Canada still a jurisdiction of concern for money laundering says U.S.

By Christine Duhaime | March 10th, 2012

Canada was listed as a jurisdiction of money laundering concern by the U.S. Department of State in its annual International Narcotics Control Strategy Report, available here. Other jurisdictions of concerns include Columbia, Brazil, Afghanistan, Venezuela, Mexico Russia and Somalia. The findings are similar to those reported by the U.S. Department of State in its 2011 report and include the following:

  • Money laundering in Canada derives primarily from the trade in illegal narcotics, chemical precursors and psychotropic substances;
  • Among the drug-related findings:
    • Canada is the leading supplier of ecstasy in North America and most of the supply is from British Columbia;
    • Canada is a major producer and shipper of methamphetamine for markets around the world, particularly to the U.S., Australia, Japan and New Zealand;
    • Marijuana is the most widely used drug in Canada and most of it is grown in British Columbia by Asian criminal gangs and associates of the Hells Angels;
    • Although heroin use is shrinking in Canada, Canadian are among the heaviest consumers of illegal pharmaceutical opiates such as Ativan (lorazepam), Valium (diazepam), Ritalin (methylphenidate), Oxycontin (oxycodone), Klonopin (clonazepam), and Talwin (pentazocine);
  • Canada has an unacceptable conviction rate for money laundering;
  • FINTRAC takes too long to deal with suspicious transaction reports;
  • The failure of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to apply to lawyers is an impediment to the effectiveness of the anti-money laundering regime;  and
  • Budgetary constraints reduce the effective of the anti-money laundering regime.

President Barack Obama noted in the Report that the stealth with which marijuana and synthetic drugs such as ecstasy and methamphetamine are produced in Canada an trafficked to the U.S. was of concern.

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