Evidence of meeting #48 for Finance in the 39th Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was lawyers.
A recording is available from Parliament.
Liberal
Massimo Pacetti Liberal Saint-Léonard—Saint-Michel, QC
Thank you.
For CRA, I'm not too concerned with the terrorist financing aspect, but mainly the money laundering, and I think you mainly addressed the charities portion. But FINTRAC mainly analyzes large transactions. What I'm concerned about is the small transactions, where CRA is investigating but needs information from FINTRAC. Is this bill going to help the communication between CRA and FINTRAC?
Director General, Charities Directorate, Legislative Policy and Regulatory Affairs Branch, Canada Revenue Agency
I'm going to ask Denis Meunier to comment on that question.
Conservative
The Chair Conservative Brian Pallister
Unfortunately, Mr. Meunier, there is only a short time for a response, to be fair to other members.
Denis Meunier Director General, Enforcement and Disclosures Directorate, Compliance Programs Branch, Canada Revenue Agency
In answer to your question, we believe that the bill, by expanding the number of data elements that are providing additional designated information in a disclosure, will be helpful to investigative bodies, including the CRA. And certainly--
Liberal
Conservative
The Chair Conservative Brian Pallister
No, I'm sorry, you're out of time, Mr. Pacetti.
We continue now with Monsieur Paquette. Six minutes, Monsieur Paquette.
Bloc
Pierre Paquette Bloc Joliette, QC
Thank you, Mr. Chairman.
Mr. Timmins, in your statement, you said that unregulated reporting entities, including money service businesses and foreign exchange dealers that are not licensed and do not have a formal body overseeing their activities, posed a significant compliance challenge.
Do you have anything specific to suggest to ensure compliance with the legislation? For example, would you suggest that these businesses be regulated? You raise the problem, but you do not suggest any way of correcting it.
Assistant Auditor General, Office of the Auditor General of Canada
Mr. Chair, I said that the bill does address that particular issue. The issue you're alluding to is one we raised at the time of our audit. And as I've indicated in point number 12 of my statement, the bill does appear to address that particular issue, to require registration, so from our perspective the matter has been addressed.
Bloc
Pierre Paquette Bloc Joliette, QC
Thank you.
Mr. Bernier, if I understand rightly, Canadian companies—whether they be insurance companies or banks—with a branch operating in a country that has already adopted standards that correspond to those of the Financial Action Task Force (FATF), are exempted from providing the information from this branch to FINTRAC.
General Counsel, Canadian Life and Health Insurance Association Inc.
Otherwise, the compliance costs would double.
Bloc
Pierre Paquette Bloc Joliette, QC
Of course. However, what guarantee do we have that the various FATF member countries do a proper job of circulating the information? Even if we have to do it Canada too, that does not represent a major investment.
General Counsel, Canadian Life and Health Insurance Association Inc.
Federally chartered life insurers do business in 20 different countries worldwide. If we were required to follow the laws and regulations of 20 countries with respect to client identification or other legal requirements, it would be costly, especially when things are the same from one country to another.
Bloc
Pierre Paquette Bloc Joliette, QC
You say that the members of your association have activities in how many countries?
General Counsel, Canadian Life and Health Insurance Association Inc.
They are active in 20 countries.
Bloc
General Counsel, Canadian Life and Health Insurance Association Inc.
I couldn’t tell you.
FCAC, the Financial Consumer Agency of Canada, is present in 31 countries—at least, that’s what its president told me last week in Vancouver. There are about 100 countries that have adopted FATF’s standards and norms.
Bloc
Pierre Paquette Bloc Joliette, QC
Mr. Fox, you would like to see small sums excluded from the provisions of the bill. What do you consider to be a small sum? I missed that when you made your presentation.
Regional Vice-President Canada, Western Union
About two and a half years ago, our company instituted a policy for a global requirement for identification at $1,000. This is a recommendation of the Financial Action Task Force on Money Laundering, and so we've taken that to heart and applied it across the globe.
Bloc
Pierre Paquette Bloc Joliette, QC
So any sum under $1,000 would be excluded from being reported to FINTRAC, is that right?
Regional Vice-President Canada, Western Union
We keep all of these records and have used them in reporting to law enforcement when requested. However, currently we don't collect identification on transactions below $1,000.
Bloc
Pierre Paquette Bloc Joliette, QC
Thank you.
If I still have a bit of time, I would like to ask Mr. Law a more general question. Under Bill C-25, individuals, entities are also required to report suspicious attempted transactions.
What constitutes a suspicious attempted transaction? Do you already have guidelines for determining what constitutes a suspicious attempted transaction, or would this have to be specified?
Senior Vice-President, Corporate Operations, and General Counsel, Canadian Bankers Association
I'm going to turn this over to Mr. King for a moment, but I think a very beneficial step has been taken in Bill C-25 in the sense that it's been extended to attempted suspicious transactions. We would certainly support that.
In terms of what is meant by a “suspicious transaction”, do you want to give some examples?
Ron King
I think I could answer that question by saying existing legislation, regulation, and guidance provided by FINTRAC provides, from our industry's perspective, adequate guidance on defining what is a suspicious transaction. We've been working with that regime for a number of years and find it quite workable.
Conservative
Conservative
Rick Dykstra Conservative St. Catharines, ON
Thank you, Mr. Chair.
I wanted to ask a couple of questions of Mr. Bernier in regard to two recommendations, just for a bit of clarification.
On the point about foreign subsidiaries of Canadian financial institutions not being obliged to comply with the specified Canadian compliance requirements, if a suspicious transaction or a transaction in question were to occur, how would it then be addressed?