The Commission of Inquiry into Money Laundering in British Columbia, headed by Commissioner Austin F. Cullen, has released its final report on money laundering in the Canadian province of British Columbia. The report reviews the state of money laundering in British Columbia and proposes several recommendations that could help the province address its money laundering concerns. Some highlights from the report are discussed below.
The report recognizes that British Columbia is has many sophisticated money launderers who are laundering large sums of illicit funds. It is, therefore, necessary to identify and address the weaknesses in the current AML program. Canada’s financial watchdog FINTRAC has been largely ineffective because it only forwards a small percentage of the reports from public- and private-sector reporting entities to law enforcement. Thus, British Columbia should have its own intelligence and investigation unit to effectively identify and tackle ML threats.
The Commission has also recommended the establishment of the AML Commissioner, an independent office responsible for strategically overseeing (and reporting on) the provincial response to ML. Specifically, the Commissioner will be responsible for issuing publicly-available annual and special reports on ML risks and responses in British Columbia. The Commissioner will also support and guide research on ML issues. Moreover, the AML Commissioner will advise the government, law enforcement and regulatory bodies on ML policies.
British Columbia’s gaming industry also requires continued vigilance and improvement. Specifically, the Commission proposes that the threshold for requiring proof of the source of funds should be reduced to $3,000. Similarly, the real estate sector in British Columbia is also quite vulnerable to ML. This is primarily because most real estate agents and brokers do not have training in compliance or AML measures. FINTRAC must provide clear and simple guidance related to the reporting of suspicious transactions in this sector. The report also recommends that Canada’s AML/CFT law should include mortgage brokers as reporting entities. Additionally, the province should establish a publicly accessible beneficial ownership registry to address the risks associated with companies. The province must also regulate virtual asset service providers.