Good morning, Mr. Chair and honourable members of the committee.
My name is Chief Superintendent Michael Saghbini. I'm the director general for financial crime within federal policing criminal operations at the Royal Canadian Mounted Police, the RCMP. I'm joined by acting Staff Sergeant Chad Babin, a subject matter expert in financial crime within federal policing criminal operations.
I am honoured to speak to you all today from the traditional territory of the Algonquin Anishinabe people.
I'll begin with a brief description of the RCMP's role. Financial crime is a priority for the RCMP and is part of its mandate to protect Canada's economic integrity. We work closely with the Canada Revenue Agency, the CRA, which is the lead department responsible for investigating tax evasion related to offshore tax havens. As you know, the CRA has its own investigative capacity through its criminal investigations directorate and is well positioned to investigate tax evasion cases in close collaboration with law enforcement agencies like the RCMP.
The RCMP plays an important support role on this issue. We are not a primary recipient of tax information, but we may become involved in investigations, especially when they intersect with such other criminal activities as money laundering, fraud and corruption. In these cases, the RCMP collaborates with the CRA; the Financial Transactions and Reports Analysis Centre of Canada, better known as FINTRAC; and international partners to investigate and prosecute individuals or entities that use tax havens to hide illicit funds.
We know that tax evasion and other tax crimes have serious consequences, as they lower government revenue and undermine public trust in Canada's tax system. Tax-related crimes are also part of complex schemes that allow criminals to benefit from the proceeds of their crimes and use those funds to further their criminal activities. Proceeds from illegal activity are routinely wired through tax haven jurisdictions, whose opaque financial structures, such as offshore banks, shell companies, trusts and law firms, decouple illicit wealth from its original owner.
In “Understanding Canada’s 2025 National Risk Assessment of Money Laundering and Terrorist Financing”, tax evasion is listed as a high money-laundering threat to the Canadian economy. Unfortunately, we know that sophisticated organized criminal groups use complex money-laundering networks to leverage the global financial system to hide income and assets. This often includes using offshore locations and companies to hide and launder large amounts of money.
Tackling this through a multi-agency and law enforcement approach can be effective. For example, you may be familiar with Projet Collecteur, a joint investigation between the CRA's criminal investigations directorate and the RCMP. This investigation uncovered a large professional money-laundering network spanning several countries and leveraging money service businesses and informal value transfer systems. Several people were charged and convicted as a result of this investigation, including for tax evasion and related crimes.
Many factors can impact law enforcement's ability to investigate tax evasion occurring in a tax haven. As with other kinds of financial crime, tax crime methods continue to evolve. This is particularly the case with the increasing use of digital currency, which is still unregulated in certain jurisdictions and is very hard to trace. As well, the speed at which digital currency moves can sometimes outpace law enforcement and other agencies' efforts.
As well, transnational crime poses jurisdictional challenges for law enforcement. Those in law enforcement are dependent on international partners delivering timely results. Offshore jurisdictions can sometimes delay or limit the provision of information. That said, in recent years progress has been made in Canada and other countries to address gaps that allow for criminals to use tax havens for their benefit.
For example, new laws and regulatory requirements in Canada around beneficial ownership will assist in organized crime and money-laundering investigations by identifying the real individuals.
