Finance Committee on Feb. 8th, 2018

[The Chair, Liberal, Wayne Easter]

I call the meeting to order.

Welcome, everyone.

Pursuant to the order of reference of Monday, January 29, and section 72 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, the committee is commencing its statutory review of the act. We have the first witnesses for this fifth-year review of the act, which is going to be a fairly major undertaking.

We have, from the Department of Finance, Annette Ryan, associate assistant deputy minister, financial sector policy branch; Ian Wright, director, financial crimes governance and operations; and Maxime Beaupré, director, financial crimes policy.

The floor is yours, Annette. I believe you have an opening statement, and then we'll go from there.

Thank you for coming.

[Annette Ryan, Associate Assistant Deputy Minister, Financial Sector Policy Branch, Department of Finance]

Thank you, Mr. Chairman.

It is a sincere pleasure to appear before this committee as you begin your review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. I'll also refer to it by its better-known acronym of PCMLTFA, or more simply, the act.

My intention today is to give you a brief overview of the importance of combatting money laundering and terrorist financing and explain the goals and structure of Canada's anti-money laundering and anti-terrorist financing regime. I'll also review Canada's recent international peer review evaluation and then describe the efforts we've taken with federal and private sector partners to assess and expand this international peer input. With federal partners, we have summarized all of this advice in a policy discussion paper, which we released yesterday. The paper is intended to support your committee's current review, and we hope that the paper will serve as a helpful baseline in your deliberations.

Money laundering and terrorist financing are crimes that facilitate and reward the commission of other crimes, such as those perpetrated by organized criminals and terrorists and terrorist groups, as well as the actions of those who engage in tax avoidance and tax evasion.

These financial crimes can be carried out in Canada or elsewhere, but they affect all Canadians. In order to face these threats, Canada's anti-money laundering and anti-terrorist financing regime was established in 2000, with the mandate to combat terrorist financing being added in 2001.

The regime is designed to deter criminals and terrorist financiers from using Canadian financial institutions and other entities for their criminal purposes, and to provide appropriate tools to law enforcement to combat money laundering and terrorist financing, while also respecting the privacy rights of Canadians and minimizing the compliance burden on private sector reporting entities.

Canada has a stable and open economy, an accessible and advanced financial system, and strong democratic institutions. Those seeking to launder proceeds of crime or raise, transfer, and use funds for terrorism purposes try to exploit these strengths.

Because they act as a deterrent to financial crime, effective regimes to combat these threats are essential to protect Canadians, the integrity of markets, and the global financial system.

A strong legislative and regulatory framework is required to effectively detect and deter criminal activity. This framework has evolved and matured in recent decades by adopting and adapting international best practices as informed by domestic threat risk assessments and close collaboration among partners. Doing so allows Canada to meet our international commitments in the fight against transnational crime and terrorism, and to bring new intelligence and tools to domestic security efforts.

Canada takes a comprehensive and coordinated approach to combatting money laundering and terrorist financing. This regime involves coordinated action by 13 federal departments and agencies, in addition to law enforcement entities across the country.

The overarching objective of the regime and the act, as I said, is to detect and deter money laundering and terrorist financing, while facilitating the investigation and prosecution of these crimes. The objectives thus place equal emphasis on preventing illicit funds from entering or moving through Canada's financial system and creating a paper trail to assist law enforcement in detecting and prosecuting these crimes.

Reporting entities also play a crucial role in achieving those objectives. These financial institutions and designated non-financial businesses and professions are the gatekeepers of the financial system.

Under the act, reporting entities have an obligation to properly identify their clients, keep corresponding records, exercise customer due diligence, monitor transactions on an ongoing basis, and submit mandatory reports.

The Financial Transactions and Reports Analysis Centre, FINTRAC, Canada's financial intelligence unit, receives those reports and analyzes the financial information they contain. In addition, FINTRAC, as a regulator, ensures the compliance of reporting entities with their obligations under the act.

The framework also contains measures that are critical to support law enforcement in pursuing money laundering and terrorist financing. This includes requirements to keep proper documentation which law enforcement can access through court-mandated orders. It includes reports that are provided to FINTRAC when thresholds of suspicion are met.

