Canada: Truckers’ Freedom Convoy Sheds Light on Country’s AML Weakness

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It appears these truckers have accomplished one thing in spite of everything else. Sure, the means are arguable as they have pushed the capital’s residents to the edge. Trucks have disrupted Canada/US border and created heavy burden on the Canadian economy by blocking the downtown core facing the countries parliament. 

But the true triumph of the so-called Freedom Convoy has completely nothing to do with its ostensible objective of protesting COVID-19 vaccine mandates. Nope.

As it seems, these horn-blaring, hockey-stick-wielding, flag-waving rabble-rousers have pulled off a feat that has eluded even the most erudite financial-crime consultants. Not solely have they uncovered shortcomings in Canada’s anti-money-laundering and anti-terrorist-financing regime, they’ve spurred the Trudeau authorities to repair them, a minimum of quickly. And in comparatively brief order, in addition.

Police make arrests in Ottawa as convoy protesters ignore orders to go away.

Financial establishments have began freezing protesters’ financial institution accounts primarily based on RCMP info, Chrystia Freeland says

Thanks for that, fellas – oh, and for forcing the authorities to lastly confront the menace posed by far-right extremist organizations, too. You good ol’ boys gave our parliamentarians one heck of an actuality verify.

But right here’s the factor for us law-abiding. There’s a real threat that Ottawa’s choice to quickly increase the energy of banks, insurers and different financial-services firms to freeze protest-related accounts and halt monetary help for the blockades may backfire in a giant method.

Don’t misunderstand: crowdfunding platforms and different fee service suppliers, together with these coping with cryptocurrencies, ought to be required to submit suspicious transaction stories (STRs) to the Financial Transactions and Reports Analysis Center of Canada, the federal anti-money-laundering company. Their exclusion from the federal regime has hindered Canada’s skill to fight monetary crime.




Trouble is, owing to years of underinvestment by Ottawa, FinTRAC merely lacks the manpower to take care of a flood of new STRs. Given the broad scope of the federal order – it requires a variety of firms to stop offering monetary companies to accounts linked to the blockades – it’s simple to see how the monetary intelligence watchdog may turn out to be overwhelmed.

Consider this: FinTRAC has roughly 127 full-time workers engaged on its compliance crew and about 116 workers devoted to manufacturing and dissemination of monetary intelligence, in keeping with its newest departmental plan.

That’s not a lot of folks, contemplating that FinTRAC acquired 386,102 STRs from companies throughout Canada throughout its 2019–20 monetary 12 months alone. Keep in thoughts that FinTRAC additionally receives hundreds of thousands of different monetary transaction stories every year, together with these for giant money transactions, digital funds transfers and cross-border foreign money actions, amongst others.

In truth, the Basel Institute on Governance, an unbiased non-profit that combats corruption and monetary crime, just lately urged Canada to dedicate “a lot more human and technological resources” to countering money-laundering and terrorist-financing dangers, as a result of a rise in the quantity of STRs was already “putting competent authorities under additional pressure.”

The RCMP, in the meantime, additionally lacks ample assets to analyze cash laundering, in keeping with a separate overview performed in British Columbia again in 2019.

Recall, the RCMP shuttered their nationwide proceeds-of-crime and commercial-crime sections in 2012 (which specialized in money-laundering investigations), stopped investigating white-collar crimes for 5 years and have been making an attempt to revive that misplaced experience ever since.

Now, of course, our federal police are taking part in an important function in the authorities’ present crackdown on the unlawful truck blockades. What may presumably go incorrect?

Financial establishments have already begun freezing an undisclosed quantity of financial institution accounts belonging to the protesters. But considering that Canada has a poor monitor report of investigating and prosecuting monetary crime, the chances are high that these strikes will really lead to profitable convictions.

Worse nonetheless, what if this merely amounts to a make-work task that distracts FINTRAC and the RCMP from sussing out much more harmful threats to Canada’s nationwide safety?

Finance Minister Chrystia Freeland has stated that, as soon as these emergency measures expire, the authorities will introduce laws that expand FinTRAC’s powers on an everlasting foundation. But let’s hope Ms. Freeland additionally makes use of this spring’s federal funds to supply vital funding boosts to FinTRAC and the RCMP.

While she’s at it, she also needs to be certain that FinTRAC has the skill to share info with banks and different monetary companies’ suppliers on an unbroken foundation. Her remarks earlier this week indicated federal establishments got this authority as half of the new emergency measures, however these powers ought to be made everlasting.

There have been complaints that FinTRAC features like a black gap as a result of it having no skill to ask banks and different companies follow-up questions on the STRs that these entities flag for overview. That one-way stream of info has prevented FinTRAC from requesting further details about suspicious prospects.

Ottawa also needs to be certain that banks are given an everlasting “safe harbor” – a provision that shields them from authorized legal responsibility in the event that they take part in data-sharing partnerships to catch criminals.

U.S. banks have benefitted from such protections for greater than 20 years. Sadly, it has taken a nationwide emergency for Ottawa to supply such authorized indemnity to banks, however solely on a short lived foundation.

These unlawful blockades have highlighted why Canada can’t afford to take a ham-fisted method to combatting monetary crime.

Countless consultants have urged Ottawa to shut these gaps over the years. But maybe these loutish truckers will encourage the authorities to lastly get ‘er carried out.


February 17, 2022, published by The Globe and Mail.

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