I call this meeting to order.
Welcome to meeting number 22 of the House of Commons Standing Committee on Finance.
Pursuant to the motion adopted in committee on Thursday, February 17, the committee is meeting to study the invocation of the Emergencies Act and related measures.
Today's meeting is taking place in a hybrid format, pursuant to the House order of November 25, 2021. Members are attending in person in the room and remotely using the Zoom application. The proceedings will be made available via the House of Commons website. The webcast will always show the person speaking rather than the entirety of the committee.
Today's meeting is also taking place in a webinar format. Webinars are for public committee meetings and are available only to members, their staff and witnesses. Members enter immediately as active participants. All functionalities for active participants remain the same. Staff will be non-active participants, and can therefore view the meeting only in gallery view. I would like to take this opportunity to remind all participants at this meeting that screenshots and taking photos of your screen are not permitted.
Given the ongoing pandemic situation, and in light of the recommendations from the health authorities as well as the directive of the Board of Internal Economy on October 19, 2021, to remain healthy and safe, all those attending the meeting in person are to maintain two-metre physical distancing, must wear a non-medical mask when circulating in the room—it's highly recommended that the mask be worn at all times, including when seated—and must maintain proper hand hygiene by using the provided hand sanitizer at the room entrance.
As the chair, I will be enforcing these measures for the duration of the meeting. I thank members in advance for their co-operation.
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With regard to a speaking list, the committee clerk and I will do the very best we can to maintain a consolidated order of speaking for all members, whether they are participating virtually or in person.
This meeting is scheduled for a longer duration today. In consideration of the fact that our witnesses may not get an opportunity to leave their virtual set-up, at around the halfway mark of the meeting I'll suspend the meeting for a five-minute health break.
Members, before I introduce the witnesses, I understand that we have an agreement among our committee to speak about the situation in Ukraine.
Parliamentary Secretary Beech, I see your hand up. Please go ahead.
Mr. Chair, thank you for giving me an opportunity to speak and to address the news of Russia's unprovoked attack on Ukraine.
Our government, the and the condemn, in the strongest possible terms, Russia's egregious attack on Ukraine. These unprovoked actions are a clear further violation of Ukraine's sovereignty and territorial integrity. They are also in violation of Russia's obligations under international law and the charter of the United Nations.
Canada calls on Russia to immediately cease all hostile actions against Ukraine and withdraw all military and proxy forces from the country. Ukraine's sovereignty and territorial integrity must be respected. The Ukrainian people must be free to determine their own future.
Earlier this morning the met with G7 partners. Our government will continue working closely and quickly with NATO and our allies to collectively respond to these reckless and dangerous acts, including by imposing significant sanctions in addition to those already announced. In the face of these attacks on Ukraine, Canada will take additional action to stop Russia's unwarranted aggression.
We continue to stand with Ukraine, its people and the Ukrainian Canadian community here in Canada. Russia's brazen acts have profound human consequences and will not go unpunished.
With your permission, Mr. Chair, I'd invite my other honourable colleagues to speak, if they would care to do so.
Thank you very much, Mr. Chair.
We share in the government's condemnation of this unprovoked attack on the people and the country of Ukraine. The attack is a violation, of course, of Ukraine's sovereignty. It's also a violation of international norms and of the system on which Canada and the western world's prosperity has been built—the most prosperous time in recent history.
Putin must immediately cease his attack and withdraw all military forces. Failing to do that would undermine the international system, which Canada played a key part in establishing after World War II, that has been, as I said, the foundation of our peace and prosperity.
As Canadians, we need to commit ourselves to the strengthening of our own security, including the Arctic, and to the renewal of commitments to NATO.
Conservatives, parliamentarians and Canadians all stand with the Ukrainian people in this, one of their darkest hours. Our thoughts and prayers are with the people of Ukraine.
Fellow members, it's now my turn to take the floor to strongly condemn Russia's attack against Ukraine. What is happening is terrible. Soldiers will die. Civilians will die. In fact, at this very moment, the people of Ukraine are being attacked, invaded and bombed. We haven't even turned the corner on the pandemic yet, and we have been plunged into a world at war. Well, war has broken out in Europe, that's a fact—a terrible one, but a fact nevertheless.
We stand united with the Ukrainians, and we support them fully. It is a sad day for humanity, and dark days are on the horizon. I would like to tell the Russian president that it's not too late to put an end to this madness. Sadly, I don't believe that's true.
