Money: Weak rules have made Canada a magnet for money laundering: Don Pittis - - PressFrom - Canada
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MoneyWeak rules have made Canada a magnet for money laundering: Don Pittis

11:26  07 may  2019
11:26  07 may  2019 Source:   cbc.ca

B.C. says its money-laundering reforms could push dirty money to Toronto

B.C. says its money-laundering reforms could push dirty money to Toronto British Columbia’s finance minister says that province’s transparent land registry will push dirty money to real estate markets in other parts of Canada — and Toronto’s at risk. “If you’re a money launderer, provincial lines don’t matter,” Carole James told the Star in an interview Thursday. “Money launders don’t look at borders, they look for opportunities.” “If one province puts something in place and the other provinces don’t it provides

Canada 's weak financial laws and regulations have made the country a prime destination for money launderers and others "Organized crime, tax Canada has become a well-known target, even a magnet , for money laundering , and no wonder. According to a report out today from the C.D. Howe

Money laundering helps drive up the price of real estate because multimillion-dollar mansions allow large blocks of cash to be laundered in a single Canada has become a well-known target, even a magnet , for money laundering , and no wonder. According to a report out today from the C.D. Howe

Weak rules have made Canada a magnet for money laundering: Don Pittis© CBC 'Clean' Canadian money is worth a lot more after it has been laundered, making fines almost meaningless. Instead, the C.D. Howe report is calling for prison time as a penalty.

Editor’s note: The opinions in this article are the author’s, as published by our content partner, and do not necessarily represent the views of MSN or Microsoft.

Canada has become a well-known target, even a magnet, for money laundering, and no wonder.

According to a report out today from the C.D. Howe Institute, a Canadian think-tank, 99.9 per cent of those money launderers are just never caught.

And as British Columbia begins to crack down on the washing of dirty money, the author of the new report, retired corporate lawyer Kevin Comeau, says failure to change national laws just means the crime will go elsewhere in the country.

Bags of cash, luxury car export scheme described in B.C. money laundering report

Bags of cash, luxury car export scheme described in B.C. money laundering report VICTORIA — An independent report suggests organized criminals are laundering money through British Columbia's luxury car sector and some are even receiving tax rebates from the province for the transactions. The B.C. government tasked former RCMP deputy commissioner Peter German in September to identify potential links between criminal enterprises and real estate, horse racing and luxury vehicle industries. Attorney General David Eby called the findings released Tuesday "disturbing confirmation" that money laundering is a problem in B.C. that goes beyond the previously identified channel of casinos.

'Maytag' of money laundering . "All available evidence suggests that international drug barons view Canada as a safe place to launder their illegal cash," said a Maclean's magazine story cited in the tweet. Weak rules have made Canada a magnet for money laundering : Don Pittis .

Weak rules have made Canada a magnet for money laundering : Don Pittis . Money laundering is nearly impossible to quantify because, by nature, it's hidden, but the report's estimate for Alberta seems high, said Greg Draper, a national lead of valuations, forensics and litigation support with law

"It's highly unfair to law enforcement agencies to say that they've been ignoring it," said Comeau, a member of Transparency International Canada's working group on beneficial ownership transparency, in a telephone interview. "The problem is that they don't have the tools to address it."

Ironically, it is Canada's reliable rule of law system that attracts the money launderers. Dirty money can come from crime anywhere in the world, including Canada. But much of it is funnelled out of poor countries and autocratic regimes.

But whether the source is drug crimes or political bribery and theft, the people who claim that money don't want to keep it in those autocratic countries because a more powerful leader could simply take it.

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Don Pittis was a forest firefighter, and a ranger in Canada 's High Arctic islands. People from around the world are coming to Canada to study the different provincial and territorial legalization models as they develop, she said, to see what works and what doesn't. For instance, the issue of quality control

Money laundering is taking place in the luxury car market in the B . C ., including with the use of bags of cash , a second B . C . government report on The role of a straw buyer is to insulate the true purchasers from contact with the seller, the report says. Weak rules have made Canada a magnet

Not so in liberal democracies like Canada where, once you have the legal right of ownership, the law firmly protects that right.

