Canada’s Federal Anti-Money Laundering Resources Are Unreliable: BC Public Inquiry

All flash and no (illicit) cash. That was the key takeaway from the Cullen Commission‘s final report looking at BC’s money laundering problem. Despite Canada talking a big game on anti-money laundering, its policies are ineffective. The Commission condemned federal anti-money laundering resources, and found Canada ignored the province’s calls for help. Austin Cullen, who led the Commission, concluded Federal resources aren’t reliable. The Province should therefore establish its own dedicated anti-money laundering enforcement team.

Canada’s Anti-Money Laundering Plan Is Mostly Just For Show

Canada dedicates significant resources to anti-money laundering, but they’re just for show. They might as well not exist, as the intentional complexity introduced makes them useless. It’s like they were designed to catch no one. 

The Commission warns, “Over the past two decades, the federal government has enacted increasingly complex legislation aimed at addressing money laundering activity. However, serious questions have been raised about the effectiveness of that regime in relation to money laundering in the province of British Columbia.” 

Canada’s anti-money laundering watchdog FINTRAC hasn’t been much help. According to the Commission, FINTRAC received 31 million reports in the 2019-20 money laundering season. During that period only 2,057 were referred to law enforcement and just 355 to BC law enforcement. We’ve pointed this out before — this isn’t a one-time issue but a longer-term trend despite more resources and reports. The commission points out Canada submits 12.5x more reports per capita than the United States.

Canada’s Anti-Money Laundering Agencies Aren’t Reliable

Even worse, almost no laundering is ever pursued. The Commission found only two major investigations from 2015 to 2020 in BC. “There was no sustained effort to investigate money laundering activity in British Columbia,” reads the report. 

The report repeatedly references BC requesting more help from the Federal Government. Unfortunately, those requests were largely ignored. It was an open secret, but calls for help went unanswered.

The Commission provided significant criticism of Canada’s anti-money laundering resources. At one point they even condemned the anti-money laundering intelligence agency.

“Law enforcement bodies in British Columbia cannot rely on FINTRAC to produce timely, useful intelligence about money laundering activity that they can put into action,” remarks Cullen. 

BC Should Establish Its Own Anti-Money Laundering Watchdog

BC might take charge of its own future if a key recommendation is followed. “I therefore recommend the creation of a dedicated provincial money laundering intelligence and investigation unit to lead the law enforcement response to money laundering in this province,” suggests Cullen. 

The new unit would serve two key roles: 1) identifying, investigating, and disrupting sophisticated money laundering, and 2) training and supporting other investigators in the investigation of the money laundering and proceeds of crime.

Establishing its own anti-money laundering team won’t be cheap, but may not cost a lot. The commission suggests a significant portion may be recovered through asset forfeiture. 

Due to limits of the inquiry, it couldn’t make Federal recommendations. That’s understandable but unfortunate considering transnational money laundering is, well, not a provincial issue. Stopping the flow of illicit cash within a province would be extremely difficult. At the same time, illicit cash flows where it has the least resistance. Only stopping it in BC means the laundering just moves provinces.

A Transparency International analysis we had the pleasure of helping with, revealed billions in anonymous cash flowed into Greater Toronto real estate. As we’ve pointed out before, even a little money laundering can have a big impact on real estate prices. It can distort the whole comp system.

One would assume a provincial inquiry would pique Canada’s interest without recommendations. However, for some odd reason it hasn’t. Canada was actively disassembling more financial crime resources during the inquiry.  

9 Comments

COMMENT POLICY:

We encourage you to have a civil discussion. Note that reads "civil," which means don't act like jerks to each other. Still unclear? No name-calling, racism, or hate speech. Seriously, you're adults – act like it.

Any comments that violates these simple rules, will be removed promptly – along with your full comment history. Oh yeah, you'll also lose further commenting privileges. So if your comments disappear, it's not because the illuminati is screening you because they hate the truth, it's because you violated our simple rules.

  • Jamie Price 6 months ago

    How much pressure did the Fed provide on them to not criticize the methodic removal of all anti-money laundering resources?

    • Trader Jim 6 months ago

      My understanding is they were asked to stick to their scope, but then additionally drop securities which were in its scope. Forbes called it Scamcouver — the stock market fraud capital of the world… in 1989. No one’s addressed it since.

  • Ian Brown 6 months ago

    Slippery slope to Americasville when provinces feel the need to start managing its own borders independently.

  • Trader Jim 6 months ago

    Not great, and I thought the criticism wasn’t going to be very harsh since they were told not to comment on BC securities and Federal recommendations.

    Imagine how bad the whole situation is.

  • Jay 6 months ago

    I don’t usually complain but this article is really bothering me since I knew this was been going on for many years reading it in the papers hearing it from Sam Cooper he had a huge blog on it in black-and-white and this useless government did absolutely nothing but make it harder for people so my belief is that Canada is in the top three crime countries in the world led by a useless government .
    Call pathetic.

    • George 6 months ago

      There is an expression in a foreign language “Going to Canada” which means Money Laundering…

  • Heather 6 months ago

    I was directed by this site to read Sam Cooper’s ‘Wilful Blindness’ about real estate and drugs in Vancouver over the past 30 years.
    Since the Feds didn’t help, I can only think they are in on the take too.
    Thirty-one MILLION complaints??? Well, get a bunch of them, plug the names in a computer system, and find the repeat offenders. Arrest, detain, fingerprint, iris scan, DNA test, pull all passports, and do forfeiture on everything in Canada. Send notices to every law enforcement agency on the planet. Gee, a bit of work, but really, we are talking about the financial future of Canada.
    I guess Silver Donald Cameron who wrote ‘Blood in the Water’ was right too. Canada’s laws don’t work anymore.

  • Ron Bruce 6 months ago

    If the Federal or Provincial governments implemented half the recommendations made by the Cullen Commission, it would take five years to turn the corner because there are so many organizations aiding and abetting the process. Realtors, Banks, lawyers, notaries, accountants, the immigration department, policing organizations and others have become accustomed to having their hands in the cookie jar.
    It’s like having another economy hiding below the surface, where most taxpayers don’t get a chance to participate but are the recipients of the economic consequences.

  • backwardsevolution 6 months ago

    “It’s like they were designed to catch no one.”

    That’s exactly what they were designed for, and all done with purposeful intent. Whenever you see a purposeful lack of transparency, you know there is a game afoot.

    First, they pretend they don’t see a problem, knowing full well there is a huge problem. Second, when people start screaming at the government to investigate, they vaguely admit there MIGHT be a problem, then set up a government overseer. Third, they instruct the overseer to do nothing. Fourth, when the government is called out again for doing nothing, the government resorts to calling people “racists” in order to shut them up.

    Everybody and his brother knew this was going on, yet nothing was done. When the truth is finally revealed, the government feigns ignorance: “We had no idea!” LOL

    I remember a Chinese fellow saying that around 2015/2016 the smaller Chinese manufacturers were having trouble. He said they decided there was more money to be made in the Canadian housing market than they could make in China, so that’s where they decided to put their money.

    Follow the money. Look at the people who have benefited from this: politicians, lawyers, notaries, banks, realtors, large construction companies, etc. They all lobbied hard to keep the game going, but in the process they ruined a country.

Comments are closed.