Therefore, with a broken heart, I will instead address the people of Ukraine: our hearts go out to you, and we will do whatever we can to come to your assistance. It's our responsibility as human beings. In these hard times, know that you are not alone.
Thank you very much, Mr. Chair.
I want to take this opportunity to condemn in the strongest possible terms the actions of Russia in violating the sovereignty and the territorial integrity of Ukraine, and call on Russia to cease all aggression against Ukraine and withdraw all of its troops.
Our thoughts right now, as New Democrats and members of the House of Commons and Canadians, are with the Ukrainian people, who are suffering this invasion of their country, and with all of the people here in Canada and across the world who have friends and loved ones in Ukraine who are worried about their well-being.
I think this also tells us something important about Russia under the leadership of Vladimir Putin. We have to recognize that the war isn't happening just physically. We know that Russia has also been very active in the digital space, in Ukraine and indeed here in Canada, spreading disinformation. Russia's actions in Ukraine are also related to a larger campaign to sow discord in the west. I think that's something we need to bear in mind. We need to be cautious of the influence Russia is having here at home through social media and other avenues where it can spread disinformation to try to keep people distracted while it pursues the very real agenda of territorial expansion in Ukraine.
Thank you for the opportunity to put these thoughts on the record at a very bleak time in the world's history, Mr. Chair.
I'm seeing a lot of hand clapping and thumbs up from everybody. We love you, FINTRAC, but yes, two hours is the time we will have with FINTRAC today.
Thank you, MP Lawrence, and members for those bold, strong statements showing Canada's support for Ukraine. I can tell you that, here at home, my wife is of Ukrainian descent. In my riding of , we have a large Ukrainian diaspora community. “Slava Ukraini, Slava Canada” I hope I said that right. I'll hear from MP Baker on that, I am sure.
At this time, I would like to introduce our witnesses for today. We have FINTRAC with us, the Financial Transactions and Reports Analysis Centre of Canada. We have Donna Achimov, the deputy director and chief compliance officer of the compliance sector, and Barry MacKillop, the deputy director of intelligence.
You now have an opportunity to make an opening statement for members and then we will go to questions. Thank you.
I'd like to start by acknowledging the statements of the members on the situation in Ukraine.
I want to thank you, Mr. Chair, for inviting FINTRAC to participate in your review of the Emergencies Act, which was revoked by the federal government yesterday afternoon. As you mentioned, I am joined today by Donna Achimov, who is our chief compliance officer, as well as the deputy director responsible for compliance.
As committee members know, FINTRAC is Canada's financial intelligence unit, and anti‑money laundering and anti‑terrorist financing regulator.
We are responsible for ensuring the compliance of more than 24,000 businesses that have requirements under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, including financial institutions, casinos and money services businesses.
FINTRAC has a robust, risk‑based approach in place to ensure that businesses fulfill their requirements, such as identifying clients, keeping records and reporting certain types of financial transactions, including international electronic funds transfers, large cash transactions, large virtual currency transactions and suspicious transactions.
With the reporting that we receive from businesses subject to the act, and when appropriate thresholds are met, FINTRAC provides actionable financial intelligence to Canada's police, law enforcement and national security agencies in support of their money laundering and terrorist financing investigations. Our financial intelligence disclosures are often based on hundreds, or even thousands, of financial transactions. These disclosures may show links between individuals and businesses that have not been identified in an investigation and may help investigators refine the scope of their cases or shift their sights to different targets.
A disclosure can pertain to an individual or a wider criminal network, and can also be used by police and law enforcement to put together affidavits to obtain search warrants and production orders. In total, last year, FINTRAC provided more than 2,000 disclosures of actionable financial intelligence in support of investigations related to money laundering, terrorist activity financing, and threats to the security of Canada. Since becoming operational in 2001, the centre has provided more than 22,000 financial intelligence disclosures to Canada's police, law enforcement and national security agencies.
In 2020-21, our financial intelligence contributed to 376 major resource-intensive investigations and many hundreds of other individual investigations at the municipal, provincial, federal and international levels. These agencies continue to seek our financial intelligence in record numbers. FINTRAC received 2,109 voluntary information records from Canada's police, law enforcement and national security agencies last year. These records contain information on alleged criminals and terrorist financiers, and are often the starting point for our analysis and the financial intelligence that we are able to generate and disclose.
