Stories
FATF Urges Canada to Boost Complex Money Laundering Prosecutions
- •A new report by the Financial Action Task Force (FATF) and the Asia-Pacific Group on Money Laundering (APG) highlights Canada's mature understanding of illicit finance risks but stresses the urgent need to step up investigation and prosecution of complex money laundering cases.
- •Canada has strengthened its defenses against illicit finance, notably by improving corporate transparency and beneficial ownership mechanisms, but substantial work is still required to reinforce risk-based supervision and address critical vulnerabilities across high-risk non-financial sectors.
- •The report notes persistent challenges in investigating and prosecuting sophisticated money laundering schemes, including professional and standalone offenses, despite strong multi-layered inter-agency coordination.
- •Concerns were raised regarding supervision, with a significant portion of financial institutions and virtual asset service providers not being subject to entity-level risk assessment, limiting targeted supervision of high-risk firms.
- •Canada received a roadmap of Key Recommended Actions, including strengthening risk-based supervision, implementing a pan-Canadian corporate beneficial ownership framework, prioritizing complex money laundering cases, and expanding asset recovery.
Key Questions Answered
The FATF and APG report found that while Canada has a mature understanding of its illicit finance risks and has improved corporate transparency, it urgently needs to step up the investigation and prosecution of complex money laundering cases linked to drug trafficking, fraud, and organized crime.
The report identified vulnerabilities in high-risk non-financial sectors, notably dealers in precious metals and stones, real estate, and financial institutions or virtual asset service providers lacking entity-level risk assessments. Additionally, lawyers remain outside the primary anti-money laundering framework.
Canada received a roadmap of Key Recommended Actions to complete within three years, which includes strengthening risk-based supervision of non-financial sectors, advancing a pan-Canadian corporate beneficial ownership framework, prioritizing complex money laundering prosecutions, and expanding asset recovery.