Weak rules have made Canada a magnet for money laundering: Don Pittis© Ben Nelms/CBC Ben Nelms/CBC

For that reason laundered money in Canada is much more valuable than dirty money elsewhere. And that is why money launderers are pleased to pay well over asking for high-priced real estate, where multimillion-dollar blocks of cash can be cleansed in a single deal.

Unlike perpetrators of many other crimes who can be caught in the act and arrested, money launderers have three big advantages.

"One is the invisibility of the crime. The other is the anonymity of the perpetrators of the crime, and the third is the legal difficulties of tracing the money," said Comeau. "Because you don't have a money laundering crime until you can prove that it's the proceeds from an underlying crime, i.e. drug dealing, political corruption, kickbacks, that kind of thing."

Why criminals look to Canada to launder their money through real estate

Why criminals look to Canada to launder their money through real estate News that some $5 billion was laundered through British Columbia's real estate market in 2018 comes as no surprise to experts, as Canada's weak money-laundering laws make it an attractive spot to park ill-gotten cash. Kevin Comeau, author of a recent C.D. Howe report on money laundering, says people in corruption-prone states who seek to hide the source of their wealth can't just buy a big house in their community, so they often look to cache it  abroad. "Autocracies, kleptocracies, developing and transitioning nations — they’ve got corruption from politicians and they’ve got crime from drugs and human trafficking.

There are some do’s and don ’ts when it comes to your Tinder profile and one user knows it all too well. The profile in question belongs to a 21-year-old firefighter named Jonathan, who works at Fair Grove Fire Department. Weak rules have made Canada a magnet for money laundering : Don Pittis .

Weak rules have made Canada a magnet for money laundering : Don Pittis http://bit.ly/2YcouJ0 #BusinessNews #CanadaNews.

For all practical purposes, tracing the money back to it its original illicit source can be impossible for Canadian law enforcement officials.

Down the rabbit hole

Not only has the money been filtered through a web of corporate entities before it comes to Canada, but sometimes the cash passes through companies headquartered in notorious tax havens such as Saint Kitts and Nevis, where it is actually illegal to reveal the beneficial owner. Comeau describes that as the "rabbit hole" of hidden money.

Comeau says that despite Canada's fractured securities laws controlled by each province and territory, there are things lawmakers can do now if they are serious about making Canada less of a money laundering oasis and bringing the country up to the standards of other rule of law countries.

Weak rules have made Canada a magnet for money laundering: Don Pittis© Pilar Olivares/Reuters Pilar Olivares/Reuters

Canada allows nominees, companies and trusts to buy and sell property without revealing the person who is the beneficial owner. Comeau said that must change.

The key provision of any such laws would be that the lawyer or other agent moving money through Canada must reveal the beneficial owner of that money in a publicly searchable database.

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Comeau insists it is crucial that the information is not on a private database, but is available for everyone, including people who may have lost that money overseas.

While that conflicts with privacy laws, proponents of the changes says it is well within Canadian law in order to solve this money laundering crime.

Prison time required

To be effective the law must create offences that could include declaring money to be clean when it is not, falsely declaring beneficial ownership, and something called "unexplained wealth orders" that allow authorities to demand the source of money back to its origin.

The other essential part of the new laws must be the inclusion of imprisonment as a penalty for serious violations, because with so much money at hand, fines become meaningless. Prison time would be something else again.

"Then the law enforcement agencies would have something right at the beginning to say to the guy: 'Tell us who the beneficial owner of all this is or we're going to charge you,'" said Comeau.

"The money launderers have to bear the very real risk that the person will cut a deal with law enforcement agencies and give them the information leading back to the perpetrators of the original crime."

The entire C.D. Howe report will be available in this link once the document is released at about 7 a.m. ET Tuesday.

Follow Don on Twitter @don_pittis

Read more

The disturbing question of why Canada's done so little to end money laundering: Don Pittis.
Despite the latest flurry of money laundering stories, it's not a new problem. Canada has long had a reputation as haven for illicit cash. Was it just mistake? Or does a failure to crack down imply the country was knowingly profiting?

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