Once reports are analyzed by FINTRAC, the resulting actionable financial intelligence is disclosed to law enforcement when it meets the threshold of reasonable grounds to suspect that this information would be relevant to the investigation of a money-laundering offence or terrorist financing offence. In turn, law enforcement, national security, and other investigative bodies, supported by FINTRAC's disclosures of financial intelligence, undertake investigations in relation to money laundering, terrorist financing, other profit-oriented crimes, and threats to the security of Canada, in accordance with their individual mandates, in order to disrupt, prosecute, and sanction these criminal activities.

In its efforts to protect Canadians through anti-money laundering and anti-terrorist financing measures, the Government of Canada is committed to respecting the constitutional division of powers, the Canadian Charter of Rights and Freedoms, and the privacy rights of Canadians.

Although the act requires businesses to disclose private financial information to FINTRAC, it also sets out strict measures to safeguard charter and privacy rights.

The PCMLTFA prescribes the information that FINTRAC can receive and disclose. It sets out the specific law enforcement and intelligence agencies to which FINTRAC may disclose the financial intelligence. The act also limits the circumstances in which FINTRAC must disclose information to these agencies. FINTRAC must have reasonable grounds to suspect that the information would be relevant to the investigation or prosecution of a money-laundering or terrorist financing offence, or relevant to the investigation of threats to the security of Canada. Unlike other intelligence agencies, FINTRAC does not conduct investigations. This set of safeguards supports FINTRAC's independence from law enforcement agencies.

Since the legislation was enacted, in 2000, the regime has undergone two parliamentary reviews, three reviews by the Office of the Privacy Commissioner of Canada, and a number of external evaluations. This scrutiny has led to amendments to the legislative framework in response to evolving threats, in order to better support law enforcement efforts. Over time, the framework has undergone changes to provide for new types of reporting entities and new recipients of FINTRAC information, as well as to strengthen existing obligations and add others.

As I've mentioned, a well-functioning framework is critical to combatting money-laundering and terrorist financing in Canada and globally. These transactions do not stop at national borders, and strong national anti-money laundering and anti-terrorist financing regimes enhance the integrity and stability of the global financial system. Given the interconnectedness of the financial system, the fight against money laundering and terrorist financing can be undermined if there are weak links in the chain of efforts by national authorities.

The Financial Action Task Force, or FATF for short, is an intergovernmental body that sets international standards for combatting money laundering and terrorist financing. The FATF monitors the implementation of those standards by states through mutual evaluation and public reporting, to ensure a level playing field for all member countries. Canada is a founding member of the FATF and actively contributes to its work.

The Financial Action Task Force released a mutual evaluation report of Canada in 2016. Overall, the evaluation found that Canada has strong anti-money laundering and anti-terrorist financing legislation and regulations, and that the regime is effective. They did, however, note a number of areas where technical action could be taken to ensure that the framework meets international standards to be even more effective.

The report found that Canada has a good understanding of its money laundering and terrorist financing risks, and that anti-money laundering and anti-terrorist financing co-operation and coordination are generally good at the policy and operational levels. In addition, Canada was assessed as having financial institutions that have a good understanding of their risks and obligations and generally apply adequate mitigating measures. Canada was found to have reporting entities that are generally subject to an appropriate risk-sensitive supervision framework; financial intelligence that is used by law enforcement agencies to aid investigations, prioritize pursuit of terrorist financing activities, and for provision of useful mutual legal assistance and extradition; and a comprehensive sanction regime against Iran and the Democratic People's Republic of Korea.

That said, the mutual evaluation process identified areas for improvement in Canada's regime. Notably, these include a limited availability of accurate, beneficial ownership information to be used by competent authorities; the fact that the legal profession in Canada is not covered by the PCMLTFA; and the fact that other vulnerable sectors are also not covered. This includes finance and leasing companies as well as unregulated mortgage lenders. They found a gap in the application of the act requirements related to politically exposed persons, also known as PEPs, heads of international organizations, and beneficial ownership information requirements for the designated non-financial businesses and professions sector. The international evaluation also noted the need to improve the number of money laundering investigations and prosecutions, in particular for more complex money laundering and terrorist financing schemes such as third-party professional money launderers. I will note that they also assessed that the penalties for violating our laws are neither proportionate nor dissuasive.

