Eby opens door to licensing system for money services
Gordon Hoekstra
The Vancouver Sun
B.C. Attorney General David Eby is considering a B.C. licensing system for money transfer and foreign exchange businesses, which are vulnerable to money launderers.
Eby was responding Monday to a Postmedia investigation that found two dozen money-services businesses in Vancouver, Richmond and on the North Shore are run out of condos and homes, others are run by real estate firms and property developers, and many that have no public face at the street level or online.
The investigation, published last week, also uncovered that a company and owner was fronting a money-services business for another person, and found companies that had supposedly ceased business were still registered with Fintrac, Canada’s financial information-gathering agency.
And court documents alleged the owner of one such business was also involved in an underground banking scheme to move millions from China to Canada.
Eby said the province is in the early stages of policy work on licensing money-services businesses.
“It is certainly possible that any provincial registry would go beyond requiring the principles and the address … to be registered,” Eby said Monday. “It could include background checks and further information to ensure that the businesses are not being abused for the purposes of money laundering.”
Quebec is the only province with a licensing system for these businesses.
Quebec’s licensing process requires applicants to provide a significant amount of information, including legal structure, officers, directors, partners and branch managers; the financial institutions with which it deals; its business plan; and financial statements. The business and its owners must also meet conditions of suitability and obtain a security clearance from Quebec provincial police.
Eby said the need for a B.C. provincial licensing system suggests a failure of the federal government. He said he has been concerned for some time that Fintrac, which already requires money-service businesses to register, isn’t working. It gathers information, he said, there is little action taken on that information.
The Postmedia investigation showed, said Eby, that there are red flags that should be triggering enforcement work on money-service businesses. “And it just doesn’t seem like it happens.”
Across Canada, more than 800 money services businesses handle an estimated $39 billion a year. The federal government and the Financial Action Task Force, an international anti-money-laundering standards-setting agency, have identified the sector as highly vulnerable to money laundering.
In a written response, a federal Finance Department spokeswoman, Marie-France Faucher, said the government is examining changes to Fintrac recommended by a parliamentary committee. She did not respond to questions on whether Postmedia’s findings were a concern and what the federal government might do about it.
Fintrac officials said Monday the agency was prohibited under law from answering questions about specific cases and did not respond to questions on whether it would take action on Postmedia’s findings.
Sources have told Postmedia the federal government will unveil in its budget on Tuesday a new group meant to improve money-laundering investigations and increase the likelihood of prosecutions.
A new “anti-money laundering action co-ordination and enforcement team” is meant to bring together the RCMP, Canada Revenue Agency, Canada Mortgage and Housing, the Justice Department and Fintrac.
Eby said Monday he had no knowledge of Ottawa’s plans.
“I do know that there is a desperate need for some coordinated enforcement that is going to use the intelligence gathered by Fintrac,” he said.
© 2019 Postmedia Network Inc.
