Madam Speaker, I am pleased to join in the debate on Bill C-22. This proposed legislation on money laundering involves transactions through financial institutions and other financial intermediaries with the intent to conceal criminal profits and make them appear legitimate.
Bill C-22 builds on the existing Proceeds of Crime Act. The legislation institutes mandatory reporting of suspicious financial transactions and of cross-border movement of large amounts of currency. It creates an independent analysis centre as has been remarked upon by the previous speaker, the mandate of which will be to receive and manage reported information.
The legislation meets commitments that Canada made as a member of the OECD and of the G-8. Canada is one of the last G-8 countries to establish such a regime. That was pointed out to a parliamentary delegation of which I had the privilege of being a part at the European Union in the month of March of this year when we had an opportunity to discuss with our European colleagues what they are doing in this regard.
In developing the bill, Canada has taken into consideration the 40 recommendations set out by the Financial Action Task Force on Money Laundering which encourages the strengthening of international co-operation with regard to the exchange of information on currency flows.
Some of the reasons this is important is that money laundering is now the world's third largest industry by value. It extends far beyond hiding profits from narcotics. It now includes trade fraud, tax evasion, organized crime, arms smuggling, bank, medical and insurance fraud. In this country alone somewhere between $5 billion and $17 billion are laundered each and every year. With those kinds of gaps, $5 billion and $17 billion, obviously nobody knows for sure how much, but it is estimated worldwide that somewhere between $300 billion and $500 billion U.S. are laundered in these ways. Tax evasion is not addressed in the proposed legislation.
The recommendation of the New Democratic Party is to support the legislation in principle. It is obvious that we should support the introduction of any legislation that curbs illegal activity. However there is some wariness on our part as to the lack of certainty and of clarity in some parts of the bill.
We think that a number of concerns should be examined and addressed further. There is a potential for charter violations. The guarantees of reasonable search and seizure appear to be at risk. For example, the Criminal Lawyers' Association argues that the standard of suspicion outlined fails to meet even the first and fundamental requirements of reasonable grounds. The legislation may also create an irreconcilable conflict for professionals, such as lawyers who remain subject to certain codes of conduct that prohibit them from disclosing information. It must also provide a mechanism to absolve an individual from potential liability that may result from disclosing such confidential information.
A second point is the possible pressure on consumers. The reporting regime set up to track and communicate suspicious transactions has at least two financial repercussions. One, there is a cost to be borne by the taxpayer for the establishment and maintenance of the tracking system. Second, in having to establish compliance mechanisms there is a concern that the cost for setting up reporting mechanisms for financial institutions will be borne by the customers of those institutions and the concern that there not be consumer gouging as a result.
A third point is with regard to the system's effectiveness. There remains a series of concerns about the planned reporting effectiveness. There is a warning that the new regime has the potential to create a bureaucratic monster and there is a chance that organized crime would be able to short circuit such a system through a series of shadowy, sophisticated transactions. We wonder whether money might not be better spent granting law enforcement and investigative bodies additional resources to detect and prosecute money laundering offences.
We are also concerned that the bill does not appear to address technology based crimes, the white collar crimes which surely we will see grow in future with the growth of the Internet and computers in general. Technology based crimes include credit and debit card fraud, telephone fraud, stock market manipulation and computer break-ins. Increasingly organized crime syndicates are using technological and digital means of communication, including encryption and scanning devices, thus potentially circumventing the provisions of this bill.
We would recommend to the government that a clearer and more precise definition of what constitutes a suspicious transaction be formulated. The subjective nature of the definition could provide an excuse for compliance failure and as a result many suspicious transactions might not be reported.
In addition, the use of a vague definition could result in institutions over-reporting for fear of involuntary non-compliance, thus creating unnecessary, unwarranted scrutiny of innocent individuals.
We think that the proposed legislation must clearly address the issue of the threat to the privacy of all Canadians and especially the possible disclosure of information to Revenue Canada should it involve a taxation matter. Obviously, strict guidelines must be established in this area. The bill must also address the possible violations of the guarantee against reasonable search and seizure in the charter of rights and freedoms.
In addition, the issue of tax-related offences could be addressed. Tax offences occur when money is transferred to offshore tax havens through companies, trusts and bank accounts. The purpose obviously is to conceal assets from Revenue Canada. Money laundering, on the other hand, involves the intent to conceal criminal profits and make them appear legitimate.
It is perplexing that even the definition of a suspicious transaction, a fundamental principle indeed, is to be determined after the legislation is passed. Many other key dispositions would be determined after that fact by regulation. These include: the appointment of the centre's director and the determination of his or her remuneration; the determination of the individuals or businesses that will be subject to this legislation and how they will report; the delay which will be granted to financial institutions to retrieve and report information; bodies and institutions which will be required to report on how records are to be maintained; the delay a financial institution must respect; and the length of time records are to be kept.
In agreeing to a bill such as this we also wonder about things like the Tobin tax which the member for Regina—Qu'Appelle brought forward. Indeed, it was passed as a private member's bill in this House. Why could that not be established with the same alacrity with which we are working in this area?
As the House knows, a Tobin tax framework would be an excellent initiative to establish an international monitoring system of currency flows.
Those are the points I wish to make. After listening to the remarks of the hon. member for Kootenay—Columbia I was pleased to note that the financial reporter for the National Post , Terence Corcoran, has many concerns about this bill. That resolves my belief that the bill is worthy of support. It is one of the few things that has resulted from the fact that the National Post is now in existence that I do not have to look at Terence Corcoran's column in the Globe and Mail .