Evidence of meeting #145 for Public Safety and National Security in the 42nd Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was enforcement.
A recording is available from Parliament.
NDP
Matthew Dubé NDP Beloeil—Chambly, QC
On page 6, you talk about a public-private partnership and money laundering.
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
Yes.
NDP
Matthew Dubé NDP Beloeil—Chambly, QC
In the field of cybersecurity, there's a major debate regarding whether the public or private sector is best and how to strike a balance between the two sectors. For example, banks brag a great deal about what they've done, but I imagine that they often work with you. Does your organization have any ideas on how to find this balance?
You're not necessarily here to develop policies, but you implement them. Is there a balance that would enable you to do your job well and that would enable the private sector to continue innovating to protect consumers?
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
We're already carrying out three projects as part of public-private partnerships. In this area, we're working with the police and the private sector to develop indicators, whether the issue concerns money laundering related to human trafficking, fraud or the sale of fentanyl. So far, this has been very successful. Everyone seems to be working in their field and doing what they can. They're working very well together. We're receiving many more suspicious transaction reports. We've found that the development of indicators that are as specific as possible for a category of crime increases the quality and quantity of the suspicious transaction reports that we receive.
Liberal
The Chair Liberal John McKay
Thank you, Mr. Dubé.
Somehow or another, the Dubé-Eglinski gang doesn't strike you as something that puts fear in your heart.
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
I just thought I would bring the members together a little bit.
Liberal
The Chair Liberal John McKay
Yes. That is a strange arrangement.
Mr. Spengemann, you have seven minutes, please.
Liberal
Sven Spengemann Liberal Mississauga—Lakeshore, ON
Thank you, Mr. Chair.
Thank you both for being here today.
I want to spend a couple of minutes talking about terrorist financing, the origin of FINTRAC in 2000 and the impetus in 2001 of 9/11.
I had the chance to work in the civil service between 2003 and 2005 on smart regulations. FINTRAC was an interlocutor in that exercise with the North American security perimeter. It's now 2019. Can you talk about what the trend lines have been for terrorist financing and how you work continuously to keep Canadians safe? I also serve on the defence committee, so there's a direct connection there into that line of work. How important is the work you're doing in the field of terrorist financing today, and what trend lines do you see?
Dan Lambert Assistant Director, Intelligence Operations, Financial Transactions and Reports Analysis Centre of Canada
The issue of terrorist financing is one that has evolved in relation to FINTRAC. Going back to some of the things Mr. MacKillop was speaking to, after FINTRAC was formed and we were working with the banks and so forth, things like fraud were things that the banks were used to and were able to report on quite easily. The threat environment has evolved over time. The banks are looking for increasing assistance from an organization like FINTRAC in relation to being able to track terrorist financing, especially because the amounts used in terrorist financing are usually very low.
We've worked very closely with the banks over the last number of years to provide them with adequate indicators of what to look for in relation to their transactions. In that vein, we work very closely with the Canadian Security Intelligence Service and the national security side of the RCMP. We've had an evolving relationship with the banks in relation to how we disclose.
Liberal
Sven Spengemann Liberal Mississauga—Lakeshore, ON
It remains as true today, then, as it did then, that the disruption of finance networks is fundamental to our work in the fight against terrorism.
Assistant Director, Intelligence Operations, Financial Transactions and Reports Analysis Centre of Canada
Yes.
Liberal
Sven Spengemann Liberal Mississauga—Lakeshore, ON
In your assessment, is the reporting threshold of $10,000 still relevant? Are there means to circumvent that in terms of the aggregation of amounts elsewhere through other channels? Is there a layer of analysis that escapes you because of the threshold?
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
For the most part, the threshold remains useful. As Mr. Lambert just mentioned, when it comes to terrorist financing, those thresholds mean very little, because we don't see that many transactions linked to terrorist financing that would be of that amount.
What it really comes down to is the type of analysis and the type of work we can do with our reporting entities; the type of education we do; the awareness and the outreach; and the development of the indicators related to specific types of crime, whether it's terrorist financing or others, and how we can get those indicators out. We recently published what we call our STR trilogy, which is really guidance on how to fill out an STR, a suspicious transaction report, and on how we can look in very specific areas, whether it's with money services businesses or others, and at what types of indicators are more specific to them. That's the type of proactive and partnership work that we have to do with our reporting entities that will continue to lead us to quality reporting.
Liberal
Sven Spengemann Liberal Mississauga—Lakeshore, ON
Okay.
From a criminal justice perspective, is your mandate limited to money laundering and cyber-fraud as far as offences are concerned?
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
Money laundering, terrorist financing and threats to the security of Canada.
Liberal
Sven Spengemann Liberal Mississauga—Lakeshore, ON
Would straight data hacking be part of that mandate, for example, the theft of data rather than the theft of money or the fraudulent diversion of funds?
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
No, we wouldn't see that unless it was a hack on a bank and a whole lot of ideas were taken, or there was money taken or ransomware. For that type of hacking, we might see it in the reporting as a suspicious transaction report, for example.
Liberal
Sven Spengemann Liberal Mississauga—Lakeshore, ON
If it's a hybrid offence, if somebody's involved in hacking but also there's an adjunct fraudulent component to the crime, what's the delimitation of responsibilities between you and whatever other agencies come in to look at the hacking side?
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
We would not be involved in that.
Again, we're limited to the reports we receive. We can only analyze the reports we receive and then disclose on those. Unless there were a connection made in an STR, for example, that was specific to that, we probably would not see that.
Liberal
Sven Spengemann Liberal Mississauga—Lakeshore, ON
Do you work closely with our international partners and allies, specifically the Five Eyes, in the field of cybersecurity?
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
No, not in the field of cybersecurity, other than in understanding the use of cryptocurrencies, mixers, how money is being transferred and those kinds of things, and money coming in and out of the virtual currency world. We work with them on trends and topologies and so forth.
Liberal
Sven Spengemann Liberal Mississauga—Lakeshore, ON
How do you see Canada being positioned within the group of Five Eyes, and maybe more broadly globally, in terms of the effectiveness of the work that we're doing? Are there any gaps that this committee might be interested in exploring?
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
I'm not sure that I can speak generally to how Canada is viewed on cybersecurity issues. Perhaps the RCMP may be able to speak to that. In terms of financial intelligence units, we're very well respected.
Liberal
Sven Spengemann Liberal Mississauga—Lakeshore, ON
The last sort of theme that I wanted to look at is the idea that good cybersecurity in Canada is good for business. In other words, if we have a basic platform of good cybersecurity through public-private partnerships, it will attract foreign direct investment because Canada is a safe place to operate.
To what extent are we doing well on that front with respect to the partnerships you have with banks and the way they are protected against attacks or other ways of financial online cyber-fraud? Is there anything more that we could do and that we should examine more closely?