Canada once again a “Major Money Laundering” country
The 2018 “International Narcotics Control Strategy Report” (INCSR) published in March 2018 by the U.S. Department of State identifies Canada once again as a “major money laundering country” along with a host of risky countries for financial crime, and is generally doing a lot worse combatting money laundering and drug trafficking.
A “major money laundering country” is one whose banks and financial institutions allow financial transactions involving significant amounts of proceeds of crime. For several years in a row, Canada has been identified as such.
Canada has also been identified as a “major precursor country” which means it is a leading country that produces precursors or essential chemicals used in the production of illicit narcotics, such as fentanyl. Other countries include Columbia, Nigeria, China, Afghanistan and Mexico.
Volume 1 - The key findings of Volume 1 on drug trafficking vis a vis Canada are that:
- Canada is a primary source country of high-potency marijuana and MDMA to the United States.
- Canada exports illegally, synthetic opioids to the United States.
- Canada exports, illegally, synthetic drugs and amphetamine-type stimulants to Asia and Australia.
- Cannabis destined for the US is produced mostly in British Columbia.
- Methamphetamine continues to be produced in large quantities in Canada.
- Canada increasingly illegally imports fentanyl from China via mail courier.
- Recent seizures of multi-kilogram quantities of illegal fentanyl and carfentanil in powder form indicate these substances are increasingly manufactured illegally within Canada.
Volume 2 - The key findings in respect of money laundering in Volume 2 for Canada are different in 2018, compared to 2017, and indicate a much greater global concern for money laundering in Canada.
The Report says, for example:
- Foreign-generated proceeds of crime are laundered in Canada.
- Professional, third-party money laundering is a key concern – this often includes accountants and lawyers.
- Transnational organized crime groups and professional money launderers are key threat actors.
- Canada does not do enough on enforcement and prosecution.
- Laundering methods in Canada primarily involve cash smuggling, money services businesses, casinos, real estate, wire transfers, offshore companies, hawalas, credit cards and digital currencies, like Bitcoin.
- The illicit drug market is the largest criminal market in Canada.
- Transnational organized crime groups represent the most threatening and sophisticated actors.
- Experts have noted that when the magnitude of money laundering risks in Canada is taken into account, the prosecution rate is low.