Many of the recipients of our disclosures have told us that they would not start a major project-level investigation without seeking out our financial intelligence.
Mr. Chair, under the emergency economic measures order, certain businesses, including financial entities, money services businesses, crowdfunding platforms and payment service providers, were required to take specific actions in relation to the financial activity of individuals who were engaged in the blockades, as laid out in the emergency measures regulations. For example, crowdfunding platforms and payment service providers were required to register with FINTRAC when they were in possession or in control of property that was owned, held or controlled by an individual or entity who was engaged in an activity that was prohibited in the emergency measures regulations.
Following the invocation of the Emergencies Act, a number of crowdfunding platforms and/or payment service providers began the registration process with FINTRAC. This has, however, now been halted with the revocation of the Emergencies Act. Crowdfunding platforms and payment service providers that were required to register with FINTRAC were also required to report suspicious transaction reports, large cash transaction reports, international electronic funds transfer reports and large virtual currency reports when thresholds set out in the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and its regulations were met. This, too, has been halted with the revocation of the Emergencies Act.
As a financial intelligence unit, and under our legislation, we cannot speak to the reporting that we receive from businesses or the financial intelligence specifically that we provide to Canada's police, law enforcement and national security agencies.
Mr. Chair, I want to be very clear about FINTRAC's mandate. As one of 13 federal departments and agencies that play a key role in Canada's anti-money laundering and anti-terrorist financing regime, FINTRAC was established as an administrative financial intelligence unit, not a law enforcement or investigative agency. We do not have the authority to monitor or track financial transactions in real time, freeze or seize funds, ask any entity to freeze or seize funds, or cancel or delay financial transactions. This was done very deliberately by the Parliament of Canada to ensure that we would have access to the information needed to support the money laundering and terrorist financing investigations of Canada's police, law enforcement and national security agencies, while protecting the privacy of Canadians. This did not change under the Emergencies Act or the emergency economic measures order.
We are committed to working with Canadian businesses and our domestic and international partners to protect the safety of Canadians and the integrity of Canada's financial system.
Thank you. We are now ready to take your questions.
I'd like to thank Mr. MacKillop for his excellent opening statement and, I might say, his strong testimony at the public safety committee, which I've had the opportunity to review.
I want to summarize some of the testimony you've already given so that it's clear to Canadians. Now, in the emergencies measures act, they sought to give you...I don't want to say “authority”, because it's probably the incorrect word. They sought to give you the additional ability, as registrars, to get information from cryptocurrency and from crowdsourcing platforms.
Prior to the act—and the way it stands now, because it's been revoked—they weren't required to be registrants, and therefore you weren't getting information from them directly. Is that correct?
: Duzhe dyakuyu
. Thank you very much, Mr. Chair.
I want to start off with my own very short statement. As a Ukrainian Canadian as well as the vice-chair of the Canadian NATO Parliamentary Association, I also strongly condemn Russia's unprovoked attack on Ukraine, which has already claimed too many lives and continues to put countless civilian lives at risk.
I stand in complete and absolute solidarity with the people of Ukraine and its legitimate, democratically elected government and parliament. I'm glad...and unequivocally support our , our and in fact all leaders of our federal government who are condemning Russia's actions today. As well, I fully support our commitment to apply the strongest sanctions possible and to do all we can to continue to support Ukraine moving forward.
With that, Mr. Chair, I want to say a huge thanks to our two guests today.
Thank you so much for your work. Thank you for coming before us today.
The has announced that she intends to put forward legislation that will empower FINTRAC to have oversight over crowdfunding and cryptocurrency platforms without the need for the Emergencies Act. Would you support such a change?
Good afternoon, Ms. Achimov and Mr. MacKillop.
I would like to commend my fellow members on their statements. The one made by Ms. Dzerowicz was particularly touching and heartfelt.
Before discussing the Emergencies Act itself, I would like to properly understand what FINTRAC does when accounts are frozen.
I'm going to give you a hypothetical situation to make sure that I have understood correctly. Let's say that a financial institution observes a suspicious money transfer or suspicious activity in an account. Under the ordinary legislation, the institution can freeze the account and then report it to you. On your end, after analyzing the situation, you conduct a follow‑up. Is that correct?
Thank you for the question.
That's not quite correct. We do not give any instructions to the financial institutions. We are not at all involved in the freezing of accounts or anything of that nature.
