Finance Committee on March 8th, 2011

[Scott Brison, Liberal, Kings—Hants, NS]

I'm not asking you to opine on a specific proposal. But notionally, the idea of having a commensurate level of cooperation with law enforcement agencies under the G-20 could make sense?

[A/Commr Stephen White]

Absolutely. I think any form that would enhance or expand international law enforcement cooperation would be very beneficial.

[Scott Brison, Liberal, Kings—Hants, NS]

The reason why I'm focusing my questions on the multilateral side is that if one jurisdiction is particularly successful in clamping down on this kind of activity, it can simply relocate to another jurisdiction. It's really essential in the long term that any effective long-term action require multilateral collaboration and coordination.

In your views of countries that have in general the best practice models in terms of the resources and the protocols for people like you to do your work, which would you cite as having some particularly good best practices in place that we ought to draw on?

[A/Commr Stephen White]

From a law enforcement financial crime perspective, the countries we regularly deal with--the United States, Great Britain, Australia, and New Zealand--are what I call the like-minded countries. We approach our investigations in a lot of the same ways. Our methodology for investigating is very similar. Also, we do have a very good exchange of ongoing practices, an exchange of information ongoing among those specific countries.

[Scott Brison, Liberal, Kings—Hants, NS]

What about with Latin American countries? Is there one Latin American country in particular that is doing a better job than others?

[A/Commr Stephen White]

I can't say specifically. I haven't looked at Latin America specifically in recent years. We have great cooperation throughout Latin America.

We have a foreign liaison officer program in the RCMP. We have liaison offices based in a number of Latin American countries--in Brazil, Colombia, and Venezuela--and they cover throughout Latin America. I know that the cooperation we regularly get from those countries is fairly good.

[Scott Brison, Liberal, Kings—Hants, NS]

Thank you.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Mr. Brison.

Mr. Carrier, you have five minutes, please.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

I'm going to share my speaking time with my colleague, if there's a little left after I speak.

My question is for Mr. Meunier. One thing intrigued me. Mr. Rosen, a tax expert, testified here. He told us, among other things, that the new accounting standards are international financial reporting standards that have been in place since last year. They have replaced the standards that used to be found in the reports by firms that have to file a public report. He things this is a step backward by 50 years, that it allows firms to conceal a lot of information. I was surprised to learn that, because he blamed parliamentarians for letting all this happen.

Given that you work directly in this area, do you have an opinion on this subject? It intrigues me.

[Denis Meunier]

We are very indirectly connected with this issue. It isn't an issue that concerns us, because it's the reporting entities, specifically the banks, caisses populaires and other financial institutions, that are our sources of information. They have to report suspicious transactions to us and they are obliged to send us reports when the threshold is exceeded or there are wire transfers. We never have access to these companies' books and records. So we receive information from the banks and if they, when they are reviewing loans or mortgages or other things, get hold of this kind of information and it raises a suspicion, they send us reports on it. So we are very indirectly connected with that issue.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Right. I'm going to ask another question right away, because such close tabs are kept on our time that we have to go quickly.

On the list that the HSBC Bank provided of taxpayers who have accounts in Switzerland, there are the names of 1,800 Canadian taxpayers. That was at the end of last year, which corresponded exactly to the beginning of your expanded responsibility in relation to tax evasion. Do you have a mandate to study that list, given that it is a clientele that is an initial target and that has to be analyzed?

[Denis Meunier]

You know that under the legislation I can't comment on specific cases. So I would have to generalize.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

Yes, you can talk about it in general. I just want to know whether you are examining that list. There is concern about it among the public. People are wondering what the government has done in relation to these clients who came to light all of a sudden.

[Denis Meunier]

Take a case where the Canada Revenue Agency or other sources provide us with information about this and our analysis did in fact detect money laundering, that being our mission. If we can then conclude that we have reasonable grounds to suspect there has been tax evasion, we do an analysis and disclose it all to the Canada Revenue Agency.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

So that means that you are not doing the specific analysis of it. It's the Canada Revenue Agency that handles that.

[Denis Meunier]

We would have to receive the information. We have to have names, addresses, etc.

[Robert Carrier, Bloc, Alfred-Pellan, QC]

In any event, I thought that was part of your mandate.

I will let my colleague have the little time I have left.

[Daniel Paillé, Bloc, Hochelaga, QC]

Yes, I want to benefit from your legendary...

Over the two hours we haven't talked about what your relationship might be with the ministère du Revenu du Québec or the Sûreté du Québec. Taxes are collected differently in Quebec from elsewhere in Canada. Do you have a relationship with the Quebec agencies? Do you report to the ministère du Revenu, which will become the Agence du revenu du Québec on April 1?

[Denis Meunier]

We are not entitled to disclose information to the Agence du revenu du Québec. Our legislation does not allow it. We make a lot of disclosures to the Sûreté du Québec, however.

[Daniel Paillé, Bloc, Hochelaga, QC]

For the RCMP, do you have a relationship with the ministère du Revenu or the Sûreté du Québec?

[A/Commr Stephen White]

To my knowledge, we don't have any direct relationship with the revenue agency of Quebec. If we did have any relationship or involvement with them, it would be through the Sûreté du Québec.

I would like to highlight that we have an excellent relationship with the Sûreté du Québec in all of our financial crime programs, whether it's the integrated proceeds of crime and money laundering programs in Montreal, the commercial crime program, or the integrated market enforcement teams in Montreal. In all of those units, we have members of the Sûreté du Québec actually working with us in our offices. It's a very strong relationship.

[The Vice-Chair, Liberal, Massimo Pacetti]

Thank you, Mr. Paillé

Mr. Allen, you have five minutes.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you very much, Mr. Chair. And thank you to our witnesses for being here.

This is a fascinating subject. I wish I had been able to take part in the other meetings the committee had on this as well.

In your report, Mr. Meunier, you talk about sophisticated computer programs and highly trained people. Mr. Brison alluded to this a while ago when he said that we have people sitting behind desks coming up with complicated financial instruments for the movement of this money every day.

I'll throw this to the RCMP as well. What kind of investment do you make each year to maintain these systems? Having done some IT financial work myself, I know it's not easy to keep up on this. Can you talk a little bit about the investment you make each year to keep up? What are the trends? And what training do your people go through each year?

[Denis Meunier]

At FINTRAC, a large amount of the budget is spent on keeping our own IT up to scratch. Also, some of our analysts on the money laundering side are dedicated to basically keeping up with the new technologies that could be used for money laundering and/or new payment methods. Which area do you want me to speak about, the internal or the new payment methods that might be used for money laundering?

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Both, because one has an effect on the other. You have to make the internal changes to your systems to reflect what's going on in the external market.