Evidence of meeting #134 for Finance in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was cases.
A video is available from Parliament.
Director General, Policy and Foreign Relations, Canadian Security Intelligence Service
I find that our relationship with FINTRAC is very good. Because of all the information they receive from the various government departments that share with them, they're very responsive to any requests we have.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
I'm glad that you guys are working together. Is there additional information that would make your life easier, to be able to stop money laundering or proceeds that are going to finance terrorism?
Director General, Policy and Foreign Relations, Canadian Security Intelligence Service
We of course don't look at money laundering per se. We focus on terrorist financing, and we're using FINTRAC to look for leads to determine who might be getting the funds and where they might be disbursing them. At this point, no, everything that FINTRAC gives us supports our investigations.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
Great. Is there any additional information that FINTRAC could provide you that would enhance the investigations you're having? Are there things that you know you don't know, that you would like to have?
Director General, Policy and Foreign Relations, Canadian Security Intelligence Service
Do you mean the unknown?
No, from what I see right now, FINTRAC does supply everything we need to push our investigations forward. We can go to them on a case-by-case basis. If we have a question to ask, we can go back to them and ask for that information. From my experience, they've always been able to come forward with it. Sometimes it's just being able to find the first lead information and then you go from there.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
Great. Thank you.
Mr. Bhupsingh, if I could go back to your testimony, you also identified the problem in a very general sense of trying to protect privacy. You have an obligation to protect privacy rights, and you also want to minimize the administrative burden. Imagine that those two conditions did not apply. What type of information would you be looking for again? What type of information would you like to have that you don't have because of those concerns?
Director General, Law Enforcement and Border Strategies Directorate, Department of Public Safety and Emergency Preparedness
As my colleague from the RCMP said, this is a world where money is very mobile, where crimes are changing dramatically and technology is enabling criminals to move money around. Just more generally speaking, if those two conditions were somehow eradicated, if we didn't have to worry about things such as privacy or the balance between privacy and disclosure, we would want better intelligence on how criminals are moving their money, maybe not through our financial systems now but via things such as cryptocurrencies. People have mentioned this in a number of questions, about this particular area is growing.
We have a general sense of where the areas are that—
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
Would you be so kind to give us, from that general sense, something a little more specific? I want you to take advantage of this opportunity, this open window that we have to review this legislation, to try to make some changes to make your lives easier in that regard. We'd really appreciate it if you could give us some specifics.
Director General, Law Enforcement and Border Strategies Directorate, Department of Public Safety and Emergency Preparedness
My colleague John Davies, in the national security area, is probably fairly up to speed on some of the specifics.
Director General, National Security Policy, Department of Public Safety and Emergency Preparedness
The obvious one is the $10,000 limit. If you get rid of the limit, you can have a lot more information. However, there would be a serious effect on privacy from doing to that, and a serious question over whether doing that would actually lead to more intelligence on threats. There is already so much information.
Liberal
Greg Fergus Liberal Hull—Aylmer, QC
You get a lot of information, and if you were to remove that limit or lower that limit, you'd get even more. What type of information would be helpful to you? What kinds of transactions would you want to put your hands on?
Director General, National Security Policy, Department of Public Safety and Emergency Preparedness
This feeds into the following issue—and maybe it's a red herring, the $10,000. The issue is what is a suspicious transaction and how the financial system is equipped to identify, on its own, these suspicious transactions and report them FINTRAC, which can in turn report them to intelligence agencies or law enforcement. We need much more engagement with the private sector to help them to identify suspicious transactions, and so on, in their finances. The 2015 paper on the national risk assessment is a good step in that regard.
Other countries have more partnerships with financial systems. They're noted in the Department of Finance paper for the study of the act. That's probably a lot more meaningful than worrying about the threshold.
Conservative
Pierre Poilievre Conservative Carleton, ON
Thank you.
We're hearing a lot about blockchain technology. Some suggest this technology is a solution for the problems of corruption, money laundering, etc. I understand that some foreign governments, for example, are putting land registries on blockchain systems so they can protect those registries from corrupt officials who may alter ownership records and to ensure that people can have security of title. On the other side, blockchain technology is used for cryptocurrencies, and we hear continuing suggestions that cryptocurrencies are tools of money laundering, illicit drug dealing, etc.
