During the study, witnesses spoke to the Committee about the low level of terrorist financing that has been detected in Canada. They also commented on the limited number of prosecutions under Canada’s anti–money laundering and anti–terrorist financing regime. However, witnesses suggested that this outcome was a result of many cases of money laundering and terrorist financing going undetected, so more could be done to detect terrorist financing and increase investigative capacity, which could lead to more prosecutions with these expanded capabilities. Some witnesses stated that the risk of terrorist financing in Canada is lower than in other countries, while others highlighted that limited detection and prosecution of terrorist financing in Canada do not mean that there is a low risk of terrorist financing in Canada or that Canadian entities are not being used to raise or transfer terrorism-related funds abroad. The majority of witnesses suggested that terrorist financing is an increasingly problematic issue globally, and that there must be united international efforts to stop the flow of funds to terrorists.

In this context, the Committee believes that implementation of the following recommendations would increase the effectiveness of Canada’s anti–money laundering and anti–terrorist financing regime, and would contribute to global efforts to combat terrorist financing. Consequently, the Committee recommends that:

1. The federal government continue to recognize the cost and prevalence of terrorist financing both globally and in Canada. Efforts should be directed to educating legislators, law enforcement agencies and the public about the connection between terrorist financing and terrorist activity. Moreover, any federal actions to fight terrorism should consider the financing angle.

2. The federal government, in its fight against the Islamic State of Iraq and the Levant (ISIL), explore new ways to disrupt ISIL’s financing sources. In particular, in addition to building and training local and regional security forces, the government should target ISIL’s administrators, financial collectors and distributors.

3. The federal government, in light of the numerous global cases of charities being used to raise and transfer funds for terrorist financing purposes, continue its efforts to bring increased transparency to the charitable sector in Canada. As part of these efforts, the Canada Revenue Agency should be encouraged to work more closely with charities to ensure their compliance with anti–terrorist financing laws. Increased transparency in the charities sector should not unnecessarily burden legitimate charities.

4. The federal government, with its international allies, track key facilitators of terrorist financing and work with social media networks to recognize, and take action, when their platforms are being used for illegal activities.

5. The federal government work with all relevant stakeholders to create the expertise and operational capabilities that would enable Canada to take a leadership role in counterterrorist financing. Actions in this regard could include supporting a private sector-led financial crime centre to act as a centre of excellence and to facilitate dialogue between the public and private sectors.

6. The federal government, recognizing increased instances of terrorist financing, develop a review mechanism for the Financial Transactions and Reports Analysis Centre of Canada that would enable an examination of its efficiency, objectives and capabilities.

7. That the federal government urge financial institutions in Canada to improve the training provided to their compliance officers, ensuring that they are able to properly identify suspicious transactions so that genuine suspicious transactions reports are sent to the Financial Transactions and Reports Analysis Centre of Canada.

8. The Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and entities required to report under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act work to improve communication between them. The federal government should ensure that FINTRAC is providing proper guidelines and guidance to reporting entities on how to identify suspicious transactions and submit reports that are useful. As well, FINTRAC should make greater efforts to provide Canada’s financial institutions with typologies of terrorist financing activities as a means of improving the information that is provided to it. Finally, FINTRAC and reporting entities should provide adequate feedback to each other in order to improve Canada’s counterterrorist financing regime.

9. The federal government, in recognizing that many transfers occur below the current $10,000 threshold, consider lowering the threshold for reporting international electronic funds transfers.

10. The federal government work with the appropriate stakeholders to develop a digital counterterrorism strategy with a view to keeping pace with illicit fundraising using digital technologies.

11. The federal government encourage the Royal Canadian Mounted Police (RCMP) to build and retain the prevention and investigative capacity that is needed to deal with complex financial investigations. As well, the RCMP should create a specialized and dedicated terrorist financing unit within its force.

12. The federal government initiate a study to clarify the role of charitable organizations in order to protect legitimate entities in Canada’s charitable sector and to prevent charities from being used as vehicles for terrorist financing.

13. The federal government consider expanding the investigative capacities of the Royal Canadian Mounted Police and other Canadian intelligence agencies in order to ensure that they can address terrorist financing.

14. The federal government encourage the Canada Revenue Agency to disclose information to the Financial Transactions and Reports Analysis Centre of Canada when that information is relevant to cases of terrorist financing.

15. The federal government, in seeking to ensure that all entities that are vulnerable to money laundering and terrorist financing are covered, consider expanding the list of entities that are required to report under Canada’s anti–money laundering and anti–terrorist financing regime.