That's right.
Mr. Blackburn.
Evidence of meeting #111 for Finance in the 41st Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was bank.
A recording is available from Parliament.
Evidence of meeting #111 for Finance in the 41st Parliament, 1st session. (The original version is on Parliament’s site, as are the minutes.) The winning word was bank.
A recording is available from Parliament.
Vice-President and Chief Anti-Money Laundering Officer, Canadian Imperial Bank of Commerce
We comply with the regulatory requirements of the jurisdictions in which we operate and, as one of my colleagues mentioned earlier, we are subject to their privacy laws among other regulatory obstacles that will not allow the sharing of information. However, as I mentioned earlier, at CIBC we have a common denominator based on Canadian regulations that we apply across our operations, so if we are to identify any activity, we will report in those jurisdictions.
Conservative
Shelly Glover Conservative Saint Boniface, MB
Very good. I'm sure that applies to all of you, so my question is, and I'm not going to ask all of you, how can we, as a government, help fix that, the fact that the privacy laws sometimes prohibit that information sharing? Aside from TIEAs, is there anything we could be doing better to make sure we get that information flowing?
Conservative
The Chair Conservative James Rajotte
Perhaps we could get one person. Mr. Blackburn, could you respond to that?
Vice-President and Chief Anti-Money Laundering Officer, Canadian Imperial Bank of Commerce
First of all, there are global organizations that allow the sharing of information between regulatory bodies that are established. Canada sits on those organizations, so I believe that sharing is already under way. In addition to that, we spoke of TIEAs earlier, which I think is an appropriate answer.
Conservative
Conservative
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Thank you, Mr. Chair.
Thank you to all the witnesses for appearing today.
To follow up on Mr. Rankin's question, do you have the same policies abroad as you have domestically? Are they identical in nature? I'm talking tax evasion policy. Policy and procedure for your employees, are they the same locally in Canada as you enforce abroad?
Head, Global Anti-Money Laundering Compliance, TD Bank Financial Group
Yes, we have enterprise standards in that regard.
Deputy Chief Anti-Money Laundering Officer, RBC Royal Bank
Yes. As I mentioned earlier, we start with a Canadian standard, use that as a baseline, and build on top of that.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Are they identical standards, as far as your policies and procedures are concerned, in your employees manual, for instance, for senior management, for people who deal with transactions?
Conservative
Senior Vice President and Chief Compliance Officer, Chief Anti-Money Laundering Officer, HSBC Bank Canada
Yes, it would.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Great.
You didn't answer, but would it be to fair to say, Mr. Richard, it's the same?
Vice-President and Senior Consultant, Wealth Management Group, BMO Nesbitt Burns, BMO Bank of Montreal
It would be the same.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
The CBA came here several weeks ago and said, “...member banks have comprehensive governance and compliance regimes to prevent tax evasion”. Would anybody here today disagree with that statement? No?
My simple question is how people do this. How do they use Canadian banks to undertake this type of behaviour without being caught? We've talked about suspicious transactions. We've talked about large cash transactions, which I imagine is the $10,000 route. Is it standard across the board that you report anything over $10,000? Is that fair to say, Mr. Purre?
Deputy Chief Anti-Money Laundering Officer, RBC Royal Bank
Yes, it is. That's the regulatory requirement.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Yes. You would do that in any jurisdiction. What initiates suspicious behaviour? Is it computer algorithms? What is it? You must go through a tremendous number of transactions.
Head, Global Anti-Money Laundering Compliance, TD Bank Financial Group
It's both. I think one of my colleagues said that there is the front line and then there's after-the-fact monitoring. There are activities that occur at the time of the transaction that we may be aware of, that are red flags and may cause us to raise a suspicion. Those front-line folks then take what they have seen and put it in a report called an unusual transaction report. That goes into our financial intelligence unit, and then we investigate further and determine whether an STR, a suspicious transaction report, should be filed. We also have automated monitoring systems, and there are certain things that hit those thresholds, be they jurisdictional or the types and frequency and volume of activity that might come out of a particular account.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Do all the banks here follow the same practice?
For instance, Ms. Hughes, how often would your particular company change your algorithms and your computer-generated...? Obviously they change dramatically.
Head, Global Anti-Money Laundering Compliance, TD Bank Financial Group
Yes, we review them at least on an annual basis. We test them; we don't just change them. We change them based upon where we think they are productive, in terms of providing us with the best information. Then we test below the thresholds to make sure we're not missing anything if we raise those thresholds or change them.
Conservative
Brian Jean Conservative Fort McMurray—Athabasca, AB
Is that how all the banks do it: a yearly review, with changes depending on what's happening in the marketplace?