Money-laundering has been a significant problem for Canada because such a practice enables and facilitates many criminal activities such as drug trade, fraud or even global terrorism. It should be noted that many financial institutions of the country are engaged in the transactions that enable criminal organizations to conceal their revenues and legitimize them. This is they survive for a very long time. This paper is aimed at discussing the strategies used by Canadian government to combat money-laundering. In particular, it is necessary to evaluate the efficiency of these strategies. Overall, one can argue that this issue can be properly addressed if local and international organizations join their efforts and enforce laws that make money-laundering both punishable and unprofitable.
On the whole, the efforts of the government are based on the premise that the major cause of money-laundering is drug trade. Certainly, the dangers of terrorism financing should also be taken into account, but the majority of money-laundering cases are related to narcotics. This is one of the reasons why the state implemented laws that against drug trafficking. Furthermore, the government emphasized the necessity of educating individuals and families in order to protect them from the dangers of substance abuse. The combination of these practices was called Canada’s Drug Strategy or CDS. This approach enabled the state to reduce the supply as well as demand for drugs. Nevertheless, CDS did not create mechanisms that could stop money-laundering practices. This policy is not directly related to banks or casinos that help criminal organizations. This is one of its major limitations.
Yet, there are policies that are directly related to money-laundering. One of them is the prevention of cash smuggling across the national borders of Canada. In part, the policies of the state are aimed at preventing criminal organizations from bringing money to the country and delivering it to financial institutions that can later conceal these assets. This is why law-enforcement agencies of the country carried out a series of operations in order to achieve this goal. For instance, one can mention such a project as Operation Mantis that resulted in the confiscation of more than $3 million. Furthermore, the officers of CBSA (Canada Border Service Agency) arrested a vehicle that carried $.330.000. It is believed this money could belong to a large criminal organization. Certainly, these activities are important because they limit the flow of illegal money into Canada at least to some degree. Moreover, they can uncover existing networks of various criminal syndicates. The activities of law-enforcement agencies can also highlight the methods of smuggling money into the country. This is why their importance should not be disregarded. However, such operations can capture only a very small portion of money derived from drug trafficking or fraud. Apart from that, they do not affect the financial institutions that may support illegal transactions. Thus, one can argue that the success of these strategies is very limited. The efficiency of law-enforcement agencies is essential for combating money laundering, but it is not sufficient. This is one of the issues that policy-makers and legislators should not overlook.
Additionally, this problem can be effectively addressed provided that various governmental agencies implement laws that prohibit money-laundering and enforce them effectively. Canadian policy-makers agree with the idea that organized crime can be addressed properly if public agencies know how illegal activities are conducted and how different parties interact. Thus, this task requires close cooperation of many agencies that should share information with one another. The Canadian government created such institutions that were supposed to stop illegal financial transactions. For example, one can speak about the Financial Action Task Force. This organization had to cooperate with legislators, financial institutions, and law-enforcement agencies in order to reduce money-laundering. The result of this cooperation is new legislation that makes money-laundering unprofitable. Moreover, these legislative acts criminalize such activities. For instance, one can mention the amendments of the Criminal Code according to which the government could forfeit the assets of criminal organizations. Therefore, they cannot ensure that their money is fully protected, and it is difficult for them to conceal their assets. Furthermore, special attention should be paid to the Proceeds of Crime (Money-Laundering) and Terrorist Financing Act. This law requires financial organizations to report suspicious transactions and disclose the identities of their clients, if they may be engaged in illegal activities. According to this law, banks, security dealers and even casinos are obliged to report possible money-laundering practices; otherwise they may face criminal penalties. Thus, this legal act is essential for legal prosecution of money-laundering. It should be note that current Canadian legislation attached importance to the responsibility of financial organizations and their employees who may facilitate money-laundering. In other words, they have an incentive to disclose illegal transactions and comply with the law. It is possible to say that this strategy has been quite effective. For instance, one can mention that Canadian institution filed 3.747 reports about some of their clients. This legislation improved the work of FINTRAC or the Financial Transactions and Reports Analysis Centre of Canada. This agency was able to obtain data about more 500 cases that could be related to money-laundering or other illegal transactions. These disclosures have been of great use to law-enforcement agencies. In this way, these organizations can uncover a great number of criminal networks and identify companies that assist money-laundering of drug traders or other offenders. This is the main advantage of this approach.
On the whole, these examples show that legislative changes can be more effective for combating money-laundering than separate operations of law-enforcement agencies. Well-developed laws compel financial organizations to disclose the information about the illegal activities of their customers. Furthermore, this strategy raises the cost of money-laundering. The thing is that criminal organizations can easily lose the money that they derive from drug trade or fraud. Therefore, money-laundering may simply become unprofitable and dangerous. This is why it is extremely difficult for criminals to legitimize their illegal revenues. If the activities of police are also efficient, many gangs or syndicate may not be able to operate effectively. They will not longer be sustainable.
Certainly, money-laundering still remains a significant problem for Canadian society and one cannot say this problem will be completely resolved in the near future. Nevertheless, the cooperation of public agencies and the development of efficient ways can reduced this activity to the minimum. Canadian government should take into consideration that this activity involves a variety of participants such as smugglers or employees of financial institutions. By looking at this problem from this perspective, Canadian policy-makers can better cope with the activities of criminals.