Canada's anti-money-laundering regime even has the big banks worried
Last month, the Canadian Bankers Association (CBA) delivered an unusual submission to the House of Commons Standing Committee on Finance.
Blandly entitled “Improving Canadian prosperity, competitiveness and financial security,” the submission calls out weaknesses in the regulation, reporting and prosecution of money laundering in Canada. The Financial Transactions and Reporting Analysis Centre of Canada (FINTRAC), an analysis and supervisory body created in 2000, draws particular attention. It is supposed to “combat money laundering, terrorist activity financing, sanctions and threats to the security of Canada” by overseeing “thousands of businesses” in addition to banks, which are required to report “suspicious transactions.”
Bankers in Canada are loath to publicly criticize their supervision, fearing blow-back from regulators and their political masters who have, as the C.D. Howe Institute recently highlighted, spent the last decade piling on regulations that are causing “higher compliance costs and decreased competitiveness.”
That this criticism came through the CBA is noteworthy.
A black box to most in Canada, including many bankers, the 133-year-old organization operates today on a consensus basis, meaning Canada’s five largest banks must agree to policy statements made by the CBA. This includes Toronto-Dominion Bank, which is facing a potential US$3-billion fine tied to allegations from U.S. regulators that criminal drug gangs laundered $US653-million through TD branches in three U.S. states.
Criticizing Canada’s AML framework as lackluster now suggests it is hurting the industry’s reputation abroad, especially in the U.S.
The CBA thinks we have lots of AML sizzle and no steak — that Canadian banks are compelled to
Read more on financialpost.com
