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.
February 26th, 2018 / 4:35 p.m.
Director General, National Security Policy, Department of Public Safety and Emergency Preparedness
The Office of the Privacy Commissioner looks at FINTRAC every two years. That's one.
The big issue for the Privacy Commissioner is whether the information FINTRAC is collecting is relevant. There is commentary on that.
I would look to the new national security intelligence committee of parliamentarians proposed in C-59, the integrated review body. It will get more into efficacy reviews on the impact of that kind of sharing. That's probably something more downstream.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
It sounds as though the ability to review it is there but that there is no systematic review to make sure the intelligence that's collected is actually going places, or being investigated or not. It's only if the Privacy Commissioner does a review every two years, and maybe the new committee as well. That might be a recommendation that this committee could look into.
Going back to the CBSA, cash is something we've talked about a little bit as committee members. There seem to be a lot of cash transactions happening in Canada, especially in the housing market in Vancouver and in the GTA. I have a question, and maybe it's naive. At some point that cash is coming from somewhere and going somewhere, or at some point it's going into the bank somewhere. The suggestion to me was that no, it's sitting locked up in places, essentially. I'm assuming this is coming from overseas in a lot of instances.
If I heard you correctly, you talked about almost half a million seizures. or at least investigations.... It was 26,000 investigations, but I guess there were over half a million reports of cash. Do you have any idea how much is being missed? Are we collecting more, or are we tracking more than we're missing? Are we missing more than we're getting?
Director General, Traveller Program Directorate, Canada Border Services Agency
Obviously it's very difficult to know what we're not seeing. There are two things I could say. One is that there's no limit on the amount of money that you can bring into or out of the country; you just have to report it. Our concern is, first, to take that declaration, and second, to find cases of non-declaration. Our cases of non-declaration have been fairly stable over the years, so we don't have clear signals to indicate that the problem is changing. However, I don't have full visibility on what we're missing and the amount of money that goes in and out illegally—which is not reported, obviously—because that's the specific concern of the CBSA.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
Of course, the reason it wouldn't be declared is that they wouldn't want the $10,000 limit to then be tracked and the information to go to FINTRAC and all the other places. There would be a reason why you wouldn't declare.
Obviously I understand that you can't know what you can't see, but that then tells me that you are not receiving information on the other side from banks, real estate agents, and so on regarding cash transactions. This cash is coming from somewhere, and if it's not coming out of a Canadian bank, then it's coming from somewhere via a person from somewhere else. That tells me that you don't have the data on the other side regarding how much cash is entering into our system, especially in the real estate market. Then you would be able to somewhat understand what's being missed. Obviously there would be nothing precise, but you would have some ability to understand that there is a lot being missed if it's coming in over the border, essentially.
You don't get that information from banks, do you? Banks don't tip off CBSA and say, “We just had this large cash transaction.”
Director General, Traveller Program Directorate, Canada Border Services Agency
No, we don't receive specific information from banks. Usually the intelligence we receive is from other law enforcement agencies and FINTRAC.
Liberal
The Chair Liberal Wayne Easter
However, anything over $10,000 coming through a bank has to be reported to FINTRAC by a bank. Is that correct?
Director General, Traveller Program Directorate, Canada Border Services Agency
Liberal
The Chair Liberal Wayne Easter
It even happens in P.E.I. I know some people who were offered $300,000 cash for a house. If you look at the B.C. market and elsewhere, the attorney general in B.C. is complaining big time about money laundering out there at the moment.
How do you get at that? I guess you don't know how you get at the unknown.
Director General, Traveller Program Directorate, Canada Border Services Agency
I'm sorry. I missed the last part of your question. I couldn't hear you.
Liberal
The Chair Liberal Wayne Easter
I think Mr. Davies made an earlier point about how the issue is with a suspicious action and how we could better find those suspicious actions than we are now. What tools does FINTRAC or do any of your agencies need to be better able to find a suspicious action beyond the limit? The limit of $10,000 or $12,000 is just a fixed limit in time. How do you try to get at a suspicious action?