The findings of the mutual evaluation are welcome and in many instances align with the views provided by federal partners and private sector stakeholders. Notably, views from federal partners were profiled in the “Assessment of Inherent Risks of Money Laundering and Terrorist Financing in Canada” report that was publicly released in 2015.

In recognition of the upcoming parliamentary review, we worked with our partners to put together a discussion paper highlighting areas of consideration that could lead to improvements in the framework.

The possible legislative directions described in the paper released yesterday draw heavily from the mutual evaluation and are organized around the following five themes. First are legislative and regulatory gaps. Second is enhancing the exchange of information while protecting Canadians' rights. Third is strengthening intelligence capacity and enforcement. Fourth is modernizing the framework and its supervision. And, finally, there are the administrative definitions and provisions.

The government has already taken action in response to the broad policy directions set out in the paper. For instance, when they met in December 2017, federal, provincial and territorial finance ministers pledged to work with their fellow ministers on amending current legislation, in order to improve corporate and beneficial ownership transparency, by requiring companies to keep the information on record.

Thanks to these efforts, the appropriate authorities will be able to follow the opaque money trail of suspicious transactions all the way back to the originating client who made the transaction or is benefiting from it.

We anticipate that the committee will hear from civic society and the private sector, and that parties may differ on how to strike the appropriate balance between sometimes conflicting objectives at play in this policy space. A balance must be struck between efforts to minimize the burden on reporting entities that are on the front lines of the fight against money laundering and terrorist financing; how to leverage innovation to find new ways to meet obligations while reducing the burden on the private sector; efforts to counter new and evolving threats, including through new measures and enhanced international standards, to better protect the safety and security of Canadians; and efforts to actively protect the charter and privacy rights of Canadians by being constantly mindful of the limits and constraints that these entail.

As you begin your deliberations, we also offer the perspective that not all regime improvements require legislative changes. In our discussion paper we point to tangible examples that show new ways that public and private sector partners have begun to work together to modernize our efforts and improve effectiveness. One such example is Project Protect. This is a private sector led initiative to combat human trafficking. Partners worked within existing authorities to identify specific transaction patterns typical of human trafficking and sex crimes. This has yielded concrete results for law enforcement agencies. This model has been expanded to other types of criminality, which has led to successful investigations of different types of drug trafficking. In recent weeks FINTRAC issued a new operational alert to identify and target fentanyl trafficking.

In conclusion, Canada must remain actively committed to combatting money laundering and terrorist financing. This requires a continually evolving framework in order to ensure an effective and robust regime able to respond to new threats and vulnerabilities, while adhering to international standards.

We sincerely embrace the parliamentary review process. We've worked well and closely with domestic and international partners to assess tangible actions that will address the evolving landscape of financial crime. We have profiled these areas for action in our discussion paper. We look forward to supporting your deliberations, and receiving your assessment of our work and your priorities for action.

I thank you, Mr. Chair, for your attention and look forward to your questions.

[The Chair, Liberal, Wayne Easter]

Thank you, Ms. Ryan.

Before I turn to questions, I do recognize that the paper, “Reviewing Canada's Anti-Money Laundering and Anti-Terrorist Financing Regime”, went on your website yesterday. I don't believe members have had time to go thoroughly through that yet. I do know there's a lot of information in it, so at some point after we have heard from other witnesses, we will likely have to ask you to come back. I think we'd be more appropriately prepared on this particular document then. I know it raises a lot of areas. We'll likely have to do that a little later on.

I would say as well, just keep in mind, members, that the deadline for witnesses is a week from tomorrow.

I'm turning to Mr. Fergus for seven minutes.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Thank you, Mr. Chair.

Thank you, Ms. Ryan. I do appreciate that you've come to help start our discussions on, as you note, the easily referenced PCMLTFA.

Let's start with a larger issue, given what the chair just said about our ability to familiarize ourselves with the discussion paper. It would seem to me, just from a quick overview, that we have a difficult triangle of objectives. We have an obligation with regard to privacy rights; we also feel that we have an obligation to minimize the administrative burden; and yet we also want to combat money laundering and terrorist financing. Can we do all three?

If we can't, given the state of where things are at, how are we going to be most effective in combatting money laundering and terrorist financing? What are the things that we have to do to bring ourselves up to that international level?

