Finance Committee on Oct. 31st, 2006

[Diane Lafleur]

I can't answer that question. That's a question for the Senate.

[John McCallum, Liberal, Markham—Unionville, ON]

I guess you can't answer that question, but they seem to think there is a need for this.

My next question is this. Senate recommendation 13 is that we give “information only to foreign financial intelligence units in countries which have privacy legislation that is consistent with” our own. Is that in the act?

[Diane Lafleur]

What Ms. Ablonczy has already mentioned is that in order to share information with its partners, FINTRAC must enter into a memorandum of understanding that must be approved by the Minister of Finance. One of the key pieces of the memorandum of understanding is to ensure that there are adequate privacy protection provisions that we are comfortable with in the handling of that information if and when it is shared.

[John McCallum, Liberal, Markham—Unionville, ON]

So the bill does not prevent us from entering into divulging information to countries that have privacy legislation substantially weaker than our own. In other words, you have not followed this Senate recommendation. Is that right?

[Diane Lafleur]

If you're asking me if it's actually specifically in the bill, what I'm saying is that there's a memorandum of understanding that must be approved by the minister, and it makes the privacy protection provisions a key component so that the information cannot be shared.

[John McCallum, Liberal, Markham—Unionville, ON]

Last question. Has the Privacy Commissioner been consulted on this bill? If so, do you know what her view is?

[Diane Lafleur]

Yes, she has been consulted. There have been a number of meetings with the Office of the Privacy Commissioner, but I would let her speak for herself.

[John McCallum, Liberal, Markham—Unionville, ON]

Thank you.

[The Chair, Conservative, Brian Pallister]

Thank you very much, sir.

We continue with Mr. Wallace now, for five minutes.

[Mike Wallace, Conservative, Burlington, ON]

Thank you, Mr. Chairman.

Thank you for being here today, panel. I also want to thank you for having a pre-meeting that I went to a few weeks ago. I didn't know anything about the money laundering act, to be frank with you, so that was a good opportunity to get some information.

I just want to be clear. I've heard a number of conversations so far. In this new bill—and maybe you can clarify it for Massimo, who was asking a question and didn't get an answer—we're really making four changes. Isn't it a combination of two acts?

[Diane Lafleur]

I'm not sure what your reference is to four changes.

[Mike Wallace, Conservative, Burlington, ON]

There's the enhancement of sharing of information with FINTRAC, creating the registry, enhanced legislation for identification of clients, and the monetary penalties.

[Diane Lafleur]

At a very high level, those are the key components.

[Mike Wallace, Conservative, Burlington, ON]

The four big things.

[Diane Lafleur]

I think what the honourable member was referring to is the fact that the Proceeds of Crime (Money Laundering) Act was, post-September 11, 2001, amended by the Anti-terrorism Act to add a terrorist financing mandate to FINTRAC's existing money laundering mandate. The Anti-terrorism Act amended the proceeds of crime legislation and renamed it the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.

[Mike Wallace, Conservative, Burlington, ON]

I appreciate that.

Obviously this is going to cost the taxpayer money to implement. There are some changes here to registration systems and so on. Have they been budgeted for, and can you tell me how much money that is?

[Diane Lafleur]

Yes, it was budgeted for. The funds required to implement these initiatives were allocated in budget 2006. That's the $64.4 million over two years that was referred to.

[Mike Wallace, Conservative, Burlington, ON]

So it's already pre-budgeted.

I did ask a question previously, but I don't know if there has been any work on it. One of the major changes is that now that there are only criminal charges if this bill does pass, there will be administrative charges, which are really monetary. Has there been any work on what that means in terms of a minor charge? What's that definition? Do you have any sense of what that might be?

[Vincent Jalbert, Senior Project Leader, Financial Crimes - Domestic, Financial Sector Division, Financial Sector Policy Branch, Department of Finance]

There is a range of infractions that will be part of this monetary system. For example, sir, minor infractions will include failure to keep appropriate records. These will all be established in regulations to be passed later on.

[Mike Wallace, Conservative, Burlington, ON]

So those are the kinds of things that will attract financial penalties, but at present all we have is a criminal opportunity. Is that correct?

[Vincent Jalbert]

That's correct.

[Mike Wallace, Conservative, Burlington, ON]

There are couple of other things, if I have time.

Are wire transfers included in this bill or not? Can somebody explain to me either if they are or they're not, and why?

[Lynn Hemmings]

They are already included in existing legislation, under section 9 of our act. We have the ability to proscribe certain transactions, and currently financial institutions and other financial intermediaries are required to report international wire transfers over $10,000.

[Mike Wallace, Conservative, Burlington, ON]

So they're required to report international stuff, but any domestic stuff is not reportable. Is that correct?

[Lynn Hemmings]

That's correct.