Money Laundering In Canada, Devastating Effects (Essay Sample)

MONEY LAUNDERING IN CANADA
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Money Laundering in Canada
Introduction
Money-related crimes leave devastating effects in a country including inflation, loss of government’s revenue through tax evasion, and the influx of criminal activities. As such, the Canadian government has embraced proactive efforts to fight financial crimes, which is a global phenomenon affecting many economies. Researchers attribute the escalation of financial crimes to the growing wave of globalization (Peltier-Rivest & Lanoue 2015). The Anti-Money Laundering (AML) regime in Canada rests on numerous initiatives including legislative, regulatory, and policy framework that determines the AML mandates of the government. The Canadian government is implementing the Financial Task Force (FATF) recommendations to deter money laundering. The present study explores the various methods through which the Canadian fights financial fraud.
In Canada, the Proceeds of Crime Act treated the act as a crime in the year 1989 (Gottschalk 2015). The products of enterprise criminal and drug offense became illegal. The Act guaranteed immunity to those who volunteered information of suspicious transactions to the police. In 1991, the Act to Facilitate Combating the Laundering of Proceeds of Crime directed the private sector to keep records of their customers (Boulez 2015). Those records facilitated the process of criminal investigations. Financial institutions, banks, credit unions, trust companies, and insurance providers would then provide the information to the Bankers’ Association. Voluntary reporting of suspicious transactions assists Anti-Money Laundering (AML) enforcement efforts (Gottschalk 2015).
The Canadian government intensified its anti-money laundering campaign in 2004 when it established the Financial Transactions and Task Force Analysis Centre (FINTRAC) in 2004 (Peltier-Rivest & Lanoue 2015). This agency emerged as an independent body with no political influence at all. The formation of FINTRAC ensured that Canada incorporates the recommendations of FATF in its efforts to combat the financial crime (Gottschalk 2015). FINTRAC aims at meeting several key objectives including crime detection, prevention, and deterrence of money laundering. It also detects terrorism financing. FINTRAC, which is the Canada’s Financial Intelligence Unit (FIU), analyzes financial transactions and provides information to law implementation agencies for analysis and prosecution of money laundering criminals 1989. Its financial intelligence relies on the business reports of the private sector including financial institutions, real estate brokers, and accountants among other money handlers.
The goal of the Canadian legislation was to institute a reporting regime. It would police the Canadian financial system and create a repository of financial information. Government agencies use the pool to uncover money laundering activities. The Proceeds of Crime (Money Laundering) and Terrorist Financing Act (PCMLTFA) followed the 9/111 terrorist attacks. This Act was in compliance with the definite recommendation of the FATF against the funding of terrorism. The PCMLTFA in conjunction with Criminal Code of Canada, Customs Act, Charities Registration (Security Information) Act, and the Income Tax Act, among others, guide the Canadian AML regime.
FINTRAC receives financial transaction reports and produces financial intelligence on suspected money laundering and terrorism funding cases (Arnulf & Gottschalk 2013). Financial institutions must monitor their customers closely to be in a position to detect any activities linked to money laundering. The Canadian government has integrated the private sector in the ant-money laundering efforts. In fact, whether willingly or not, financial institutions, real estate brokers, and other money-handling professionals are members of the Anti-Money Laundering (AML) regime (Kempa 2015). This legislation succeeded in involving members of the private sector in the implementation of public sector goals. It is the role of financial institutions to report suspicious transactions in compliance with the AML regulation.
The FATF recommends that financial institutions should undertake customer due diligence measures (Kempa 2015). This body suggests a diligent identification and verification of customer information when establishing business relationships. Financial institutions are required to designate a threshold to limit account holders. Also, when there is a suspicion of money laundering or terrorist activities, the financial institutions should utilize due diligence to identify the correct names of those customers for investigation (Gottschalk 2015).
Anti-money laundering efforts have made the Canadian financial system transparent. Banks and financial institutions have the legal responsibility to know customers’ source of money, the beneficiary, and the target of the funds. As such, customer identification protects the soundness of the banking system. The Basel Committee proposed Customer Due-Diligence procedures that can help improve customer identification standards. The committee suggested robust monitoring by banks to detect suspicious customers, especially those using anonymous and fictitious names.
The implementation of the Vienna Convention, the Palermo Convention, and the 1999 United Nations International Convention for combating terrorism Financing are some of the international money laundering efforts that countries should join (Arnulf & Gottschalk 2013). The FATF provides that countries should offer the widest range of mutual legal assistance regarding ML and TF investigations, prosecutions, and related proceedings 1989. The Canadian government provides transparent and efficient procedures for agencies investigating money laundering. There are no restrictive conditions on the provision of mutual legal assistance. In Canada, the authorities charged with the AML enforcement have autonomous powers to carry out their mandate. Foreign countries pursuing money laundering in Canada are allowed to do so with no restrictive conditions whatsoever.
There are numerous assertions, claims, and statements regarding the study of white-collar crime. The question emerges on which characterizations and assertions can we best use to understand white-collar crimes and its various dimensions. All the studies either explicitly or implicitly adopt assumptions concerning the nature of reality, human nature, the basis of morality, the character of society. This section explores these pertinent issues that form the basis of challenges in the study of white-collar crime. First, the phenomenon of reality is a human creation. White-collar crimes involve members of the high social class.
Michel, Heide, and Cochran (2015, p. 639) posit that members of the small social class have little or no influence on the definition of reality to those of the upper social class. Second, the social response to white-collar crime adopts the perception that human beings carry out a cost-benefit analysis, and they are self-interested creatures. They are free to make choices for which they can be held responsible. Moreover, white-collar crimes develop upon hypocrisy. The perpetrators of this offense have forgone lip service to moral absolutes. They rationalize their own unethical, illegal and harmful doings. Last, yet importantly, there is a conventional view that law and social order rely on liberal consensus.
Positivistic and humanistic schools of thought have studied white-collar crime. The positivistic approach draws upon natural and physical sciences. It assumes that white-collar crime can scientifically. The humanistic approach rejects the scientific view and draws from the tradition of Humanities 1989. While scientific scholars study white-collar crime through observation and measurement of quantitative data, humanistic scholars focus on the social construction of its meaning. The humanistic approach utilizes interpretive observation and qualitative methods.
These different foundations underpinning the study of white-collar crime pose enormous challenges. Several challenges face the study of white-collar crime (Peltier-Rivest & Lanoue 2015). First, the different complexity of the criminal influences presents hardships in explaining crime. Second, the natural, financial, and emotional devastation impact of the offense makes it difficult to be dispassionate about it. Third, criminal activities are shameful and illegal. These characteristics create hardships for those who intend to obtain credible data and accurate. Also, the many extralegal responses provided by Justice Agents who represent suspected white-collar perpetrators are difficult to conquer.
Gaining access for research in most organizations is a challenge for those collecting data. Corporations tend to be over-protective of their employees (Kempa 2015). Thus, they put restrictive measures that bar external crime agents from accessing information conce...