[Annette Ryan]

Thank you for this question. It really goes to the heart of the questions that confront the regime. We currently do strike a balance between privacy, burden, and results.

I would like to emphasize the considerable effectiveness of the current regime in deterring criminal and terrorist activity using the financial Information that is generated through this system of intelligence. The issues that we've put forward in the discussion paper, and that you'll hear about from your witnesses, speak to strengthening this regime, its legislation, and how the partners work together in a constantly evolving context.

We think there are tangible actions that can help us move forward. At its base, this dynamic environment also gives us opportunities to do things better, for example, using technology. Inherently, financial intelligence is a system of transactions that can be queried, assessed, and we can learn interesting things. In terms of patterns of transactions, that goes to the use of algorithms, that goes to all of the modern techniques that can help us make progress by using information effectively.

The question is to get a consistent and comprehensive base of information that asks the right questions and is structured in the right way so that we have an effective chain of intelligence that we pass on to law enforcement in ways that can subsequently be the basis for successful prosecutions.

We've put forward our best advice and we look forward to hearing from the committee.

[Greg Fergus, Liberal, Hull—Aylmer, QC]

Thank you.

The Financial Action Task Force, as you've pointed out, has indicated that yes, Canada is a strong player in having certain elements in place, yet there are some weaknesses or vulnerabilities, I think, is how you put it. Whether or not that is the question of politically exposed persons or the question of beneficial ownership, it strikes me that if we were to increasingly drill down on beneficial ownership, that would butt up against the question of privacy and against what our international practices are and how far we could go without our other partners around the world following in lockstep with us.

[Annette Ryan]

That's another excellent question. The international attention to money laundering and terrorist financing is active, robust, thoughtful, and it brings a high standard of excellence to these questions.

The advice that we received from the FATF is geared towards exactly those objectives that you name: the integration of global efforts, and the ability to make sure there aren't weak links in the chain in specific member countries.

The work of the FATF has provided us with tangible advice of where we should put our attention so that we can be consistent with international norms. It has prioritized the areas for action. As you say, it's the question of beneficial ownership, so that essentially bad actors cannot hide behind the corporate structure to move money for their ends. It goes to the question of making sure that there aren't important gaps in our regime.

Subject to a Supreme Court decision in 2015, the legal sector is not currently captured in our regime. It's important for us to be able to see the transactions that are typically used by bad actors from a holistic perspective. The exclusion of lawyers from that regime is an important gap for us, because lawyers do things like establish corporations. They notarize important transactions, and the sense of there being a gap in the system gives a strategic area that criminals and those who want to move money to terrorists can and do exploit.

We have contributed to the development of these international standards. We endorse them on a very profound basis, and our partners have given us advice about where Canada should put our emphasis to be most compliant with international efforts and most effective in our domestic objectives of keeping Canadians safe and secure.

[The Chair, Liberal, Wayne Easter]

Thank you, Greg.

Mr. Albas.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Thank you, Ms. Ryan. I certainly appreciate the work that you and your department do for Canadians. I too am glad that the chair mentioned there will be a thorough review of the document that was posted on the website yesterday. For our purposes today, I think you've done a very good job in just outlining some of the issues.

You rightly raised the point that FINTRAC has a bit of a blind spot when it comes to non-federally regulated mortgages and whatnot. That became very clear in the housing study. Some members may remember that MP Grewal asked a question about how certain transactions are conducted via cash, and you had stats. Both CMHC and OSFI said that we don't have access to that data. There is an agency that does, and that would be FINTRAC, although it's only available on a transaction-by-transaction basis.

While I totally understand the argument about needing to make sure that people's private information is kept confidential, I believe there is a great deal of information that could have public use if it were aggregated. While they're doing the good work they do to ensure that transactions are not terrorist based or organized crime, there is some social value to that aggregated data that would give us a better understanding, particularly in the areas of mortgages that are not currently under the federal regulatory space.

Would you agree there's an opportunity here for us as parliamentarians to review that end?

[Annette Ryan]

I agree on many elements of what you put forward. The real-estate sector is a clear area of concern within the regime, although we currently have in place a series of requirements on the real-estate sector.

I would point in the first instance to FINTRAC's efforts to raise compliance with those existing requirements. FINTRAC is actively working with the real-estate sector to make sure it is aware of its responsibilities and is more actively reporting to FINTRAC.