Can any of you discuss your evaluation of whether blockchain technology is a friend of transparency or an ally of corruption?
Director General, National Security Policy, Department of Public Safety and Emergency Preparedness
I'm not an expert on this. I don't think the department is an expert. I think the community is still struggling with what blockchain is, but we would agree with everything you said. There are threats here and there are opportunities. There is a real plus side on cybersecurity, on protecting information, but there are also threats that we're not clear on in terms of how this technology could be exploited for money laundering and terrorist financing.
This is an emerging issue. I think Finance flags it in its paper. It's something that deserves more study.
Conservative
Pierre Poilievre Conservative Carleton, ON
Thank you.
That's all I have. Does anybody else want to jump in?
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
I'll jump in on something that was said earlier.
Assistant Commissioner Crampton, you talked about training for officers. Can you describe the type of officer you were speaking of and that the RCMP needs more of? I ask because with a lot of the securities investigations that have a fraud or a money laundering component, a lot of the evidence-gathering process is done by provincial securities commissions. They do their best job. They know the actors in the field. It's a small community, so they know who they are.
What type of training do RCMP officers need to convert that knowledge gained on the ground to successfully prosecute a case?
A/Commr Joanne Crampton
The training I referred to is not just with law enforcement; it's also with our regime partners. It looks at anyone involved in money laundering investigations or receiving information. That would include all of our partners at the table here as well as FINTRAC, Department of Finance, any of those areas. It's not from an investigative angle only. It looks at the whole regime, the complexities of money laundering, understanding how the offence works in terms of professional money launderers—who we see more and more of—as opposed to someone just laundering money, which is a fairly straightforward investigation. It's very complex when it's a professional money launderer who has nothing to do with the predicate offence.
The training would look at the complexities and address some of the issues that have been mentioned here, such as cryptocurrencies and the ever-evolving areas of money laundering and terrorism financing.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
I was talking more about the type of training an RCMP officer needs. You have RCMP officers doing community policing in Alberta, for example, in remote communities. What type of training do RCMP officers need to be an asset in the fight against money laundering? This is separate from the legislation. What is the type of training they need? I know it's a resourcing problem. I consistently heard from the finance department in Alberta that they gather all this evidence and pass it on higher up but nothing ever happens with it. They say that the RCMP involved in the investigations don't have the skill set to understand the problem, whereas we need to have people with masters degrees in finance and people who actually do deals on a regular basis who can recognize money laundering, fraud, and illegal dealings. What is it that RCMP officers need to know? Do they need more degrees, or more training? What is it?
A/Commr Joanne Crampton
Sorry, I misunderstood your question.
The investigation of financial crime falls to our federal policing sections across the country. These are specialized investigators who work specifically on financial crime, drug investigations, national security, and other areas that fall under federal policing.
In the last few years, we've been working more and more with private partnerships and public partnerships to gain the expertise we need rather than creating it all from within. We're recognizing the value of working with partners, working with the banking industry. We've been hiring people from external areas to work with our financial crime units to provide the expertise we need to move forward, in addition to the training I've mentioned.
Liberal
February 26th, 2018 / 4:30 p.m.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
Thank you all for your presentations.
I'm going to start with CSIS. You mentioned your partnerships and your notifications, such as of FINTRAC and others of any suspicious activity, money laundering, or things like that. What are the statistics on how often you're reporting these cases? Is there any follow-up or mechanism to determine if it actually goes anywhere?
Director General, Policy and Foreign Relations, Canadian Security Intelligence Service
When we go to FINTRAC, it's more to make them aware of the things that we're actually looking for so that they can push more information to us. On a regular basis, as we come across information we feel would be of benefit to our partners, we write short reports and send them out to pass on that information. I don't have a statistic that I can give you right now, but if you like, I can certainly look into that and get back to you.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
I would appreciate having that information, if you can send it to the clerk.
If you're sharing information amongst departments, is there any process or body overseeing that? If CSIS writes a report to the RCMP or to FINTRAC and says they should look into this and nobody looks into it, is there any mechanism to see how often that's happening, to find out the reasons why, or if there is any type of communication on why something moves forward in an investigation or why it doesn't?
