Foreign Affairs Committee on Oct. 17th, 2016

[Michael Levitt, Liberal, York Centre, ON]

Ms. Ring, I was wondering if you could take us through a bit more of the disclosure and other compliance obligations that have been imposed on financial institutions by our sanctions regime. We heard that it's primarily proactive. There's not even some sort of list that's able to give them an insight into who may be on it with the onus on them.

How difficult is it for a financial institution to determine whether it's in possession or control of property designated as belonging to an individual or an entity that might be subject to the sanctions regime? What about transactions monitoring and screening processes? What are financial institutions using in that area? Can you give us a little more insight into the flow of information? I go back to my colleague's point. Is this system the reason that we're seeing so little conviction and success at the other end?

[Christine Ring]

I can speak to work that OSFI does specifically. For questions pertaining to the difficulty with respect to a financial institution's ability to search listed individuals and entities, I would suggest the committee meet with the industry to ask those specific questions.

As part of our supervisory work, OSFI looks at a variety of components. One of those is with respect to the scope of the sanction's work, and that's an institution's ability to meet its obligations to search individuals. You mentioned transaction monitoring. We also look at institutions' ability to search transactions and meet their legislative obligations.

[Michael Levitt, Liberal, York Centre, ON]

Thank you.

Superintendent Nordstrum, as we've seen here and abroad, sometimes lists like these contain errors, and we've heard of situations with things like no-fly lists where people with a similar name end up getting caught in the process. Have there been individuals or entities that have inadvertently been caught by these sanctions, cases that you hear about in trying to prosecute them? Is there any margin for error inherent in the system?

[Supt Steve Nordstrum]

There's been none to my knowledge. I look to my colleague, here, who says that very few times do we get mistaken identity issues such as you've just raised.

[Michael Levitt, Liberal, York Centre, ON]

Thank you.

[The Chair, Liberal, Bob Nault]

Mr. Kmiec, go ahead, please.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Thank you all for coming in today.

I'm going to start with you, Ms. Ring.

What happens if a credit union or a quasi-bank, like ATB Financial, which is not directly regulated by OSFI, has questionable transactions? Are they receiving training as well? Do they get any oversight from you, any assistance in tracking potentially illegal transactions?

[Christine Ring]

The entities that you mentioned do not fall within the scope of OSFI's mandate. Credit unions fall under the scope of FINTRAC. I would suggest the committee may want to ask the question of FINTRAC.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Okay. What about ATB Financial? It's a quasi-bank in Alberta, owned wholly by the Alberta government.

[Christine Ring]

Is it registered as a money service business?

[Tom Kmiec, Conservative, Calgary Shepard, AB]

It has its own act.

[Christine Ring]

It has its own act. It may fall under provincial regulation.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Okay.

[Christine Ring]

That again would be outside of OSFI.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Is FINTRAC effective, then?

[Christine Ring]

I'm not in a position to comment on the effectiveness of another agency.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

But you do interact with it?

[Christine Ring]

We do interact.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Do you find it effective, then? You're saying that it covers credit unions. How effective is that? Do you know?

[Christine Ring]

I do not know.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Okay.

Maybe we'll just switch to you, sir. Superintendent, thank you for coming in.

I just want to start with a question on investigations. I'm not going to ask specifics about them. I'd like to know whether you are aware of how many times you've received information from United States sources, using their Magnitsky Act, to either inform or start off investigations in Canada.

[Supt Steve Nordstrum]

I have no knowledge of any, but I will ask Sergeant Hart.

He is not aware of any.

[Tom Kmiec, Conservative, Calgary Shepard, AB]

Okay. Is it possible that the RCMP has received it through a different office and that this information is passed on?

[Supt Steve Nordstrum]

That question would be for Sergeant Hart.

[Sergeant Peter Hart, Federal Policing Criminal Operations, Royal Canadian Mounted Police]

Could you say that again, sir? I couldn't quite hear you.