Evidence of meeting #73 for Finance in the 41st Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was fintrac.
A recording is available from Parliament.
Director, Financial Transactions and Reports Analysis Centre of Canada
Yes, but they are, among others, transfers to humanitarian organizations, since humanitarian aid is indeed provided to Turkey.
NDP
Pierre Dionne Labelle NDP Rivière-du-Nord, QC
Fine. I understand.
You receive approximately 42,000 or 43,000 reports from border services. When people leave the country with $10,000 or more, do you classify those reports according to the destination of those travellers? Do you have an analysis grid for destinations?
Director, Financial Transactions and Reports Analysis Centre of Canada
Not necessarily. This may have been done at the strategic level, but for our part, we follow individual transfers, that is to say transactions between individuals or entities, if companies are involved.
Consequently, the analysis grid is designed based on a certain number of factors and it is adjusted in accordance with the requests we receive. For instance, as I was saying earlier, if the RCMP asked us for information on Gérald Cossette, we would send them only the information that is relevant to its investigation or legal proceedings. In other words, we do not necessarily use all of the available information. It has to raise suspicion of money laundering or terrorism financing.
NDP
Pierre Dionne Labelle NDP Rivière-du-Nord, QC
Out of these 43,000 people, do you think some were headed for countries that are fighting jihad?
Director, Financial Transactions and Reports Analysis Centre of Canada
That is possible, but the transaction itself does not show that.
NDP
Pierre Dionne Labelle NDP Rivière-du-Nord, QC
What elements of the report do you receive from border services?
Director, Financial Transactions and Reports Analysis Centre of Canada
These are reports concerning the individual and the amount. The final destination is not known. Even if a person leaves Canada to go to the United States, it is possible that he or she may then go to many other places in the world. It is impossible—at least for us—to know the traveller's final destination.
NDP
Pierre Dionne Labelle NDP Rivière-du-Nord, QC
My question is for the representative of the Department of Finance.
You said that Canada may freeze assets belonging to groups, persons or entities that support jihad.
What is the value of the assets that have been frozen so far?
Josée Nadeau Senior Chief, Financial Crimes – International, Department of Finance
Good morning. I am going to answer the question.
We do not have that information. In fact, the information is reported to the RCMP or to CSIS, but it is not made public.
NDP
Pierre Dionne Labelle NDP Rivière-du-Nord, QC
If I understand correctly, this information exists, but you do not have it. You transferred it to border services.
Senior Chief, Financial Crimes – International, Department of Finance
The Department of Finance does not enforce these two acts; that is the responsibility of the Department of Foreign Affairs and the Department of Public Security. Under these two laws, persons who are aware of funds in banks that may belong to registered terrorist groups must report this to the RCMP or to CSIS. We do not have that information at the Department of Finance.
Conservative
Conservative
Joyce Bateman Conservative Winnipeg South Centre, MB
Thank you very much, Mr. Chair.
Thank you to all of our witnesses. I apologize for the potential disruption that's soon to come.
Madam Nadeau was just talking about the importance of reporting to other organizations. You mentioned it, Mr. Stewart.
Mr. Cossette also mentioned this, and Mr. Beaudry as well I believe.
I want to start with Mr. Stewart and find out exactly how you share this information. We always think of governments developing silos that may not be useful in terms of information sharing. Supposing there's something to share, what is the process? How do you share? With whom do you share? When do you share? I'm assuming you're only going to tell me what you can tell me, but it just makes sense to me that this is information that you don't want to hold close. Certainly in FINTRAC as well, heaven forbid that it's a one-way street.
Mr. Stewart, would you start?
Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance
Right, thank you.
I regret to say that the issue of how the regime works operationally is really not in the domain of the department, so then we're not immersing ourselves in how agencies—enforcement agencies, investigation agencies—are actually operating.
Conservative
Joyce Bateman Conservative Winnipeg South Centre, MB
No, but supposing you had some information, who do you share it with?
Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance
Were we to obtain any information we would share it with the RCMP, obviously.
Conservative
Joyce Bateman Conservative Winnipeg South Centre, MB
Okay. I'm a chartered accountant by profession. It's possible that there are other accountants in this country who are privy to information. I know there's client protection, but we're talking about terrorism here.
Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance
Indeed.
Conservative
Joyce Bateman Conservative Winnipeg South Centre, MB
So what is your criteria if you find out...? Or are you removed from that?
Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance
We are, as I say, to a degree removed. Of course, my colleague and FINTRAC as an agency are in the business of sharing information. This is their job. The regime has established—and this gets to a question that was asked a little earlier as well—standards for customer due diligence and we try to provide guidance to reporting entities. There are over 30,000 reporting entities that are working with FINTRAC—or for FINTRAC, in a sense—and they are provided with guidance on customer due diligence and how to detect suspicious transactions. They are responsible for determining, to the best of their ability, whether or not there is in fact a risk or a suspicion, and then they report that to FINTRAC and FINTRAC then conducts its analysis and shares that as appropriate. There's a very strong conduit of information that flows from reporting entities to FINTRAC, and from FINTRAC to law enforcement.
Conservative
Joyce Bateman Conservative Winnipeg South Centre, MB
We can expand on that, Monsieur Cossette, in a minute, but you talked about sharing information with CRA earlier and how there are two criteria for you to do that, and one was demonstrable tax evasion. Wouldn't you want to talk to CRA first about the tax evasion piece, or are you sorting that out?
Director, Financial Transactions and Reports Analysis Centre of Canada
We do receive different kinds of reports. One set of reports is the suspicious transaction reports. In the suspicious transaction reports, the bank or financial institution—it may be a bank, it may be a security dealer—would report, for instance, what they considered being suspicious, why they find the transaction suspicious. The kinds of operations they may see are discrepancies between salary and revenue or people transferring money to several bank accounts abroad in countries that are well-known for being safe havens, for instance. They may report that information to us. If the information seems to suggest money laundering—a disconnect between salary and revenues, for instance, so some of the revenues may be illicit, which may suggest money laundering, and also the money is being transferred to a safe haven—then we may decide to disclose to CRA.
Conservative
Joyce Bateman Conservative Winnipeg South Centre, MB
But you make the assessment in terms of the tax evasion potential?
Director, Financial Transactions and Reports Analysis Centre of Canada
Potential, suspicion of, and then CRA will continue its own investigation based on their own criteria.