In terms of how that information can better be aggregated and assessed for blind spots and areas of concern, that stems from that first effort to get the information flowing into FINTRAC and ensuring that it's complete. On the completeness side, we know that we don't have the entire real-estate sector covered. To the extent that we can capture all the transactions you've flagged as being of interest, anything to do with cash is especially concerning. That will set us up to have that better aggregation from a better base.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Right now, FINTRAC's legislation doesn't allow aggregation of the information it collects. I appreciate your point that we need to be working off of capturing all the information to have an effective regime.

Again, I will quote many of the realtors I've met with, who say FINTRAC is a pain in the you-know-what. They don't like doing the paperwork. They understand why they have to do it. Many people would be glad, or at least would feel better, knowing that information is not only keeping Canadians safe but is actually giving policy decision-makers better information. I really hope you will run that up the flagpole with both FINTRAC and the minister, because there's a real opportunity for us to start utilizing that data.

I agree with your point, though, that it is a serious concern when the court has basically exempted a large area. We have many lawyers who have either come to this committee or.... I'm not sure if we have a lawyer here, but again, they would probably agree that there needs to be a better balance than the one that exists today. I certainly appreciate that.

You mentioned things like beneficial ownership. I'm glad that the government is looking to view this, because I think that's an area of concern. In a recent speech to Transparency International, B.C.'s new Attorney General, Mr. Eby, stated that he had been made aware of serious large-scale transnational laundering of the proceeds of crime in British Columbia's casinos.

To the best of your knowledge, is that true? If so, what's being done to combat it?

[Annette Ryan]

We also read the attorney general's speech closely and are quite concerned about the number of challenges that he has set forth. FINTRAC has been working closely with the casino sector and, in particular, in British Columbia to trace through the charges that have been put on what's happening in the province.

I will defer to my FINTRAC colleagues to take you through those efforts. It is a serious area of concern.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Is this a B.C.-specific problem, in your view, or do you think this is more of an issue right across the country, or in certain hot spots?

[Annette Ryan]

I would say that the sector has been consistently marked as an area of concern and there are efforts to make sure that it's fully compliant with the requirements of the regime, and that appropriate efforts are put in place to follow up on the issue.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

Okay. I will have some more specific questions at another time, Mr. Chair, but I just want to finish with this. Many Canadians send money abroad. Oftentimes it's to family members in other countries. I just want to know if you would also include that within the current proposal to look at some of our money-laundering, because we have to tighten up our own regime within Canada. I'm not casting aspersions on any one particular group, but a lot of money does leave Canada. I also want to know whether the government is also keen to ensure that we are not facilitating another country's problems, and to ensure that there are some controls on money exiting Canada and not just entering it.

[Annette Ryan]

The short answer is absolutely. That speaks to the integration across international efforts to make sure that we have consistent systems, and we put a lot of attention on those types of transactions, both through the formal sector of financial institutions and through the sector of money service businesses. You will see considerable attention to the money service business sector in the various reviews that have been done in our paper. We absolutely think that's a balance that always has to be on the front burner in order to get it right.

[The Chair, Liberal, Wayne Easter]

Thank you, both. With regard to that exchange, FINTRAC is scheduled to be before committee next Wednesday.

[Dan Albas, Conservative, Central Okanagan—Similkameen—Nicola, BC]

I just want to make sure they come prepared, Mr. Chair, so that they know that we're going to be asking some questions that perhaps.... To be fair to them, they're only going to say that this is what the law says they can do. These people are going to be making suggestions to the people in those offices, such as the Minister of Finance, regarding what might be reasonable to look at. So I'm taking that opportunity.

[The Chair, Liberal, Wayne Easter]

That was a good exchange.

Mr. Dusseault.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Thank you, Mr. Chair.

Thank you for being here for our first meeting on this subject. Precisely because I am a results-oriented person who doesn't like doing work for nothing, my first question has to do with the follow-up on the last two reports that were submitted, in 2006 and 2013. One report set out 18 recommendations, and the other set out 16, if memory serves me correctly.

Do you have any indications as to the progress made on each of those recommendations? Would the committee be able to obtain that information to ascertain whether those reports received any follow-up? We will be spending the next few weeks conducting the same study, so I wouldn't want our efforts to be in vain. Would it be possible to provide the committee with that information, as well as an update on the progress your department has made on the recommendations in the last two reports?

