Canada should strengthen its investigation and prosecution of sophisticated money laundering cases, the Financial Action Task Force said on Tuesday.
The report, following an evaluation that began in November, said that despite strong investigative capacity, Canada struggles to prosecute professional money laundering, particularly in standalone cases.
“The country should improve (its) effectiveness of risk-based supervision and ensure it prioritizes investigation and prosecution of complex money laundering cases in line with its risk profile,” the report said. “Canada faces material money laundering risks driven by major profit-generating crimes.”
Some $45 billion to $113 billion (US$32 billion to US$80 billion) is laundered in Canada annually, according to government data.
Reuters reported last year that interviews during the review process included the big six banks, just months after TD Bank paid the largest-ever fine to settle a U.S. money laundering case.
Money laundering in Canada is mainly linked to proceeds from drug trafficking, fraud, commercial trade fraud and tax crimes, often involving organized crime groups and professional money laundering intermediaries, the FATF said. The review coincided with new indictments against former Canadian Olympic snowboarder and alleged cocaine kingpin Ryan Wedding.
Canada, a G7 nation, had taken steps to strengthen its enforcement against illicit finance, but the risk-based approach to its anti-money laundering framework limits the country’s ability to fight financial crime when risks are lower, the report added.
The FATF awarded Canada a compliant grade, noting improvements compared to its previous report in 2016. The watchdog also recommended actions for Canada to complete within three years, including strengthening risk-based supervision, focusing on investigating and prosecuting major money laundering cases and recovering criminal assets.
Finance Minister Francois-Philippe Champagne said the planned Financial Crimes Agency will improve the country’s capacity to combat complex financial crimes. He said the report validates the steps Canada has already taken to meet global standards and maintain a robust anti-money laundering system.
Canada will review and adopt the FATF’s recommendations, Champagne said in a statement.
(Reporting by Nivedita Balu; Editing by Rod Nickel)
