Canada doing a lot worse combatting money laundering and drug trafficking according to 2018 US INCSR report

By Christine Duhaime | March 31st, 2018

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.

Key Findings

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.

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