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.
3:50 p.m.
Conservative
Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC
Fine.
With regard to monitoring and disclosure, let's take the example of a problem disclosed to you by RBC. Are authorities like the RCMP informed? Are they informed at the same time as you are? How do things work?
3:50 p.m.
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
Authorities are not necessarily informed. It depends on the situation. Banks can indeed transmit information to the RCMP.
Our role, however, is to receive suspicious transaction reports and analyze them. Once we are done, we can alert the RCMP or another police force.
3:55 p.m.
Conservative
Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC
So in cases of fraud, the bank will act internally, will send a report to FINTRAC, and try to solve the problem.
3:55 p.m.
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
Yes.
3:55 p.m.
Conservative
Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC
So there isn't necessarily a police investigation at that point. Is that what you are saying?
3:55 p.m.
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
More or less.
3:55 p.m.
Conservative
Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC
It depends on the size of the fraud, I suppose.
3:55 p.m.
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
That is right. Banks have been fighting fraud for a long time.
3:55 p.m.
Conservative
Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC
Okay.
Can you tell us about external threats? We are trying to determine how to protect ourselves in Canada, but threats can be internal or external. Can you tell us where they come from, for the most part?
3:55 p.m.
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
We mostly see cases of third-party fraud.
Where cybersecurity is concerned, I think the RCMP would be in a better position to tell you whether the threats are mostly internal or external.
3:55 p.m.
Conservative
Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC
I see. This is outside of your jurisdiction.
3:55 p.m.
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
Correct.
3:55 p.m.
Conservative
Pierre Paul-Hus Conservative Charlesbourg—Haute-Saint-Charles, QC
Are there things the government could improve—which you can tell the committee—that would make the work of your organization more effective?
3:55 p.m.
Liberal
The Chair Liberal John McKay
That question might be on the borderline of inappropriate given that you're a civil service individual. I am going to allow it in the event that you wish to speculate, but generally speaking—
3:55 p.m.
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
We don't speculate.
3:55 p.m.
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
You're correct.
The regulations on digital currency exchanges related to Bill C-31 from 2014 are being drafted at this time. They should soon come into effect and this will help us with cryptocurrencies.
Virtual currency regulations will be coming in. We consulted on them last June with the Department of Finance, which had the policy lead for the regime in Canada. There were broad consultations carried out last summer. The regulations are being drafted now to cover virtual currencies, for example, virtual currency exchanges.
It will help us a great deal.
3:55 p.m.
Conservative
3:55 p.m.
Liberal
January 28th, 2019 / 3:55 p.m.
NDP
Matthew Dubé NDP Beloeil—Chambly, QC
Thank you, Mr. Chair.
I thank the witnesses for being here.
I have questions on your mandate and responsibilities and that of other agencies or police forces. More specifically, I am referring to slides 5, 6 and 7 in your presentation. I'll get back to Project Chameleon later.
How do you go about getting the information you share? You mentioned Facebook, for instance, and the fact that more and more people are sharing information like this.
Are you the ones who identify that information? Do you have employees who monitor social media? Do you then contact police so that they can act and target a particular individual?
The way in which things work is not clear. You mentioned several points, but things are not clear. What is the police's job, and what is yours?
3:55 p.m.
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
All investigations are handled by the police. We provide information specific to an entity or a person. We can receive up to 25 million reports a year, including suspicious transaction reports. We have two people who work on them. Their day-to-day work is to study these reports.
The technology enables us to identify certain keywords in order to detect a particularly interesting suspicious transaction. We can then check our database to see whether it contains other reports related to the person concerned. If we reach our threshold, we can proactively disclose the transaction to the police. The police must then decide whether to launch an investigation.
If we receive information from the police as part of an ongoing investigation, we'll check our database, as well as Facebook and other sources, to see whether we can find additional links to include in the report for the police. Our report contains only information from our database or public sources, which we collect for the police. However, the police must decide whether to conduct an investigation.
4 p.m.
NDP
Matthew Dubé NDP Beloeil—Chambly, QC
I don't want to focus too much on one example, because I know the situation can vary.
When you say that you're looking for connections on Facebook, are you looking for links to content, such as a known phishing site seeking to extract financial information, or to people, such as business relationships that an individual guilty of suspicious transactions might have with a Facebook friend? How do you identify these people and their connections?
I don't see much difference between the police's investigative work and what your organization seems to be doing.
4 p.m.
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
We provide only information, not evidence. You're referring to tradecraft.
Suppose the police are investigating you, Matthew Dubé. If we check your Facebook page—because we're preparing a report about you—and you're sitting next to Jim Eglinski in one or two photos and there seems to be a link between you two, we could verify in our database whether you've ever transferred money to each other and establish whether you have financial ties.
We don't take everything available on Facebook. It must be linked to our database. If we want to establish links and identify members of your gang, we could certainly do so. However, it would need to be in our database as well so that we could share it with the police.
4 p.m.
NDP
Matthew Dubé NDP Beloeil—Chambly, QC
I don't want to go too far beyond the scope of our study.
In the fight against terrorism, the way that police officers work generally protects innocent people and prevents them from being found guilty by association. In the example that you just provided involving a transaction with me, who has had issues in the past, the individual would be protected by the police's work. You would simply tell the police that money was transferred between us. It would then be the police's responsibility to check whether an investigation is warranted.
4 p.m.
Deputy Director, Operations, Financial Transactions and Reports Analysis Centre of Canada
Absolutely.
As I told you, we receive about 25 million reports a year, and most of them are legitimate. We don't disclose this.