Earlier, Joanne mentioned a professional money launderer. I'm sitting here and thinking, “What does a professional money launderer look like, what is its being...?” Are there any answers to that, anyone? How do we get at suspicious actions better? What is a professional money launderer? I mean, how do they operate? Does anybody have any answers?
John?
Director General, National Security Policy, Department of Public Safety and Emergency Preparedness
On the issue of bulk cash, in the Department of Finance paper there's a whole page and a half dedicated to potential solutions for dealing with the issue of bulk cash and the problems it creates in other jurisdictions—in Europe in particular. The committee could look at that. Other than that, I'm not sure if any of us are expert enough on the issue.
A/Commr Joanne Crampton
A professional money launderer is someone who literally launders money for a living. They employ people who will accept the money. They have ways of moving the money through either legitimate or illegitimate investments, through numbered companies, and through private companies. There are many different ways you can move money, but the issue with the act is that you need to be linked to an offence.
Generally in a drug transaction, say, where we're investigating someone accused of trafficking drugs, there could be money laundering attached to that, but if they use the services of a professional money launderer, it's very difficult to find those transactions. They're not linked to the person who's actually doing the drug transactions. Currently the act states that you need to be linked to that predicate offence, and so you could take it to someone who does this for a living professionally and have the money laundered, which makes it very difficult to investigate.
Liberal
The Chair Liberal Wayne Easter
We are going to be visiting the U.K. and the U.S. on this issue if we get the money.
Mr. Kmiec?
Ms. O'Connell, do you have one quick last one? I didn't take any of your time. You were already over, but we'll let you go with one more.
Liberal
Jennifer O'Connell Liberal Pickering—Uxbridge, ON
I just wanted to ask broadly about what no one has mentioned yet. Obviously, it is in the finance discussion paper, but I always forget the term. I wanted to ask about the “politically exposed person”.
Would anybody, maybe even the RCMP, like to respond on how often this is being investigated? How often is this an issue? I know that there are discussions of areas that we need to look at, but for the work that all of you are doing in your departments, how big an issue is this and what are some of those fixes, outside of the finance department's recommendations, or the areas of further expansion we should be looking at?
A/Commr Joanne Crampton
In terms of recommendations, I have none beyond what the document states and Finance recommends. I don't have any exact cases or statistics for you, but from an RCMP perspective, it certainly is an area of concern for us. People in high positions are vulnerable or even susceptible to issues such as this. It's certainly a concern, one that we would flag, and it's one that we think is important to change.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
I have a broad question to ask, because we've talked about cryptocurrencies, the sexy thing that everybody wants to talk about. For cryptocurrency versus cash, which is the more important one when it comes to money laundering and fraud operations? I lean towards saying that cash is still the issue. Am I correct? Or is cryptocurrency actually the emerging problem for law enforcement agencies?
A/Commr Joanne Crampton
I would say that cryptocurrency is certainly emerging. It's still evolving. It's ever-changing as well, so we hear of bitcoin, but there are many others that are taking its place, so it's something that's going to continue to evolve. We see it extensively in all sorts of crimes, not just money laundering obviously, but all sorts of crimes.
In terms of criminal investigations it's very significant for us. However, I would say the majority of our files are still involving cash.
Director General, National Security Policy, Department of Public Safety and Emergency Preparedness
I would agree. The cryptocurrency issue is a growing one, potentially exponentially. It's hard to quantify it right now, so it's the issue of the future, for sure.
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
Assistant Commissioner, in my previous question, you had talked about private partnerships and the use of external sources to fill areas of expertise at the RCMP. What did you mean by that? Are you using private investigators to supplement the RCMP's force?
Conservative
Tom Kmiec Conservative Calgary Shepard, AB
Are you hiring, then, from banks and from other financial institutions for the expertise that the RCMP needs? Is there no way for the RCMP internally to train officers to perhaps solely do these types of investigations?
A/Commr Joanne Crampton
Thank you, Mr. Chair.
Certainly there is. We can certainly train from within, but we would also be remiss if we weren't looking externally to hire in the civilian area for investigations. We're continually evolving in terms of our workforce, looking at positions we can “civilianize” and bring in that expertise. If we can bring someone in fully trained who has terrific expertise behind them, I think we'd be wise in doing so.