Is there a central...?
Evidence of meeting #75 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.
Evidence of meeting #75 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.
March 31st, 2015 / 10:10 a.m.
As an Individual
It has agreements with similar bodies in other countries and they exchange information back and forth.
Yes, there is that collaboration, and it is networked so that we might get a heads-up from another government that something is happening that impacts us, and then that is shared with our enforcement partners.
10:10 a.m.
Associate Dean and Associate Professor, Faculty of Arts, Royal Military College of Canada, As an Individual
Arguably, the most effective financial intelligence agency we have in Canada is the Bank of Canada, because the central banks actually have a very good intelligence-sharing network among themselves, in part because in many cases they don't actually trust their own national governments to provide them with necessary and timely intelligence. I can provide some evidence on how the Bank of Canada has been ahead of the game in a number of cases where subsequently governments came on board. More cooperation with the Bank of Canada is one thing that I think might be helpful.
10:10 a.m.
Conservative
Colin Mayes Conservative Okanagan—Shuswap, BC
Professor Tupman, is there anything the U.K. government has done to put a framework together to work internationally, and how is that framework set up to monitor these transactions?
10:10 a.m.
Professor, BPP University / University of Exeter, As an Individual
Well, we have just changed our whole operational system. We have introduced the National Crime Agency, and that is taking a partnership approach, an approach to partner universities, the private sector, and other agencies. There is a whole new set of ideas coming down.
One of the things we are worried about is.... I can't remember if it was you or your previous colleague who asked the question, are we ever going to catch up? We are beginning to try to think 15 years down the road. We are trying to look at what is coming over the horizon, trying to think the unthinkable. There are those sorts of things going on.
I think you would find the same sorts of complaints that your colleagues are making. We are not studying the suspicious activity reports properly, and we are not putting them together. We have a strong feeling that we need to train compliance officers in banks and business to screen transactions better so that they don't just send any old thing, but they send stuff that is genuinely suspicious.
There is a lot going on, but it's a work in progress. I can't pull out best practice right here and now. We are dissatisfied with what we have done so far, and we are rethinking.
10:10 a.m.
Conservative
10:10 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
I am not sure I've seen that at the finance committee before. That was impressive, Mr. Mayes. We scramble for time, and that was generous.
I have several questions, starting with you, Ms. Duhaime.
You were quoted as not being overly optimistic about this committee's study into this particular theme. I am not taking it personally, by the way, but why were you uncertain as to whether this committee could study this topic effectively?
10:15 a.m.
Lawyer, Duhaime Law, As an Individual
Well, it wasn't necessarily about this committee. Let me blame the media.
10:15 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
We totally sympathize. We blame them all the time as well.
10:15 a.m.
Lawyer, Duhaime Law, As an Individual
Okay, thank you.
It's more that I feel that Canada has undertaken a number of studies and actually nothing has changed. I guess it's the hope that this committee might be different and it might take the job to task more comprehensively, and perhaps listen to fewer professors. No disrespect to professors, but we seem to listen to a lot of professors and to nobody who has ever actually worked in a bank. I am happy to see that you have different types of people as witnesses, and I think obviously this will create some change.
10:15 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
This idea of international terrorist financing is nothing new. Prior to 9/11, but certainly since 9/11, terrorism has been much more central in the hearts and minds of policy-makers here and abroad.
Why is there so little effectiveness? Aside from a better array of witnesses we are hearing here, what would be one of the particular things that would give you confidence that the government was actually serious, not just speaking about the seriousness of it but actually acting upon the seriousness of it?
10:15 a.m.
Lawyer, Duhaime Law, As an Individual
One of the things we've heard, and we've even heard this repeated today, is that there is a lack of training and expertise among compliance people at the banks. That hasn't changed for a number of years, and I don't know why that is. It has changed in the United States, but not necessarily here. I think what the United States does well is it prosecutes and fines heavily. I am not suggesting we necessarily go that way, but I think we need to begin to think about how that might be effective.
10:15 a.m.
NDP
10:15 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Not very much.
Do you agree with that statement, Mr. Kennedy?
10:15 a.m.
As an Individual
Oh, yes, that is my complaint.
Since this is a finance committee, I assume you have financial backgrounds. If you conceived a company to produce a product and viewed all this information as streams of ingredients for a product going down to a cook, the ingredients all come in, and that stuff is spilling on the floor. Nothing is happening to it. In order to do that, you have to have someone who knows what the ingredients are, appreciates them, and knows how to put them together and produce a product.
We have money going into a system and no product. We need to have investigators who know how to use this and investigate it effectively, and prosecutors who know how to do it. These are far different kinds of criminal activities we are talking about, and far different skill sets that are required. This is a wasted effort by all of us unless we have people at the end to turn that into something concrete.
I can't find anything concrete. That tells me something is wrong.
10:15 a.m.
NDP
10:15 a.m.
Lawyer, Duhaime Law, As an Individual
I was just going to say that I think from the banking perspective, too, we fail to ask the banks how much this is costing them. The U.K. did a number of studies, and in 2005 the cost to the U.K. banking system was, I think, something like £200 million for compliance. Now it's about £5.8 billion.
10:15 a.m.
Lawyer, Duhaime Law, As an Individual
Yes, per year. That's a lot of money that we ask the banks to invest in compliance for counterterrorism sanctions and anti-money laundering law, yet there's no result, as we were saying, that gets spit out in terms of prosecutions and results. They just seem to be spending a lot of money, and we can't keep spending that amount of money in the private sector and not get anything out of it.
10:15 a.m.
NDP
Nathan Cullen NDP Skeena—Bulkley Valley, BC
Thank you.
Mr. Leuprecht, just in the last moment you said something about the central banks not trusting the intelligence authorities or the governance. You had some hope or an expression that the central banks had a great deal of information and ability to share that with other central banks and are, I think you said, ahead of the game.
I want to come back to that question of trust. Did you mean what you said, that from your evidence the central banks don't have a great deal of confidence in sharing that information with other agencies and authorities?