In a case like the one you are describing, normally, under the law, financial institutions can submit suspicious transaction reports to us if they suspect that the transactions in question are tied to money laundering or the financing of terrorist activities. Otherwise, we do not receive reports.
In this case, under the Emergencies Act, financial institutions were able to freeze accounts after receiving information from the RCMP to that effect. This was done without us having been made aware of the freezing of the accounts or informed of the accounts involved. We are not at all involved in this aspect of the emergency economic measures.
Thank you for the question.
I'm not an expert in the legislation governing banks, but I believe that financial institutions have the power to decide on the risk level they are willing to expose themselves to when working with their clients. Therefore, if a client exceeds that risk level, it's up to the financial institution to decide whether or not to freeze the account or no longer do business with the client.
Can that be noted in a suspicious transaction report that would be sent to us? Yes, it's possible, because there is a section in the report that notes the actions undertaken by the financial institution or any other reporting entity. Therefore, a note could indicate that the account was frozen, or even that the institution disengaged owing to the financial risks the individual represents, which means that the institution decided to no longer do business with them.
That's information that becomes relevant for police because, if they wish to obtain an order for production, it's important to know whether the account still exists and is still active. That is part of the information that we provide to law enforcement agencies, if we have it.
I'll start, but I'll defer to Donna if she wants to jump in with additional information.
Had it continued, the crowdfunding and payment service providers would have registered as reporting entities to FINTRAC. They therefore would have been subject to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act. They would have submitted reports as per that act.
That would have included threshold reports, as I went through earlier—into or out of Canada over $10,000, for example—and large cash transactions of $10,000 or more within 24 hours. They would have been able to submit suspicious transactions to us in the event they had reasonable grounds to suspect that the transactions they were looking at would be relevant to money laundering or terrorist activity financing.
That is still the limitation. The mandate was not broadened to receive reports on anything. It was broadened to allow additional entities to report transactions related to money laundering or terrorist activity financing.
Before I start my questions, let me echo my colleagues around the committee here in condemning what's happening in Ukraine today by the Russian aggressors. This is a time when democracies around the world are sliding, and we need to make sure that we stand fast with our democratic friends in the Ukraine and ensure we stop this as much as we can.
Moving to questions now, Mr. MacKillop and Ms. Achimov, thank you very much for the work you do and for being here at our committee today to give us more information.
I am going to get a little granular here with you, because you did speak, Mr. MacKillop, about how, in the week that the Emergencies Act was in force, a number of crowdsourcing organizations reached out to register with FINTRAC. My understanding of all crowdsourcing sites is that they are regulated at the provincial securities level. The decision was made not to have them report to FINTRAC because it really was a duplication of the reports that go to FINTRAC: because the money flowing into them is already regulated by at least one financial provider on the in and the out. Is that correct?
Thank you to our witnesses.
First, I'd also like to mention that we often make headlines in this place for disagreeing with each other, but I think you've seen a multipartisan, unanimous condemnation of what is happening in Ukraine. Like my colleagues, I stand with the government and with the in any response that is necessary to push back on this Russian aggression, which is unparalleled and unprecedented and needs to be met with serious consequences.
Thank you to our witnesses for appearing again. It's nice to see you back at this committee. Thank you for your testimony thus far.
My questions will be backward-looking a bit, but also forward-looking, as I just want to confirm that I understand some of the gaps we've identified or that have been discussed.
Setting aside the emergency order, if a transaction had met the threshold for reporting in the general sense, even if it came from a crowdfunding platform but ended up in a Canadian bank account, that would have been reported through the regular regime. Is that correct?
It's hard to say right now, not knowing what transaction crowdsourcing or a PSP—payment service provider—would in fact see that is not currently seen. I think time will tell, and there is some additional work we have to do in looking at and working with them with regard to the transactions they do see and whether those transactions would allow them to meet their grounds for suspicion.
I would assume—and I'm guessing here—that on a normal crowdfunding page we would not likely see transactions of $10,000 or more being donated to a particular cause—
Mr. Adam Chambers: Right.
Mr. Barry MacKillop —so we may not see significant numbers of threshold reports, but it is possible, and again, time will tell what types of transactions they see as to whether or not a pattern of transactions would lead to grounds for suspecting money laundering or terrorist financing.
Thanks very much, Mr. Chair.
