, did your members have their own independent legal advice, or did they do what the RCMP suggested they do?
3:05 p.m.
General Counsel and Vice-President, Canadian Bankers Association
It was the RCMP that provided the names. The banks looked at those names and compared them with their records and the activities in their records to validate if they made sense.
3:05 p.m.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Did your members freeze every single account for which the RCMP provided evidence?
3:05 p.m.
General Counsel and Vice-President, Canadian Bankers Association
I'd have to get back to you on whether or not there were any accounts that members looked at and said “no”.
3:05 p.m.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Based on the evidence and what I've heard at the last committee meetings, I think you can say that you had the autonomy to say “no”, but I don't think you didn't. In fact, the RCMP's providing evidence was tantamount to these people's bank accounts being frozen. There were very few exceptions to that. Would you agree with that?
3:05 p.m.
General Counsel and Vice-President, Canadian Bankers Association
I would say that it was very challenging to dispute what the RCMP had provided to us.
3:05 p.m.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Basically, even though you had, in legal terms, the autonomy to say “no”, your members didn't, and every account that the RCMP wanted frozen, was frozen. That's generally correct to the 90th percentile or so.
3:05 p.m.
General Counsel and Vice-President, Canadian Bankers Association
I would have to validate the point, but my understanding is that most of them were frozen.
3:05 p.m.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Your members are going to do a legal calculation on this. Could you tell me if, in fact, the bank didn't freeze accounts, they could face significant consequences? Is that correct?
3:05 p.m.
General Counsel and Vice-President, Canadian Bankers Association
I'm sorry. I didn't hear that question.
3:05 p.m.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Sorry.
If the RCMP provided material that the individual should have had their accounts frozen and your member chose not to freeze them, they could face significant consequences, couldn't they?
3:05 p.m.
General Counsel and Vice-President, Canadian Bankers Association
There would be concern about not meeting our legal obligation.
3:05 p.m.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Exactly.
On the other side of that, if they froze an account incorrectly because of the way the proclamation was drafted, there would be no consequences to your members. Is that right?
3:05 p.m.
General Counsel and Vice-President, Canadian Bankers Association
To clarify that point, the members did not want to freeze any accounts they didn't have to, given that we're in the customer business. We don't want to be invoking that obligation in a way that isn't prudent.
3:05 p.m.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Sure. I know that your members want to do the best for their clients.
Looking at this on a strictly legal scoreboard, if, in fact, they illegitimately froze a bank account, they would face serious legal consequences. It's clear from the legislation.
3:05 p.m.
General Counsel and Vice-President, Canadian Bankers Association
Again, I would remind you of the trust our customers place in us to ensure that we fulfill our obligations appropriately.
3:05 p.m.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Right. There were zero consequences if they froze one incorrectly, but if they didn't freeze a bank account, there were serious consequences. If in fact you were doing your risk management, which banks do very, very well, there would have to be a disposition or a bias towards freezing a bank account as opposed to not freezing a bank account.
3:10 p.m.
General Counsel and Vice-President, Canadian Bankers Association
I don't think that's actually the way the risk assessment was done. I think it was trying to respect the spirit of what the intent was and ensuring that we were only freezing accounts on what we understood to be individuals or entities that were engaged in illegal activities.
3:10 p.m.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Yes, but I mean, it's clear that there is a legal bias towards freezing than not freezing, just looking at the legal side of things.
With respect to the information provided by the RCMP to your members, could you provide some explanation as to what was in this bias? For example, would the individual's location, their financial wherewithal, their gender, their race or whether they were indigenous be included?
3:10 p.m.
General Counsel and Vice-President, Canadian Bankers Association
I don't feel comfortable explaining what was provided to us by the RCMP. I think that's better a question for them.
3:10 p.m.
Conservative
Philip Lawrence Conservative Northumberland—Peterborough South, ON
Okay. But you received the information, right?
3:10 p.m.
Liberal
The Chair Liberal Peter Fonseca
We're at time. Thank you, MP Lawrence. I'm sure you'll have another round where you'll have an opportunity.
We are moving to the Liberals.
MP Dzerowicz, you're up for five minutes.
3:10 p.m.
Liberal
Julie Dzerowicz Liberal Davenport, ON
Thank you so much, Ms. Mason. You're doing a wonderful job. Thank you so much for being here today. Thanks for answering all these questions. It sounds like we're almost in a court. We're very curious. You're doing a great job, so thank you.
I want to start off by clarifying, because I want to make sure it's clear in my head, what the banks able were to do with the Emergencies Act that they weren't able to do before that. I think from what I've heard, from what you've said, you were able to freeze accounts without a court order. That's one thing I heard. It also allowed the banks independently to move forward and also do a bit of a review of any type of suspicious activity that might provide enough justification, under the mandate of what we were asking the banks and financial institutions to do, to be able to freeze accounts.
Do I have that right?
3:10 p.m.
General Counsel and Vice-President, Canadian Bankers Association
Partially. We are already able to look for suspicious activity. That's part of the monitoring we do for anti-money laundering under our obligations under the proceeds of crime legislation. It then invokes an obligation to freeze an account if we found something that was in, again, that limited scope of the activities within Ottawa.
So it was actually creating an obligation to freeze, which is different from what we normally have in the AML world.