Thank you, Mr. Chair.
It's my pleasure to appear before the committee as part of its review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.
As part of our mandate to protect Canada's economic integrity, financial crime has long been a federal policing priority for the RCMP. As such, the RCMP, working in close collaboration with its Government of Canada partners, plays a fundamental role in Canada's anti-money laundering, anti-terrorist financing regime.
In support of its strategic priority on economic integrity, the RCMP works within the regime to prevent, detect, and disrupt crimes that threaten Canada's economy and security, including those involving money laundering and terrorist financing in Canada. In addition, the RCMP works with law enforcement agencies in an international capacity pursuing these types of investigations.
As a funded partner in Canada's anti-money laundering and anti-terrorist financing regime, which is a horizontal initiative led by Finance Canada, the RCMP receives funding to support its mandate within the regime. The planned spending under the horizontal initiative for fiscal year 2016-17 was $11,219,387, all of which was spent in support of the stated objectives of the regime.
The initiatives the RCMP undertakes with respect to money laundering and terrorist financing are dynamic. They are multi-jurisdictional and multi-faceted in nature, and the complexity leads to investigations that can take several months or even years to complete. For example, in 2014, a coordinated effort by the RCMP and Government of Canada partners led to the successful listing of the International Relief Fund for the Afflicted and Needy, or IRFAN, as a terrorist entity, pursuant to section 83.05 of the Criminal Code. By the time it was listed, IRFAN had transferred funds and resources valued at approximately $14.6 million to a number of organizations with links to Hamas, another listed terrorist entity. Listing IRFAN put an immediate stop to these transfers and empowered the RCMP to seize and restrain associated property, including vehicles, trailers, and office equipment.
Further to terrorist financing, over the past several years the RCMP has taken on a number of money laundering and proceeds of crime investigations in which a common theme has been revealed from the gathering of evidence for complex offences. Project FERODE was an investigation into an alleged fraud, drug offences, and associations to organized crime. The suspect had received up to $15 million from 20 investors and had attempted to secure an additional $10 million from Nexus Investments in Vancouver. On January 15, 2014, an individual was arrested on 15 charges, including fraud over $5,000, identity theft, forgery, possession of property attained by crime, and laundering the proceeds of crime. However, only $20,000 of assets was restrained and forfeited, and only an additional $8,000 was forfeited through the provinces' civil forfeiture programs.
The RCMP has had a great deal of success investigating criminal activity linked to organized crime. However, for a myriad of reasons, the RCMP has been hindered by challenges stemming from Canada's anti-money laundering, anti-terrorism finance regime. In other words, while the predicate offence can be straightforward in terms of its investigation and prosecution, due to time constraints, resource limitations, and the efficacy of prosecuting certain charges over others in these dynamic and complex cases, following through on proceeds of crime or money laundering charges is often not tenable.
These concluded cases demonstrate the particular challenges the RCMP continues to encounter when investigating proceeds of crime, money laundering, and terrorist financing. These challenges have led to somewhat inconsistent results, such as successful investigations on the predicate offence, but a limited capacity to effectively and thoroughly investigate and prosecute the related money laundering and proceeds of crime offences.
Based in part on these types of cases and the inherent obstacles, the challenges have been captured in more detail in the consultation paper published on Finance Canada's web page. Specifically, these challenges include finding effective means of sharing vital money laundering information while respecting the privacy rights of Canadians; the exclusion of lawyers and Quebec public notaries from the Proceeds of Crime (Money Laundering) and Terrorist Financing Act; a lack of transparency around beneficial ownership information; the increased use by criminal organizations of professional money launderers who have a tenuous link to any predicate offence; and a lack of specialized resources and training for investigators to undertake money laundering cases, which are often very complex in nature.
Addressing these challenges as part of the parliamentary review of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act could assist the RCMP in achieving greater results.
I'd be happy to respond to any questions you may have on the role the RCMP has within this regime.