I too would like to make a brief statement, if I could.
I want to first thank my colleagues for their thoughtful and strong and supportive statements. MP Chambers took the words out of my mouth. I was going to say that we disagree on so much here at this committee and in the House and in public discourse, but this is something that we're all united on. It is so important. I think it means a lot to Canadians. They want to see us united on this issue.
I'm of Ukrainian descent. My grandparents, like so many people of Ukrainian descent, risked their lives and lost loved ones to that desire for freedom and independence. Of course, those with Ukrainian ancestry are touched by this very personally today, but I think this is something that concerns all of us and touches all of us. That's what we've heard from the comments here today from all members.
It touches us because we see a free and independent country being invaded unjustly and because of the humanitarian crisis. I think this is a threat to the international rules-based order that protects all of us. What we're seeing today is a threat to not only Ukraine but also to the rest of Europe and our allies and Canada. That's why I think it's so important that we take the steps necessary to make sure that Vladimir Putin doesn't win and that Ukraine is free and democratic and independent. I thank all members for their thoughtful statements.
With that, Chair, I'd like to move to my questions, if I may.
There has been quite a bit said and reported on with regard to the funding of the blockades coming from outside of Canada. Can you talk about FINTRAC's ability to examine or track suspicious transactions originating outside of the country?
Mr. Chair, FINTRAC does not monitor transactions, nor do we have any ability to see transactions, going to any institution or any type of GoFundMe page or GiveSendGo page or any other crowdfunding platform. That is not within our mandate.
We do have very good partnerships with not only our Five Eyes but also a number of international financial intelligence units. FinCEN is one of our biggest partners in the U.S. Certainly, they were alive to this issue that was going on with regard to the blockades. We had discussions with them. They were certainly knowledgeable and alive to the fact that any suspicious activity reports they might receive, they would forward to us if these were applicable and would assist us in our intelligence job.
With regard to any activity coming from foreign donors or people living outside of Canada, these crowdfunding platforms are in fact available internationally. They are on the Internet. Anyone from around the world could have donated to what was initially a cause they felt they wanted to support. We would not see those donations, unless, of course, they were $10,000 or more and coming from outside Canada. For smaller donations made by individuals to support a cause they believe in, we would not see that unless it came into that particular cause and were deemed suspicious by the bank that was holding the bank account for that particular cause.
Thank you very much, Mr. Chair.
Thank you, colleagues.
I'm going to echo that too, because if I didn't it would be wrong. I've been watching very closely this morning, unfortunately CNN, but you have to get your news somewhere. My heart is with all of the folks of Ukraine. Honestly, although we have work to do here, I would like to just be quiet for five minutes and just close my eyes in solidarity with each and every one of you to really think about the families being affected in Ukraine. I won't, but that's where my heart's at today, and I thank all my colleagues, especially Mr. Baker.
I can see the pain in your face, sir, so thanks for being open and honest and humble enough to really recognize where we're at.
First and foremost, I want to say thank you, friends. I've never been part of finance before, so perhaps I'm a little bit in left field. I do sit on the international trade committee, so if my questions are perhaps a little bit sideways, please forgive me on that front.
I want to tie in the international trade side of things. My riding of Essex is right beside the Ambassador Bridge, so you can appreciate where I'm coming from with this.
The first question I would ask is, if we highly regulate crowdfunding platforms in Canada, won't Canadians just switch to crowdsourcing platforms abroad? I don't know, Mr. Chair, who to address this to specifically, but whoever would like to take this first question, please do.
Yes. Just about every country that's part of the Financial Action Task Force has a financial intelligence unit.
With respect to your question on whether or not they do what FINTRAC does, I would unabashedly say that FINTRAC is the best in the world in providing intelligence. We have international surveys indicating that.
We are one of the few that actually do financial intelligence to support our domestic law enforcement. Many of the financial intelligence units around the world specialize in supporting the international component and sharing internationally. We do that as well, but we do tactical financial intelligence support to law enforcement and national security agencies in Canada. We are relatively unique in doing that, certainly in terms of the number of disclosures we do a year and the number of investigations we're involved in with law enforcement. Also, we are unique internationally in the number of times we are recognized as a partner in successful investigations.
Yes, financial intelligence units do exist around the world, but I would say FINTRAC would be at the top in what we do and how we do it.
