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Good morning. I would like to thank the Committee for the opportunity to speak to the study of Bill C‑12 - An Act respecting certain measures relating to the security of Canada’s borders and the integrity of the Canadian immigration system and respecting other related security measures ("Bill C‑12" or "the Bill").
My name is Hartland Elcock, and I am an Assistant General Counsel and Vice President with the Canadian Bankers Association; with me is Michael Donovan, a member and Chair of the CBA’s Anti‑Money Laundering Specialists Group and Senior Vice‑President & Chief AML Officer, Canadian Imperial Bank of Commerce. We are both pleased to be here today to speak to Bill C-12.
The CBA is the voice of more than 60 banks operating in Canada, employing more than 300,000 Canadians, and helping to drive Canada’s economic growth and prosperity.
Our members take the fight against money laundering, terrorist financing, and sanctions evasion seriously. Among the most active reporting entities in Canada’s AML Regime, they devote significant resources to their AML programs, including their internal controls and employee training. Much of this investment focuses on continuous improvements to address the shifting landscape of compliance requirements and the evolving nature of risk. Their goal is to effectively deter, detect and report suspicious activity and to mitigate money laundering, terrorist financing, and sanctions evasion.
As major stakeholders within Canada’s AML Regime, our members’ participation moves beyond compliance. Banks play a leadership role in Public‑Private partnership ("PPP") projects with FINTRAC. One of these PPPs is Project Guardian, which is focused on identifying transactions or attempted transactions where there are reasonable grounds to suspect money laundering related to the fentanyl trafficking. This project led to FINTRAC operational alerts that highlight indicators of suspicious transactions for all reporting entities.
The CBA and its members also actively participate in ongoing enhancements to Canada’s AML Regime. For example, the CBA and members have long sat on the federal Advisory Committee on Money Laundering and Terrorist Financing. We have also been advocates supporting comprehensive beneficial ownership transparency in Canada and increased private‑to‑private information sharing for AML and ATF purposes. These changes are a step forward for Canada’s AML Regime.
In alignment with our members’ position and investment in Canada’s AML Regime, we suggest targeted changes to Bill C‑12 (which do not change the substance of it) and new regulations to help the Bill achieve its policy goals, while mitigating adverse outcomes.
More specifically, the CBA suggests the following targeted changes to provide clarity to Bill C‑12’s proposed changes to the Regime that will reinforce a risk‑based approach, preserve the efficacy of recent enhancements to the AML Regime (e.g., private‑to‑private information sharing) and promote transparency and predictability:
- Defer the coming into force of the increased administrative monetary penalties (AMPs) until regulatory criteria are established to ensure their transparent and predictable application, reserving the highest AMPs for egregious or systemic issues
- Add a regulation making power to establish and provide certainty on the criteria for assessing if a compliance program is reasonably designed, risk-based, and effective
- Remove the one‑year limit to extending a compliance remediation agreement to prevent the arbitrary application of significant additional fines (e.g., where a delay is outside the control of a reporting entity)
- In determining if a client’s name is "obviously fictitious," rely solely on the judgement of the reporting entity, as this is a highly subjective standard
- Exempt banks from mandatory FINTRAC enrollment due to existing oversight
- Amend the proposed false information offense to reflect "intent to deceive" (consistent with other similar provisions in the Criminal Code) to avoid triggering the offence when providing information (or not) in good faith
- Clarify that, like a violation, an offence alleged to have been committed before the coming into force of the proposed new provisions in Bill C‑12 will not be subject to them
Thank you, again. I will now turn to Michael Donovan for final remarks.
My name is Michael Donovan, and as indicated, I am here in my capacity as the Chair of the CBA’s Anti‑Money Laundering Specialist Group. I appreciate the opportunity to speak to Bill C‑12.
I want to highlight the commitment of CBA members to an efficient and effective AML Regime. CBA members recognize the banking industry’s role within Canada’s AML Regime. They make significant investments in their AML programs and work closely with FINTRAC, Finance Canada, law enforcement agencies, and prudential regulators to deter and detect, money laundering, terrorist financing, and sanctions evasion activities. They also participate actively in discussions and consultations with government to help inform the ongoing evolution of Canada’s AML Regime.
Adopting the technical changes to Bill C‑12, as outlined today and in the CBA’s brief to the Committee, will help ensure a fit‑for‑purpose, risk‑based AML Regime that can more effectively target, and keep pace with evolving risks. This will strengthen our collective ability to protect the interests of all Canadians.