Finance Committee on March 3rd, 2008

[Janet DiFrancesco]

Not that—

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

That's what we heard about a year and a half ago in this committee, that this is the problem. So just throwing more money at it is not necessarily going to solve the problem. Part of it is the fact that under the legislation by which CRA is governed, it cannot do more than what it can do.

[Janet DiFrancesco]

What I can tell you is that under Bill C-25 there were some important changes to both what FINTRAC can disclose and to the Income Tax Act.

I don't know whether one of my colleagues from the Department of Finance wants to address that any further. But certainly from our perspective we can disclose, I think, the information CRA needs to further their investigations.

They are providing us with more information, and I think we have a working relationship that is growing.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

So Bill C-25 has made a difference, an improvement in terms of...?

I see some heads nodding in the background.

[Janet DiFrancesco]

Absolutely, yes. Absolutely, Bill C-25—

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Would you like more changes to come about?

[Janet DiFrancesco]

Right now FINTRAC is implementing a number of changes related to Bill C-25. We still have a number of changes coming into play in terms of new reporting sectors, of new powers under the proposed AMPs regime, as well as in terms of the MSB registry.

So there are a number of things that are still being implemented. At this point in time, it may be too soon to assess what more could be done, but certainly it's something we'll be looking to in the future.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Okay.

I have a quick last question. Will there ever come a time when we'll be able to know how much money we're getting for this money?

[Janet DiFrancesco]

Do you mean how much value we're getting for this money?

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

How much value or money, the number of arrests, how many people got caught, the underground economy we were able to apprehend—illegal trade, illegal drug traffickers, money launderers.... Are we ever going to have it in black and white?

I understand that some of it is just part of an investigation, and somebody else will want to take credit for it, whether it be CSIS, RCMP, or CRA itself. But are we ever going to have statistics that say “we have had 200 cases, and 100 were justified, and we actually threw people into prison justifiably, and there were another 100 where we were off on a wild goose chase and we destroyed people's lives for nothing”?

[Janet DiFrancesco]

I think it's a very important question and a question that has to be answered in the context of the entire initiative, because as you have indicated FINTRAC has just one very specific role to play.

We actively seek feedback from our partners about the value of our intelligence and how they use it in their investigations. But questions about how many people were arrested, how many charges were laid—

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

We don't see it. I know you see it, but we don't see it. I think that's part of the problem.

[The Chair, Conservative, Rob Merrifield]

I'll let you answer the question, and then we'll move on.

Go ahead.

[Janet DiFrancesco]

What I was going to get to, though, is that part of the performance measurement framework that the Department of Finance is working on with all of the initiative partners will be important to being able to answer some of those questions.

[The Chair, Conservative, Rob Merrifield]

Okay. Thank you very much.

Monsieur Laforest.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you, Mr. Chairman.

Good afternoon.

Earlier, my colleague, Mr. Crête, was trying to understand your role in the investigation underway in Liechtenstein. You answered that it would be difficult for you to take part in it because it was something that came under the purview of the Canada Revenue Agency, and that it was an ongoing investigation.

I would like you to give us other tangible examples. You have also read the article in the newspaper. In Liechtenstein, someone revealed the names of thousands of people with bank accounts. We discovered that money was being laundered there.

To help us gain a better understanding of FINTRAC's role, can you please give us another example of a similar event that occurred, where the investigation has been completed?

[Janet DiFrancesco]

Perhaps I could just talk generally about the role that FINTRAC plays.

As you are probably somewhat aware, we receive reports from financial institutions and intermediaries about large cash transactions, so reports on any cash transaction over $10,000, any international electronic wire transfer over $10,000, as well as reports on suspicious transactions from a wide variety of reporting entities, as we call them, including banks, credit unions, accountants, money services businesses, securities dealers, and the like. We take all of that information, and we have sophisticated systems that allow us to sort and analyze it. We look for patterns of money laundering or terrorist financing. We also look at the information that is provided to us by law enforcement to see if we have information that would help them with their cases.

When I talk about information, FINTRAC takes a lot of time to verify that we are looking at one and the same individual, so that if you are looking at Janet DiFrancesco as a subject of investigation that in fact all of the transactions we're looking at are in fact for the same Janet DiFrancesco. We try to identify new account numbers, new entities that might be associated either through publicly available information, or through information that's available in our database, and we try to expand that network. What we're trying to show law enforcement is a picture that says your target might be Janet DiFrancesco, but we've been able to relate these six other individuals, these other entities, these account numbers at these financial institutions, and you might want to do some more work to see if that leads you where you're going in your investigation.

We hear from law enforcement that this is extremely helpful. It provides them new investigative leads. It provides them potentially new names of targets. It provides them an understanding of how targets are linked in terms of how the money is flowing. It often provides them with information about where money is potentially flowing out of the country. One of the real advantages that FINTRAC has over some of its international partners is that we get international wire transfers. So it also allows us to point them to accounts, or individuals, or entities in other countries that might be involved in facilitating the movement of funds.

Does that help?

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Thank you. That helps me understand things better.

How many people work for FINTRAC?

[Margaret Baxter]

We currently have 320 employees.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Are your operations centralized here in Ottawa, or are they divided among offices in the 10 provinces of Canada?

[Janet DiFrancesco]

All of our tactical and strategical analytical staff are located here in Ottawa, but we do have three regional offices: one in Montreal, one in Vancouver, and one in Toronto. The focus of those regional offices is compliance and outreach with our reporting entities. They're responsible for ensuring compliance with the record keeping and reporting obligations under the legislation. They also have a law enforcement liaison function in the regional offices. So they're working with our law enforcement partners across the country to help them understand our role and what we can do for them.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Are all financial institutions in Canada obliged to cooperate with you?

[Janet DiFrancesco]

All financial institutions that are subject to the legislation are obliged to collaborate. So that includes banks, credit unions, casinos, and securities dealers. They're all obliged to collaborate.

[Jean-Yves Laforest, Bloc, Saint-Maurice—Champlain, QC]

Does that include insurance companies as well?

[Janet DiFrancesco]

Yes, it includes life insurance companies.