No, we actually talk quite a bit with them. We certainly have our Five Eyes partners, of course, with whom we have a significant number of projects that are ongoing, whether they're on, for example, the tax-evasion side or the terrorist-financing side or even on trade-based money laundering, for example. There are sometimes connections all around the world in these cases, and we have worked and are working on cases that do touch a number of different countries. We work together and share that information.
We can query other countries, for example, if we have Canadians who are involved in using another country's banking system in order to hide their proceeds of crime. We can contact another country through the FIU. We get reports that we can then forward on to our own law enforcement in Canada, and they do the same. They do call us. We have constant contact, more so with our Five Eyes partners, of course. However, we deal with just about any country with which we have an MOU and with which we can share information and intelligence. They will do that. That's on the intelligence side.
We also have supervisory MOUs with our Five Eyes, whereby we can share supervision information as well as best practices, training and learning. We also work through the Egmont Group, which is a group of financial intelligence units around the world, to support them in their ongoing training as well as in terms of some of the standards and some of the work we do as international financial intelligence units.
First, I want to join all my colleagues in expressing my full solidarity with the Ukrainian people. Today, Ukraine is plunged into darkness and terror as a result of Russia's completely unjustified attack. President Putin's brazen disregard for international law, democracy and human life is inexcusable. Canada stands united behind the Ukrainian people. The entire international community must also join together to put an end to this terrible situation.
I want to thank the FINTRAC officials for being here today. I appreciate their experience and their essential work. I have some questions for them.
I was personally very concerned about foreigners and even far‑right groups funding illegal activities in Canada. Some of these activities, such as the blockades in Windsor, led to over $1 billion in economic damage. These aren't strictly terrorist activities or terrorist groups. They're people from foreign countries who fund activities that cause significant damage to our economy and put our institutions at risk.
If the GiveSendGo data leak and the Emergencies Act hadn't come into play, would the current tools have helped us identify the donors behind the platform?
Thank you for the question.
You referred to the data leaks. However, we certainly don't use that data. We haven't received a list of people who donated to the cause. Unfortunately, crowdfunding platforms are available to everyone, so anyone in the world can access them.
We've had discussions with Stripe. Certainly individuals from around the world donated money to support the cause before it was declared illegal. People all over the world are unhappy and fed up with COVID‑19. I think that some people thought at first that this was a protest against COVID‑19 and just wanted to support the cause by giving small amounts of money. It was their own money. This wasn't money laundering. I don't believe that they thought that they were funding terrorist activity.
Normally, we wouldn't have seen any of this. Crowdfunding platforms won't release the names of all donors to us. This falls outside the scope of the legislation governing us, unless it relates to money laundering or terrorist financing.
Thank you for the question.
No, I haven't seen Mr. Manchester's comments. However, with all due respect, he doesn't work within the system. That's his point of view.
As far as I know, the emergency measures were implemented for a limited amount of time, not for an indefinite period. The banks received information pursuant to the established process, meaning the use of the Emergencies Act in a very limited way and for a very specific reason. I'm sure that the banks won't store those names and send us reports later.
In any event, if a bank said that it was sending us a suspicious transaction report because it received a name from the RCMP, I wouldn't accept that information and I wouldn't give it to the RCMP. The police aren't allowed to direct a bank to provide information to FINTRAC. We also aren't allowed to ask the bank to give us a suspicious transaction report on someone. This information would be thrown out in court as inadmissible evidence. We can't ask a bank to do something that we can't legally do. Neither the RCMP nor any other police force is allowed to direct a bank to send suspicious transaction reports to FINTRAC for intelligence purposes, in order to gather evidence and lay charges.
The banks have no reason to keep either the information or the names. If there were suspicious people or people with a history that suggested involvement in terrorist financing or money laundering, they would already be identified by the financial institutions.
I want to follow up on that.
I was listening without translation, as I normally do. I'm usually pretty confident in my French, but what I took from your testimony was that it was just an explanation of some of the reasons Canadians should feel reassured that whatever information was transmitted in this process wouldn't leave a lasting impression on their record in the private sector.
I'm wondering if you could take a little bit more time to explain that, so members of the committee, including, or perhaps especially, me, feel they have a strong command of your comments in response to Monsieur Ste-Marie.
Really, the Emergencies Act was time limited, and it was for a specific event.
For example, the information on the designated people that was given to the banks, the financial institutions and others, had to do with the funding related to the illegal blockades, to ensure that the funding that was received or disbursed was stopped.
