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Money Laundering

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Money Laundering

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    1. Money Laundering

    2. What is Money Laundering? “The process used to disguise the source of money or assets derived from criminal activity” Include: Drug trafficking Extortion Corruption Fraud

    3. They try to “launder” the money so that the source cannot be found. International Monetary Fund estimates $900 billion to $2.25 trillion annually worldwide. Government of Canada estimates the amount in Canada to be in the billions!

    4. Why do the laundry? Criminals want to: Avoid prosecution Increase profits Avoid seizure of accumulated wealth Appear legitimate Tax evasion They are trying to conceal the origin of the cash

    5. Money Laundering Legislation The financial Transactions and Reports Analysis Centre of Canada (FINTRAC) is the Canadian agency responsible for initiatives in this country Created in July 2000 Independent agency Arms length from police & other gov’t agencies

    6. What does FINTRAC do? Collects reports on financial transactions and analyzes them If reasonable grounds exist to suspect the info would be relevant to investigating or prosecuting a ML offence it will go to the Law Enforcement Agency. If there are threats to Canada they disclose to CSIS.

    7. FINTRAC and Privacy Required by Law to protect the personal information it receives from unauthorized disclosure Criminal penalties for FINTRAC employees who unlawfully disclose info

    8. Who must report to FINTRAC? Financial entities (banks, credit unions) Life insurance cos, broker or agents Securities dealers Persons engaged in foreign exchange dealings Money services businesses Accountants & accounting firms Real estate brokers Casinos Individuals – whether a Cdn citizen or not & any entity who is importing or exporting currency or monetary instruments of $10,000 or more.

    9. What must be reported? Suspicious activities Large cash transactions over $10,000 or more International EFTs > or = $10,000 Cross-border currency or monetary instruments of or = $10,000

    10. Deadline to Report Deadline for reporting a suspicious transaction is 30 days after the transaction occurred. Deadline for reporting cash transaction of over $10,000 is 15 calendar days after the transaction occurred.

    11. What if you ignore? Failure to report a suspicious transaction or to make a terrorist property report - up to five years imprisonment and/or a fine of $2,000,000; failure to report a large cash transaction or an electronic funds transfer - a fine of $500,000 for a first offence and $1,000,000 for each subsequent offence; failure to retain records - up to five years imprisonment and/or a fine of $500,000; and failure to implement a compliance regime - up to five years imprisonment and/or a fine of $500,000.

    12. Common money laundering techniques Structuring- Also called smurfing Bank complicity Asset purchases with bulk cash Postal money orders Credit cards Gambling in casinos Refining

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