Canada urged to improve money laundering prosecutions

The Financial Action Task Force (FATF) has urged Canada to enhance its ability to investigate and prosecute complex money laundering cases, according to a new report. The evaluation, which began in November, found that Canada possesses strong investigative capabilities but faces challenges in prosecuting professional money laundering, particularly in standalone cases.

The report suggests that Canada should bolster risk-based supervision and ensure the prioritization of complex money laundering investigations and prosecutions in alignment with its risk profile.

Canada is facing significant money laundering risks stemming from major profit-driven crimes. Data indicates that between C$45 billion and C$113 billion ($32 billion to $80 billion) is laundered annually within the country. Interviews conducted as part of the review process included representatives from the six largest banks in Canada. This review took place months after TD Bank settled the largest-ever fine imposed by the United States in a money laundering case.

The FATF highlighted that money laundering in Canada is primarily associated with drug trafficking proceeds, fraud, commercial trade fraud, and tax crimes. These illicit activities frequently involve organized crime groups and professional money laundering intermediaries. The review coincided with the indictment of former Canadian Olympic snowboarder and alleged cocaine kingpin Ryan Wedding.

While Canada has made efforts to strengthen its enforcement against illicit finance, the report notes that the country's risk-based approach to its anti-money laundering framework limits its capacity to combat financial crime when risks are relatively low. The FATF awarded Canada a "compliant" grade, acknowledging improvements since its previous assessment in 2016.

The watchdog has recommended specific actions for Canada to implement within a three-year timeframe, including enhancing risk-based supervision, focusing on the investigation and prosecution of major money laundering cases, and recovering criminal assets.