[Annette Ryan]

Thank you for the question.

To give you as accurate an answer as possible, I am going to switch to English.

I would point to a summary in the discussion paper, which describes recent efforts to evolve the regime. A number of those legislative and regulatory changes responded to the last parliamentary review. The Senate study included a number of recommendations in respect of the operation of the regime as well.

I would say that in many cases, we took on board the objective of that advice. In practice, the implementation of those objectives may have been different for different government realities and so on. I would also say, Mr. Chair, that we are working quite hard to provide the committee with a number of additional background documents, chronologies, and summaries of changes to the regime through time.

The information is being provided to support the committee's efforts so that it is not working in vain.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

It would be very useful to the committee's work going forward to have more detailed information on the progress made and on the recent changes to the act and regulations.

You mentioned beneficial ownership. Companies must have that information on record in the event of a request from a financial regulator or government agency, information that, unfortunately, is not publicly available.

You also mentioned tax havens. There continue to be jurisdictions around the world that are very secretive about financial transactions or at least extremely opaque jurisdictions from whom it is practically impossible to obtain information. Is that one of the biggest problems when it comes to proceeds of crime, and the effort to tackle money laundering and terrorist financing?

Today, how difficult do you think it would be to access information revealing the true culprit behind the scheme or the organized crime group responsible?

Do you consider that a serious problem the committee should examine as part of its study?

[Annette Ryan]

Thank you for the question.

The short answer is yes.

We consider the inability to find out who is behind a corporation as one of the more significant priority areas for action in the Canadian landscape in respect of money laundering, terrorist financing, and tax evasion. This view is evidently shared by all of our provincial and territorial partners. We are very pleased with the dedication and seriousness that our provincial and territorial partners have brought to our working groups, which kicked off with our last budget process and have proceeded over the last number of months. This is evident in the agreement that provinces and territories reached at the finance ministers' table in December, in concert with ministries responsible for corporate statutes, to bring changes to the relevant statutes to make it be the case that corporations must hold that information. They've also agreed to eliminate the bearer shares, which aren't registered, and this is an important issue as well. It speaks to the importance that all jurisdictions attach to these problems and the priority to act on them.

You raise an additional question, which is the availability of this information to be assessed by the public. This is an issue that we will continue to study with our provincial, territorial, and other federal partners. The important first step is to bring harmonization to the requirement that all corporations should keep records as to who is their beneficial owner. We will then continue our discussions and deliberations with our partners on the merits of a registry, the best modality of a registry, and the difficult question of whether it should be made public or accessible by the appropriate law enforcement agencies and CRA.

I offer that and hope it answers your question.

[Pierre-Luc Dusseault, NDP, Sherbrooke, QC]

Yes, that's very interesting indeed.

I think it would be beneficial to move towards that eventually, given that Canada was recently ranked one of the worst jurisdictions in terms of financial openness and transparency, especially at the corporate level. We, ourselves, have practically become a haven for the registration of corporations thanks to low fees and minimal red tape. That might might be a good thing on one hand, but on the other, the information is shrouded in secrecy. Some provinces have more trouble than others making the information publicly available. Eventually, a registry could help deter companies from setting up here for less than admirable reasons and put an end to their use of Canada as a haven.

I have a bit of time left, so I'd like to talk to you about the administrative monetary penalties imposed by FINTRAC. Is its review of the program expected to produce results soon? Courts have deemed the penalties to be excessive in some cases, not to mention the fact that the penalty-setting process is so obscure that judges felt the need to point out that it made no sense and that the penalties were based on highly suggestive elements.

Could we get an update on those discussions?

[Annette Ryan]

That's another excellent question.

The issue of administrative and monetary penalties is under active discussion, especially at FINTRAC, but also with other partners. At its core is a tension between discretion versus rules essentially.

The issue is whether FINTRAC can achieve better success by working with entities towards compliance and the right point at which to apply administrative penalties and with what amount in the appropriate channels with due process followed. These are what I would describe as the key elements in that discussion.

We are seized with getting the balance right, and getting a regime in place that will hit that right balance between effectiveness and transparency and compliance.