The Financial Transactions and Reports Analysis Center (FINTRAC) of Canada has published its new Sectoral and Geographic Advisory on ‘Underground Banking through Unregistered Money Services Businesses’. The primary objective of this guidance is to aid individuals and businesses in protecting themselves against illicit activities related to underground banking. The advisory also aims to facilitate the reporting of suspicious transactions to FINTRAC.
FINTRAC has prepared this advisory based on its analysis of underground banking-related data from suspicious transaction reports and law enforcement financial intelligence. The advisory discusses the characteristic traits of underground banking in Canada. Special emphasis has been laid upon the unregistered money services businesses in Metro Vancouver, the Greater Toronto Area, and the Calgary-Edmonton Corridor.
FINTRAC recognizes that underground banking is an important way for diaspora communities to send and receive legitimate funds to and from abroad. However, the global outreach of underground banking is what makes it a soft target for ML/TF-related misuse by criminal groups. Thus, it is mandatory for money services business to officially register themselves with FINTRAC.
The advisory further emphasizes that professional money launderers play a major role in underground banking. They can be entrepreneurs, lawyers, real estate agents, or accountants – anyone with the skills to transfer or convert criminal proceeds through underground banking.
Source: FINTRAC, Canada