Anti Money Laundering (AML) in Canada

Money laundering is a growing problem in Canada. In recent years important changes have been made to legislation to ensure that a strong, comprehensive and operational Anti Money Laundering (AML) system is in place.

According to the Royal Canadian Mounted Police (RCMP), money is being made from entrepreneurial crime and is then disbursed through Canada’s legitimate economy. Based on their Proceeds of Crime (POC) initiative’s reports, drug trafficking is the largest single source of these proceeds and banks and real estate are the main destinations of the revenues.

The years 2007 and 2008 have been significant in the evolution of Canada’s money laundering and terrorist financing control initiatives. The key enhancement to Canada’s regulatory legislation, Bill C-25, has further expanded the reach of the law to new reporting entities, fine-tuned many of the recordkeeping and customer identification practices, and added a major level of customer due diligence through the introduction of risk assessment requirements and the need to monitor for politically exposed foreign persons. All of this has been implemented at the same time as the release of the Financial Action Task Force’s (FATF) latest evaluation of Canada’s Regime and significant changes in the senior management team at Financial Transactions and Reports Analysis Centre of Canada (FINTRAC). The RCMP are also very involved in the prevention and detection of money laundering within the country.

AML Training in Canada

The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) requires that all Canadian financial institutions implement training programs to combat illicit financial activity within the country.

The Economy of Canada

As an affluent, high-tech industrial society in the trillion-dollar class, Canada resembles the US in its market-oriented economic system, pattern of production, and affluent living standards. Exports account for roughly a third of GDP (which was approximately $1.432 trillion as of 2007). Canada enjoys a substantial trade surplus with its principal trading partner, the US, which absorbs 80% of Canadian exports each year. Canada is the US's largest foreign supplier of energy, including oil, gas, uranium, and electric power. During 2007, Canada enjoyed good economic growth, moderate inflation, and the lowest unemployment rate in more than three decades.

The five largest banks in Canada, known as the “Big Five,” are not just Canadian banks, but are instead better described as international financial conglomerates, each with a large Canadian banking division:

• Royal Bank of Canada
• Toronto Dominion Bank
• Bank of Montreal
• Bank of Nova Scotia
• Canadian Imperial Bank of Commerce

The Office of the Superintendent of Financial Institutions (OSFI) is an independent agency of the Government of Canada reporting to the Minister of Finance. It is the primary regulator of federally-regulated banks, insurance companies, and pension plans in Canada.

Canadian Currency

Currency withdrawn from circulation is still legal tender. Despite the introduction of new notes, the 1986 series $20, $50 and $100 are still occasionally used, but $1,000 notes are rare. Coins are issued by the Royal Canadian Mint while banknotes are issued by Bank of Canada, Canada’s central bank.

Other Key Statistics of Canada

Time Zone: Canada uses six primary time zones, several of which coincide with time zones found in the United States. From east to west they are Newfoundland Standard Time (NST), Atlantic Standard Time (AST), Eastern Standard Time (EST), Central Standard Time (CST), Mountain Standard Time (MST) and Pacific Standard Time (PST).

Location: Northern North America, bordering the North Atlantic Ocean on the east, North Pacific Ocean on the west, and the Arctic Ocean on the north, north of the conterminous US. (Geographic coordinates for Canada are 60 00 N, 95 00 W.)

Population: 33,212,696 (July 2008 est.)

Labor Force: As of 2006, 2% of the population was working in agriculture, 13% in manufacturing, 6% in construction, 76% in services and 3% working in another field. The unemployment rate in 2007 was listed at 6%.

Languages Spoken: Official languages are English (59.3%) and French (23.2%), however, approximately 17.5% of the population speaks another language.

Trade Organizations: Canada is one of the world's wealthiest nations, with a high per-capita income, and it is a member of the Organisation for Economic Co-operation and Development (OECD) and Group of Eight (G-8). Canada is a mixed market, ranking lower than the U.S. but higher than most western European nations on the Heritage Foundation’s index of economic freedom.