Federal government pledges nearly $30 million a year to fight money laundering

Published: March 19, 2019

The 2019 federal budget is also promising $50 million for the CRA to create dedicated residential and commercial real estate audit teams in high-risk regions, including in B.C.

Justin Trudeau’s federal Liberal government promised in its budget Tuesday nearly $70 million over five years to help fight money laundering, an issue of public concern in British Columbia.

Just over $8 million will roll out this year, jumping to $15 million per year by 2020.

The funding is meant to create a money-laundering task force, increase expertise in trade-based money laundering, and support financial intelligence gathering.

Another $68.9 million over the next five years is earmarked to strengthen federal policing capacity, some of which is meant to go toward money-laundering investigations.

The Liberals are also promising to bring in criminal code changes that would lower the prosecution threshold to prove money laundering.

Critics of Canada’s anti-money laundering regime welcomed the initiatives, but cautioned they were not a cure-all, and proper implementation was necessary.

In their budget document, the Liberals said: “A first phase of concerted action will give police the resources they need to tackle financial crime and address gaps in information sharing.

“It will also dedicate new resources to identify and address complex money-laundering operations in Canada.�

Cash seized in a Vancouver police investigation dubbed Project Trunkline into drug trafficking that overlapped with money-laundering investigation E-Pirate by the RCMP. Police documents filed in BC Supreme court.

But federal NDP finance critic Peter Julian said the funding was not sufficient to address money laundering given its size and scope.

“It’s sort of a smoke screen — they are pretending they’re doing something concrete,� said Julian, the MP for New Westminister-Burnaby who was vice-chair of a parliamentary committee that examined money laundering last year.

B.C. Finance Minister Carole James said the funding was positive. “From my perspective, that recognizes the work we’re doing here in British Columbia, so I’m glad to see the feds coming to the table on that issue.�

Money laundering has been under a heavy spotlight in British Columbia, a result of revelations uncovered in a Postmedia investigation in 2017 that found potentially millions of dollars were being laundered through Lower Mainland casinos.

It sparked an independent review commissioned by the provincial government and calls by B.C. Attorney-General David Eby for more federal police officers with financial crime expertise and better sharing of information on suspicious money transactions.

A Postmedia investigation, published this February, found that money-laundering prosecutions were rare and difficult in B.C. Multiple police investigations with ties to money laundering since 2015 had resulted in at least 17 arrests, but no charges.

Christian Leuprecht, a Royal Military College of Canada professor and an expert in policing and security issues, said creating a co-ordinated money laundering approach was a significant step forward, but warned the federal government needs to get leadership right and also involve provincial forces and other agencies such as the Criminal Intelligence Service of Canada.

Leuprecht noted these types of co-ordinated efforts have had a mixed record.

“It shows the federal government realizes we have a problem,� added financial crime expert Marc Tasse, a University of Ottawa instructor.

But other issues remain, including the need for transparency of beneficial owners of companies, he said, and finding a way to police lawyers.

Transparency International Canada executive director James Cohen said he will be waiting for details on staffing and the overall mandate of the task force.

“I hope it is a team that is robust and taken seriously to do important work,� he said.

B.C. money-laundering probes include RCMP’s E-Pirate investigation that uncovered an underground bank in Richmond, Silver International, that allegedly laundered as much as $220 million a year. There was a suggestion from the Financial Action Task Force, an international body that sets anti-money laundering standards, that figure was more than $1 billion.

Charges against two accused in the Silver International case were dropped in November 2018 just before they were to go to trial, without explanation.

The most recent prosecution in B.C. in 2014, an alleged $24-million money-laundering case, failed because the evidence had not established the money was from the proceeds of crime, specifically drug trafficking.

— with file from Jennifer Saltman

[email protected]

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