Over the Rockies

A major strengthening of Canada’s regulations and programmes to fight money laundering and terrorist financing occurred last year and will continue in 2009, says Alan Osborn, going a long way towards erasing the worryingly negative impression left by the 2007 report by the Financial Action Task Force (FATF).

The 2007 report (Canada’s Third Mutual Evaluation), which was published in February 2008, accepted that Canada had strengthened its overall AML/CFT regime since the previous report in 1997 with the enactment of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and the creation of the financial intelligence unit - the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), both in 2001, but said flatly that “the preventive system is generally insufficient to meet the FATF Recommendations.” In addition, said the FATF, certain financial institutions that undertook financial activities as defined by the FATF Recommendations “are not currently covered by the AML/CFT regime” while both the scope of coverage and the AML/CFT requirements for designated non-financial businesses and professions “are insufficient to meet the FATF standards.” For good measure the FATF found that Canada was “non-compliant” in its provisions for customer due diligence.