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Anti-corruption advocate hopes new financial crime body can start ‘scaring bad guys’

One says it’s important to take ‘opportunity to look at the full package of what is financial crime’
Prime Minister Justin Trudeau speaks to reporters before heading to a caucus meeting on Parliament Hill in Ottawa, on Wednesday, May 10, 2023. THE CANADIAN PRESS/Spencer Colby

Anti-corruption advocate James Cohen says Canada’s reputation has for years been “hammered” over its weak record of prosecuting financial crimes.

But now the executive director of Transparency International Canada is hopeful there’s political will to tackle the problem, and that the establishment of the Canada Financial Crime Agency will finally start “scaring the bad guys.”

Cohen’s group released a white paper this week about the Trudeau government’s plan to create the agency, outlined in the latest federal budget, to tackle financial crime across the country.

He’s cautiously optimistic, but his organization also warns that the feds may be missing an opportunity to tackle corruption and securities fraud by focusing solely on money laundering.

The 2023 budget outlined how the Trudeau government intends to make the Canada Financial Crime Agency the “lead enforcement agency against financial crime.”

“It will bring together expertise necessary to increase money laundering charges, prosecutions and convictions, and asset forfeiture results in Canada,” the budget said. “These actions will address the key operational challenges identified in both domestic and international reviews of Canada’s (anti-money laundering/anti-terrorist financing) Regime.”

Cohen said it’s important to take the “opportunity to look at the full package of what is financial crime,” which includes corruption and bribery abroad by Canadian companies, as well as securities fraud and the often related offence of money laundering.

Cohen, who co-authored the paper with lawyer Julia Webster, law professor Julia Quaid and anti-money laundering advocate Denis Meunier, said establishing the Canada Financial Crimes Agency could improve the country’s “weak enforcement record” on financial crime.

The paper says questions loom about how the agency would operate with Canada’s disjointed enforcement regime, including provincial securities regulators, tax authorities, police and Fintrac, Canada’s financial intelligence unit.

The authors urge the Canadian government to ensure that the new organization can co-ordinate effectively between multiple agencies, and create specialized teams of investigators and prosecutors to tackle financial crimes while filling in “gaps” in enforcement.

Canada could learn from countries such as Australia and the United Kingdom, the paper says, both of which have their own national financial crime enforcement bodies.

Transparency International says the new agency’s effectiveness will hinge on many factors, including hiring more federal government prosecutors with the knowledge and expertise to tackle complex financial crimes.

Cohen said staffing issues often hamper enforcement efforts, and it’s important to retain people for years to build up expertise to effectively deal with complex money laundering and fraud cases.

Other policy developments federally and provincially, Cohen said, show governments have taken notice of the criticisms of Canada’s financial crime situation. These have come from the international Financial Action Task Force, the Cullen Commission examining money laundering in British Columbia, and in the wake of the Panama Papers leak about the role and use of anonymous shell companies.

Cohen said beneficial ownership registries unmasking hidden owners of shell companies, coupled with other tools such as unexplained wealth orders and the new Canada Financial Crime Agency, indicate that “things are starting to move forward.”

“I have cautious optimism that we’re gonna get to a good place,” he said.

“Maybe we won’t get everything we want with this agency, but hopefully we’ll get something better than nothing that will help enforcement in Canada, and help us shed our global image, help us restore Canadian confidence in our markets and our transparency, and give our law enforcement a boost of confidence that they’re getting the tools and the political will to get the job done on this and start scaring the bad guys.”

Darryl Greer, The Canadian Press

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