Finance Committee on May 27th, 2021

[Justin Brown]

It's still me, Mr. Chair. I'd ask the clerk also to provide access to Gabriel Ngo, a senior analyst on my team, who may also provide support on questions, at least for the next 10 minutes or so.

As an umbrella for clauses 160 to 177, these all relate to strengthening Canada's anti-money-laundering and anti-terrorist-financing regime. The government continually works to strengthen and modernize this regime to, for example, respond to technological changes and evolving threats. Part 4, division 7 proposes amendments to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act with those objectives in mind. It also includes several clarifying or otherwise technical amendments.

Clause 160 makes persons and entities that engage in the business of transporting currency or certain financial instruments subject to the anti-money-laundering and anti-terrorist-financing regime under the PCMLTFA. It's primarily meant to cover services such as those provided by armoured car companies based in Canada.

[The Chair, Liberal, Wayne Easter]

Okay. Some of the people on this committee had quite a study on money laundering at one point in time.

Are there any questions on clause 160?

Shall clause 160 carry on division?

(Clause 160 agreed to on division)

(On clause 161)

[Justin Brown]

Clause 161 amends the definition of “head of an international organization” to include persons who are the head of an international sports organization. It amends the definition of “politically exposed domestic person” to clarify that it includes a list of offices or positions and to clarify that this includes members of the legislature of a province, and also that the term “mayor” includes other equivalent positions as a chief officer of a municipal or local government.

[The Chair, Liberal, Wayne Easter]

Shall clause 161 carry on division?

(Clause 161 agreed to on division)

(On clause 162)

[Justin Brown]

This clause amends subsection 9.6(3) of the French version of the act to better match the English version by clarifying that a person or entity must take the special measures referred to in the regulations in prescribed circumstances or if at any time the person or entity considers the risk of it as high. It adds the “at any time“ to the French version.

[The Chair, Liberal, Wayne Easter]

Shall clause 162 carry on division?

(Clause 162 agreed to on division)

(On clause 163)

[Justin Brown]

This clause strengthens money service business registration requirements with FINTRAC—which is the anti-money-laundering and anti-terrorist-financing regulator in Canada—to help prevent the abuse of those services by criminal actors. The list of designated offences that make individuals ineligible for money service business registration with FINTRAC would be expanded to include other offences, such as human trafficking, weapons trafficking, smuggling and sexual exploitation.

In addition, the amendments would make individuals subject to financial sanctions automatically ineligible for money service business registration.

[The Chair, Liberal, Wayne Easter]

That's pretty straightforward.

Shall clause 163 carry on division?

(Clause 163 agreed to on division)

(On clause 164)

[Justin Brown]

This clause specifies that the measures in a directive issued by the Minister of Finance can include ascertaining the source of virtual currency in any financial transaction. More or less, it adds the virtual currency to the existing language in the law.

[The Chair, Liberal, Wayne Easter]

I don't see any hands.

Shall clause 164 carry on division?

(Clause 164 agreed to on division)

(On clause 165)

[Justin Brown]

The next couple of clauses relate to enabling a cost-recovery scheme for FINTRAC's compliance activities under the law.

Clause 165 allows for the Minister of Finance to advance amounts out of the consolidated revenue fund to FINTRAC on terms and conditions specified by the minister to permit FINTRAC to defray its costs of operation and to make various provisions related to those actions.

[The Chair, Liberal, Wayne Easter]

Shall clause 165 carry on division?

(Clause 165 agreed to on division)

(On clause 166)

[Justin Brown]

Clause 166 also relates to the cost-recovery scheme for FINTRAC's compliance activities. This includes the obligation for FINTRAC to ascertain those expenses and to assess a portion of them to regulated entities. It also would provide FINTRAC with the power to prepare an interim assessment.

Most of the details of this scheme would be prescribed by regulation, and there will be later clauses that speak to that.

(Clause 166 adopted on division)

[The Chair, Liberal, Wayne Easter]

Shall clause 166 carry on division?

(Clause 166 agreed to on division)

(On clause 167)

[Justin Brown]

This clause clarifies, for greater certainty, that if FINTRAC receives a report from a reporting entity, it may, for the purpose of analyzing and assessing that report, request the reporting entity to provide additional information. It's rather technical.

[The Chair, Liberal, Wayne Easter]

I don't see any questions.

Ed's thinking of one there, but he didn't get his hand up.

Mr. Falk, you did. Are you okay? You are.

Shall clause 167 carry on division?

(Clause 166 agreed to on division)

(On clause 168)

[Justin Brown]

Sections 55, 55.1 and 56.1 of the act contain rules around the disclosure and use of information in relation to a couple of different areas. It designates information for both domestic money-laundering investigations and for national security reasons, as well as to foreign authorities with similar duties.

The next couple of clauses are also quite technical, and they're all rather similar to each other. They include such things as looking at the conditions under which FINTRAC can disclose this information. They align some of the text between English and French. They include attempted transactions in the information that can be disclosed, not simply actual transactions, and they also clarify some of the language around designated information that FINTRAC may disclose with respect to trusts.

[The Chair, Liberal, Wayne Easter]

Go ahead, Mr. Falk.

[Ted Falk, Conservative, Provencher, MB]

Just as a point of clarification, to whom would the disclosure be made?

[Justin Brown]

It would depend on the provision. There's a list of what are called “disclosure recipients” under the act. Those recipients differ according to which of sections 55, 55.1 or 55.6 we're looking at. They could include domestic authorities that are involved in money-laundering investigations or that have powers related to national security, or foreign authorities that have similar powers.

[Ted Falk, Conservative, Provencher, MB]

Is the prescription specifying who is reported to found somewhere in the regulations?

[Justin Brown]

The disclosure recipients are specified in the act itself.

[The Chair, Liberal, Wayne Easter]

Ms. Jansen is next.

[Tamara Jansen, Conservative, Cloverdale—Langley City, BC]

i have a question about “attempted” transactions. Why would you put that in? It seems... I don't know.

[Justin Brown]

It could cover situations in which a transaction is attempted but not completed. For example, if it involves a financial institution and they have reason to suspect there's something illicit going on, they may, according to their own internal policies, restrict the transaction, in which case we would still want that information to be reportable and disclosable to various authorities.