Is Canada giving up on tackling terrorist financing?
FINTRAC annual report 2022-2023
It’s the most wonderful time of the year! FINTRAC’s annual report dropped last week. Okay, I’ll admit that I’m probably the only one that excited about this report. But for those of you who don’t know, this report is one of the most transparent descriptions of the activities of a department or agency in the Canadian security and intelligence service. And while I’m often annoyed about our lack of measurements in the anti-money laundering and counter-terrorist financing world, this report at least gives us ~some~ insight. Read to find out how Canada is doing in its fight against money laundering, terrorist financing, and other financial crimes!
In 2022-2023, FINTRAC was involved in a number of initiatives, primarily relating to drugs, human trafficking, and fraud, but the Centre has also launched an initiative to tackle wildlife crime.
FINTRAC has also engaged heavily on sanctions. FINTRAC is part of the Russia-related sanctions and illicit financing financial intelligence units working group (now that’s a mouthful!). The RCMP also noted FINTRAC’s engagement on this issue, saying that
“as a result of speaking to FINTRAC, [they] learned a lot about a Russian individual and his involvement in the Canadian economy.” They believe that the collaboration between FINTRAC and the RCMP resulted in this individual being sanctioned.
That’s quite the feedback! And it’s also a good thing that the government recently announced plans to change FINTRAC’s mandate so that they can more robustly engage on this issue. There’s clearly demand, and FINTRAC’s mandate was unnecessarily narrow in this regard.
FINTRAC also told just us that 96% of the feedback they received on their disclosures was positive. This is based on 190 disclosure feedback forms (out of a total of 2085 disclosures). So over 90% of disclosures did not receive feedback. I think there’s more to follow-up on here, and probably some room for improvement for FINTRAC. I’d be particularly curious to know what the negative feedback said.
Transparency takes a hit
But you know what’s missing? A huge piece of data that FINTRAC usually provides — the breakdown in what types of activities they’ve disclosed. Since the very start, FINTRAC has been publishing how many of their disclosures relate to money laundering, terrorist financing, and threats to the security of Canada. This is a critical piece of information for people trying to figure out what value this regime brings to Canada and the international financial system. Omitting this is a huge step back for public safety transparency in Canada.
I spoke to FINTRAC about this omission, and it was deliberate, because many non-experts find it confusing and mis-interpret the stat. I find it incredibly disheartening that lack of knowledge of our system reduces transparency. However, FINTRAC kindly provided that information to me, and I’ve included it below, including what I hope is a robust description of what it actually means.