FINTRAC publishes indicators on the laundering of proceeds from illicit cannabis in support of Project Legion
September 28, 2022, Ottawa Ontario
FINTRAC published today its latest Operational Alert, Laundering of Proceeds from Illicit Cannabis, in support of Project Legion. This Operational Alert is meant to assist businesses subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act in better identifying and reporting to FINTRAC financial transactions related to the laundering of proceeds from illicit cannabis activities.
Although the Cannabis Act, which provides the legal framework controlling the production, distribution, sale and possession of cannabis across Canada, came into force in 2018, 37% of respondents to the Canadian Cannabis Survey 2021 disclosed that they obtained some or all of their cannabis from illegal/unlicensed sources, including unregulated/unauthorized retailers and storefronts.
This illegal cannabis market harms Canadians and Canada’s financial system through the significant loss of tax revenue. The profits generated by the sale of illicit cannabis are also used by organized crime groups to fund other illegal and harmful activities in communities across the country.
FINTRAC’s Operational Alert, Laundering of Proceeds from Illicit Cannabis, was developed in collaboration with law enforcement and Canada’s largest banks to advance and facilitate Project Legion, Canada’s most recent public-private partnership. Led by TD and supported by law enforcement agencies and FINTRAC, Project Legion is focused on enhancing awareness of the harm associated with illicit cannabis activities and strengthening the detection of the laundering of proceeds from this crime.
With the reports received from businesses subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, FINTRAC is able to generate and disclose actionable financial intelligence to Canada’s law enforcement agencies in support of their money laundering investigations.
“We are committed to working with our partners and Canadian businesses to protect Canada’s financial system and help deprive organized crime groups of the funding they need to pursue their criminal activities that are so harmful to our communities and our most vulnerable citizens. Through the dedicated efforts of Canada’s largest banks, in particular, and the financial transactions they report, FINTRAC is able to harness the power of financial intelligence to help identify and target the criminals and organized crime groups engaged in illicit cannabis activities and other financial crimes.”Sarah Paquet, Director and Chief Executive Officer, FINTRAC
“At TD, we are committed to playing a leading role in advancing financial crime risk mitigation. We welcome this opportunity to collaborate with FINTRAC with the goal of detecting and deterring laundering of proceeds from illicit cannabis activities. This coordinated effort will help protect the integrity of our financial systems and contribute to the safety of communities across Canada.”Mike Bowman, Chief Anti-Money Laundering Officer, TD Bank Group.
- As Canada’s financial intelligence unit and anti-money laundering and anti-terrorist financing regulator, FINTRAC ensures the compliance of more than 24,000 businesses subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and generates actionable financial intelligence for Canada’s law enforcement and national security agencies.
- With the information that FINTRAC receives from its regime partners and businesses across the country, the Centre also produces valuable strategic intelligence in the fight against money laundering and terrorist activity financing. Through the use of analytical techniques, FINTRAC is able to identify emerging characteristics, trends and tactics used by criminals to launder money and fund terrorist activities.
- Based on a review of 5,000 suspicious transaction reports received between March 2020 and March 2021, FINTRAC’s Operational Alert describes the methods used to move funds derived from illicit cannabis activities and provides a series of money laundering indicators related to these unlawful activities.
- Project Legion is modelled after Canada’s other successful, ongoing public-private partnerships, which are aimed at combatting the laundering of proceeds stemming from human trafficking for sexual exploitation (Project Protect), online child sexual exploitation (Project Shadow), the illicit trafficking of fentanyl (Project Guardian), romance fraud (Project Chameleon) and money laundering in British Columbia and across Canada (Project Athena).
- In 2021–22, with the information that it received from Canadian businesses, FINTRAC provided 2,292 disclosures of actionable financial intelligence in support of money laundering and terrorist financing investigations to Canada’s law enforcement and national security agencies, adding to the more than 24,000 disclosures that the Centre has generated since becoming operational in 2001.
- FINTRAC’s financial intelligence very often contains hundreds or even thousands of financial transaction reports in each disclosure, which speaks to the complexity of connecting the flow of illicit funds involving organized criminal groups.
- FINTRAC’s disclosures are often provided to a number of agencies simultaneously when the Centre has the authorization to do so. This ability to provide multiple disclosure packages means that FINTRAC can help Canada’s law enforcement and national security agencies connect criminal activities and operations across a number of domestic and international jurisdictions by following the money.
- In 2021–22, FINTRAC’s financial intelligence contributed to 335 major, resource-intensive investigations and hundreds of other individual investigations at the municipal, provincial and federal levels across the country.
Categories: Anti-Money Laundering FINTRAC Updates Marijuana Related Businesses Operational Alerts Red Flags/Indicators
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