Presentations and Speeches
Opening Statement by Director Gérald Cossette
Financial Transactions and Reports Analysis Centre of Canada
at the House of Commons Standing Committee on Finance
March 24, 2015
Check against delivery
Thank you, Mr. Chair, for inviting us to speak with you today regarding your broader study on terrorism financing.
I can assure you that we will be as forthcoming as we can with our answers today; however, I know you understand that we cannot provide classified information in this public venue. We are also limited by legislation in what we can say about the information that FINTRAC holds.
I would like to take a few minutes this morning to describe FINTRAC's mandate and the role we play in helping to protect Canadians and the integrity of Canada's financial system.
I will focus, in particular, on the contribution we make — in close cooperation with our police and national security partners — in detecting and combating terrorism financing.
FINTRAC was created in 2000 by the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to deter, prevent and detect money laundering and terrorism financing.
Under this legislation, FINTRAC, police, intelligence and national security agencies, prosecutors and approximately 31,000 businesses across the country all have a role to play in creating a hostile environment for those who seek to abuse our financial system or who threaten the safety of Canadians.
The legislation establishes obligations for financial services entities, money services businesses, casinos and other businesses subject to the Act to establish a compliance program, identify clients, monitor business relationships, keep certain records and report specific types of financial transactions to FINTRAC — including suspicious transactions and international electronic funds transfers of 10,000 dollars or more.
FINTRAC also receives terrorist property reports that are sent to the RCMP and CSIS.
I would like to take a moment to acknowledge the response of Canadian businesses to our request for the accelerated reporting of suspicious transactions immediately following the attacks in Ottawa and Saint-Jean-sur-Richelieu last October. Our goal was to provide whatever assistance we could, within our mandate, to our police and national security partners in preventing another attack in Canada or abroad.
I am pleased to say that the reporting of suspicious transactions increased by 22 percent in October 2014 and the information we received from businesses across the country was useful to our intelligence efforts.
Canada's anti-money laundering and anti-terrorism financing regime — with businesses leading the way — functioned well in the face of these attacks.
The Threat of Terrorism
Mr. Chair, the terrorist threat is real. A number of individuals are now making their way through our criminal justice system for terrorist acts they were planning to commit here in Canada. I know members are aware of the ongoing case against two individuals who were allegedly plotting to explode pressure-cooker bombs outside the British Columbia Legislative Assembly.
As well, just a couple of weeks ago, the Canada Border Services Agency arrested an individual for allegedly planning to blow up the United States Consulate and other buildings in Toronto's financial district.
And finally, last September, an Ottawa resident, who had trained in Afghanistan, entered a guilty plea to terrorism charges in an Ottawa court, and received a 24-year sentence for his crimes.
Following the attacks in Canada last fall, the Director of CSIS confirmed that his organization had identified more than 130 Canadians who have gone abroad in support of extremist activities.
We cannot lose sight of the fact that these very same individuals are being trained, equipped, further radicalized, and may return to Canada at any point in the future. In fact, CSIS has stated that at least 80 individuals have already done so.
The threat posed by foreign fighters and other violent extremists was felt earlier this year in France, where the terrorists who attacked that nation allegedly had deep ties to foreign terror groups.
Just as terrorism is international so too is its funding. We know terrorism funding is obtained from illegitimate sources as well as from legitimate ones. We also know that some of the funds raised to finance these violent crimes originate in Canada or transit through our country. One only has to think of the case of Momin Khawaja, who was found guilty in 2008 of, among other charges, providing funds to facilitate terrorist activities.
Helping to Combat Terrorism
With the 20 million or so financial transaction reports that we receive from businesses every year, FINTRAC is able to provide actionable financial intelligence that assists police and national security agencies in protecting Canada and Canadians.
This intelligence allows us to establish links between individuals and groups in Canada and abroad that support terrorist activities, thereby allowing us to detect the financing of these activities.
Last year, we provided 1,143 disclosures of financial intelligence to our regime partners to assist them in their investigations of money laundering, terrorism financing, and threats to the security of Canada.
Of these disclosures, 234 were related to terrorism financing and threats to the security of Canada. This is more than one disclosure related to terrorism financing every business day.
In April 2014, the RCMP's Integrated National Security Enforcement Teams in Ontario and Quebec recognized our contribution to a terrorism financing investigation on the International Relief Fund for the Afflicted and Needy Canada (IRFAN-Canada), an organization allegedly linked to the terrorist entity Hamas.
The RCMP has also acknowledged FINTRAC's contribution to Project Smooth, which led to the arrest of two individuals for conspiring to carry out a terrorist attack against a VIA passenger train travelling from New York to Toronto.
Financial intelligence has become a key component of our police and national security partners' terrorism investigations. And FINTRAC has provided a number of disclosures as part of the Government's broader effort to combat terrorism and those who have supported terrorists at home or abroad.
Given the complex and transnational nature of terrorism, FINTRAC maintains very strong and productive working relationships with our police and national security partners. In order for our financial intelligence to be actionable, it must be closely aligned with our partners' priorities.
We also work closely with other financial intelligence units around the world to share intelligence and expertise, broadening our reach and analyses of international financial transactions. As soon as we learned of the Sydney hostage-taking in Australia and the Charlie Hebdo attacks in France, we undertook proactive research on targets at the tactical level and offered assistance. Our allies did the same for us after the attacks in Canada last year.
As part of our mandate, FINTRAC also produces classified strategic financial intelligence reports on suspected terrorism financing activities and trends. For example, we have undertaken a strategic/geo-spatial analysis on Syria-related high-risk flows by analyzing international electronic funds transfer reports.
As a result of both our tactical and strategic financial intelligence work, FINTRAC has assumed a leadership role in the international efforts taking place at the Financial Action Task Force, within the Egmont Group of international financial intelligence units, and in other organizations to help combat terrorism financing worldwide.
The success of Canada's anti-money laundering and anti‑terrorism financing regime is dependent on the dedicated efforts of all players, from businesses on the frontlines of Canada's financial system to prosecutors securing the conviction of money launderers and terrorist financiers. Together, we are producing significant results for Canadians.
Thank you, Mr. Chair.
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