17 May 2019
British Columbia’s recently announced probe into suspected money laundering has drawn promises of cooperation from federal officials along with new questions for other provinces.
On Wednesday, British Columbia (BC) Premier John Horgan announced that his government would conduct a public inquiry into the “extent, growth, evolution and methods of money laundering” related to financial institutions, trusts, luxury goods, legal services, accounting, real estate, gaming and horse racing following the release of three independent reviews that described widespread vulnerabilities to financial crime in the province.
The probe, which is slated to reach its preliminary findings in 18 months and a final report in May 2021, will also review the performance of supervisory authorities, the effectiveness of regulatory powers and authorities, and barriers law enforcement officials face when investigating money laundering in the province.
“This inquiry will bring answers about who knew what when and who is profiting from money laundering in our province,” BC Attorney General David Eby said in a statement. BC Supreme Court Justice Austin Cullen “will have the mandate, authority and resources to seek answers, perhaps most importantly among people and organizations who refuse to share what they know unless legally compelled to do so.”
The inquiry is already showing signs that it may have repercussions beyond the province, including for other provincial and federal authorities.
On Thursday, Canadian Minister of Border Security and Organized Crime Reduction Bill Blair said that the federal government is “absolutely committed to participating and cooperating fully with the work that will be done in BC,” according to the Vancouver Sun.
In a report published in March, three watchdog groups concluded that at least $20 billion CAD has entered the greater Toronto housing market over the last decade with little scrutiny from regulatory authorities and the financial institutions involved in the transactions.
Last week, a study on money laundering in BC property found that criminals had likely transferred at least $7 billion CAD into the province’s real estate sector as of last year—a sum believed to be responsible for a 5-percent rise in housing prices in 2018.
“Relatively few money laundering cases have been prosecuted in Canada generally and BC specifically in the past decade,” the study said. “It is estimated that in the last 10 years there have been fewer than 50 money laundering convictions in Canada, compared, for example, with the 1,168 criminal convictions for money laundering secured by the Netherlands Prosecutor’s Office in 2015 alone.”
The recent findings have also raised questions about other Canadian provinces, including British Columbia’s closest neighbor, Alberta, according to a report Wednesday by the Star Calgary.
“Alberta has more crime than British Columbia, and that means there is more money from crime emerging in Alberta itself than in British Columbia,” Brigitte Unger, a professor at Utrecht University and a contributor to the most recent BC report, told the media outlet.
Unlike British Columbia, Alberta has yet to commit to a 2017 agreement to strengthen regulations related to beneficial ownership disclosures, Unger told the Star Calgary, adding that money laundering in Alberta is more likely to involve transactions in the oil and agriculture sectors than in real estate.
Advance your CPD minutes for reading this article, by signing up and using the CPD WalletFREE CPD Wallet