Combatting money laundering in the fight against financial crime

As has been widely reported, Canada has become a haven for illicit funds entering the legitimate economy through money laundering. Because money laundering can’t occur in isolation, it can’t be combatted in isolation either. This paper explores how to more effectively promote public safety and quality of life of Canadian citizens through policy development, information sharing, and effective regulatory oversight and enforcement of laws.

Financial crime involves making money illegally from transnational organized crime, tax evasion, corruption, securities fraud, drug and human trafficking, and embezzlement, among others. Money laundering is the act, or attempted act, of making the proceeds of a crime appear legitimate, so money laundering itself cannot occur in a vacuum—it always involves the commission of a crime.

Efforts to combat money laundering may result in losing sight of both the intelligence gathered through the investigation of an offence and the risks associated with those offences. An entity that has traditionally tackled financial crime by setting up separate groups for different types of financial crime may inadvertently undermine its own risk-mitigation strategy.

As this paper explains, the increase in financial crime has serious implications for Canada’s reputation, for our economy, and for our society as a whole. Under increasing pressure to curb financial crime, both public and private-sector leaders are looking to innovate and take a more holistic approach to management of risks and enforcement of laws. Recognizing relevant trends, aligning priorities and activities, and integrating data more effectively across jurisdictions and organizations will go a long way to improving public policymaking and mitigating the impacts of financial crime in Canada.