Once this emergency measure is revoked, as it has been, the banks cannot use that information, for example, to submit an STR to me, to say, “Hey, we got this name from the RCMP. Looking backwards, yes, the person is a criminal, so we're going to give you this.” If they gave that to me and said, “The RCMP gave me this name, so this is my threshold for reporting to you”, that would not be something that I would be comfortable disclosing back to the RCMP, because it's not something that the RCMP—and I use “RCMP” as a generic term for law enforcement here—or law enforcement can go to a bank about and direct it to send an STR to FINTRAC on any particular individual. There are legal requirements. If the RCMP or any law enforcement wants that information, they need production orders. They need warrants from the court. They cannot simply walk in and say, “Please submit an STR on Barry MacKillop to FINTRAC” so that they can then give that to me as intelligence and I can get a production order and charge someone.
I'm not a constitutional expert or a lawyer, but that is contrary to how our court system works. There is an independence. The threshold is met. The banking system or the financial institutions would submit reports to us on people whose transactions they believe or they suspect would be relevant to money-laundering or terrorist-financing activities.
The fact that they were either supporting or disbursing the funds related to an illegal blockade has nothing to do with money laundering or terrorist financing. We would not get a suspicious transaction report, and I do not believe that the intent or the reality would be that the banks would keep the list of these names once the process had been undertaken to unfreeze the accounts, as Madame Jacques was mentioning the other day. These accounts will be unfrozen. There's no lasting black mark on these individuals. They simply could not use that money, or whatever it was that they had, to support the illegal blockade, as per the Emergencies Act when it was in place.
The audio was cutting out, sir, and I didn't hear everything, but I'll do my best to answer the parts that I did hear.
If there were monies coming in from an international organization or an individual internationally, and they were in sums of $10,000 or more, we would see that, because it would use the international transfer system. Those transactions are threshold transactions that would be reported to FINTRAC. If the transactions were coming into a crowdfunding platform, the crowdfunding platforms that I have researched so far all have fairly strong anti-money laundering, anti-terrorist financing compliance programs in place. They don't want to be misused. They have terms of reference, and as we saw with GoFundMe, if you're not managing your terms of reference, they will cut that page off. They will certainly be keeping an eye on that.
Any organization or individual who is setting up a GoFundMe page or any other type of crowdfunding page for nefarious purposes would nevertheless have a bank account if they're in Canada, so we would not only see the international transfer of threshold funds coming in; we would also have the bank keeping an eye on whether or not the bank account that was set up for this particular social cause, or whatever cause it was, was actually disbursing the money for the purposes for which it was set up. Otherwise, we would see suspicious transaction reports.
My next question is in the spirit of moving forward and assuming that the is going to continue to move forward and try to introduce legislation to make this something permanent for FINTRAC.
One of the things that has been said about FINTRAC investigations is that they very rarely lead to charges connected to money laundering or extremist financing, and the reason that's given, such as by Transparency International Canada, is that it's largely because law enforcement agencies are hesitant to take on labour-intensive, time-consuming cases.
Is that true? If it is true, is there something that we need to be thinking about in terms of capacity and resources and how we're actually framing any type of legislation or including it in any type of legislation moving forward?
Mr. Chair, I think the member is correct that if we measure success based on the number of successful money-laundering or terrorist-activity financing prosecutions we have in Canada, we may not come out with significantly high numbers. However, if we look at the disruption of criminal organizations or the disruption of potential terrorist events, where our financial intelligence may or may not be recognized—because it's not recognized in every successful investigation or prosecution—I think the disruption is significant, and I think the financial intelligence is critical to assisting our law enforcement partners in their investigations.
Certainly, money-laundering charges are difficult. They're difficult to prove and difficult to get prosecutions on, but in terms of my own level of satisfaction with my work, while getting a money-laundering prosecution is great, if I can assist law enforcement in identifying 12 victims of human trafficking and getting them out of a human-trafficking ring so they can become 12 survivors in Canadian society, I see that as success. Perhaps a human trafficker will not be charged with money laundering, but they will be charged with human trafficking, and we will save the victims.
I think it's the measure of success where, yes, Transparency International may have looked at the FATF measure, which is money-laundering and terrorist-financing prosecutions, but for us, we believe that while that's important, saving victims, getting victims out, avoiding terrorist incidents and disrupting organized criminals are as successful as a money-laundering or terrorist-financing prosecution.
