By Christine Duhaime | March 31st, 2018

Canada once again a “Major Money Laundering” country

The 2018 “International Narcotics Control Strategy Report” (INCSR) published in March 2018 by the U.S. Department of State identifies Canada once again as a “major money laundering country” along with a host of risky countries for financial crime, and is generally doing a lot worse combatting money laundering and drug trafficking.

A “major money laundering country” is one whose banks and financial institutions allow financial transactions involving significant amounts of proceeds of crime. For several years in a row, Canada has been identified as such.

Canada has also been identified as a “major precursor country” which means it is a leading country that produces precursors or essential chemicals used in the production of illicit narcotics, such as fentanyl. Other countries include Columbia, Nigeria, China, Afghanistan and Mexico.

Key Findings

Volume 1 – The key findings of Volume 1 on drug trafficking vis a vis Canada are that:

Canada is a primary source country of high-potency marijuana and MDMA to the United States.

Canada exports illegally, synthetic opioids to the United States.

Canada exports, illegally, synthetic drugs and amphetamine-type stimulants to Asia and Australia.

Cannabis destined for the US is produced mostly in British Columbia.

Methamphetamine continues to be produced in large quantities in Canada.

Canada increasingly illegally imports fentanyl from China via mail courier.

Recent seizures of multi-kilogram quantities of illegal fentanyl and carfentanil in powder form indicate these substances are increasingly manufactured illegally within Canada.

Volume 2 – The key findings in respect of money laundering in Volume 2 for Canada are different in 2018, compared to 2017, and indicate a much greater global concern for money laundering in Canada.

The Report says, for example:

Foreign-generated proceeds of crime are laundered in Canada.

Professional, third-party money laundering is a key concern – this often includes accountants and lawyers.

Transnational organized crime groups and professional money launderers are key threat actors.

Canada does not do enough on enforcement and prosecution.

Laundering methods in Canada primarily involve cash smuggling, money services businesses, casinos, real estate, wire transfers, offshore companies, hawalas, credit cards and digital currencies, like Bitcoin.

The illicit drug market is the largest criminal market in Canada.

Transnational organized crime groups represent the most threatening and sophisticated actors.

Experts have noted that when the magnitude of money laundering risks in Canada is taken into account, the prosecution rate is low.