I'm going to go back to where I left off with my last round of questioning.
All these Canadian crowdfunding platforms are regulated through provincial securities regulators. They are covered under FINTRAC when the transactions go there. The crowdfunding platforms in Canada, specifically GoFundMe, are regulated. When activities were deemed to be illegal, they ceased to provide funds to the organization. The one gap we have is GiveSendGo—an offshore non-Canadian entity, to which some Canadian funds and some other funds were going—which we are not sure where it fits in the regulations. That's where we are at.
This is the part that I think concerns many of the members of this committee, namely the implications of foreign funds and foreign organizations that are not regulated by Canadian institutions such as FINTRAC being able to destabilize operations or governments in Canada.
I'm not sure how FINTRAC is going to be able to regulate these foreign platforms. Can you comment on that?
I do want to say that with the last time FINTRAC was here, and this time too, of course, I learn more all the time. It's certainly reassuring that there are organizations like FINTRAC. It's appreciated. Even mentioning the human trafficking relevant to what you do is most beneficial.
I certainly don't know how you deal with the flood of misinformation and disinformation that we've seen over the past few weeks, but I'm going to go back to what may be more of a local issue when you're dealing with financial institutions such as a credit union or something like that.
What are the weaknesses of those institutions, I guess, that could have consequences for you as you're trying to do your job? What changes would you like to see in those institutions for betterment in your doing your job?
I think it might help to just step back at the end of our meeting today and take a little bit of a bird's-eye view. I think part of our role here on the committee is to address concerns that Canadians may have that some of the extraordinary powers granted under the emergency orders were improperly used or abused.
I'm wondering if you have any advice for the committee on who else we should be talking to, or what questions we should be asking, to discover, to the best of our abilities, if that's the case; and if that's not the case, to be able to reassure Canadians that things unfolded as they should have under the orders, and how to follow up if they're concerned about lasting consequences with, say, their financial institution or anything else; or, if there are to be no lasting consequences for them, how they might be able to feel reassured that this is the case, who to pursue those questions with, and what would count as kind of getting to a point where they should feel satisfied that those questions have been answered.
I'm wondering if you have any recommendations for the committee on how we can undertake those two tasks—satisfy ourselves that there haven't been abuses, or to find them if they're there; and then, in the event that there haven't been, how to provide reassuring advice to Canadians to that effect and some advice on how they can pursue those questions further in their individual cases to satisfy themselves.
Far be it from me to suggest whom you should invite to your committees. If there are people I know, and they don't want to come, I may make enemies, so.... Certainly, there were a number of agencies involved.
For individuals who are constituents, who are Canadian citizens, I think they can follow up with their financial institutions. If they were caught up in this, I think immediate and direct follow-up with their financial institutions will allow them to achieve a measure of comfort with regard to their bank accounts, as Ms. Jacques said the other day, being unfrozen now that the act has been revoked. I think they can follow up with their institutions and have a discussion about what impact, if any, they would see. If their banks or financial institutions have questions for them, I'm sure they can answer those questions and get that level of comfort.
As for the bird's-eye view, I understand that an inquiry will take place. I think many, many parties will be invited to that inquiry, which I'm sure will provide a very nice overview of everything that was done, how it was done and why it was done. From my perspective, I'm satisfied that it came to a peaceful end. Being in Ottawa every day and living through that, I was quite happy and proud of my law enforcement partners in the way they resolved this.
I think I would leave it at that rather than suggest specific names of people you should invite.
Thank you so much, MP Blaikie.
Members, I think I speak for all of us when I say that Barry MacKillop and Donna Achimov have been excellent witnesses. We want to thank FINTRAC for being with us and for the many answers they gave to our many questions. They provided great insight into what FINTRAC does and how it does it.
On behalf of the committee, the clerk, the analysts, the interpreters and everybody who makes this operation work, the staff and members, I want to say to all of you that I've never been prouder just to listen to you. You spoke, as I said, from the heart. You spoke strongly. We spoke united on Ukraine. I'm sure all of our colleagues, parties, party leaders, the and the would be very proud. I thank you all for what you have done.
I believe this is the first committee since the conflict began where members have been able to make these types of comments for the public, for them to hear what we have to say.
With that, we'll—
MP McLean has his hand up.