The Cullen Commission Report was released on June 15, 2022, outlining an extensive review of the state of money laundering activity in the Province of British Columbia (BC), which included 101 recommendations on how to better combat money laundering and the proceeds of crime. The Report included key recommendations that would require additional AML considerations for BC credit unions. This could potentially translate into changes at a federal level, and in other provinces, depending on FINTRAC and other regulator’s responses to the Report.
The Report found money laundering to be a substantial problem in BC, where there wasn’t a sufficient appreciation of the scale and depth of the level of activity by the federal and provincial governments, and the governments were “ineffective” at addressing it. FINTRAC was specifically called out for making a low number of disclosures to law enforcement, thereby capping law enforcement’s effectiveness.
Recommendations of key significance to credit unions:
Provincial Anti-Money Laundering Regime
- Recommendation 1: Establishing an independent AML Commissioner in BC – to provide permanent and strategic oversight of money laundering in BC.
Banks and Credit Unions
- Recommendation 45: BC Financial Services Authority (BCFSA) to develop anti-money laundering guidance for credit unions.
- Recommendation 46: Province of BC to provide the BCFSA with a clear, enduring AML mandate.
- Recommendation 47: Province of BC to provide the BCFSA with sufficient resources to create and staff an AML group, to serve as a central contact point for the BCFSA with law enforcement, public-private partnership, and other government stakeholders.
Information Sharing and Collaboration among Financial Institutions
- Recommendation 48: Federal PIPEDA should be amended, providing for a “safe harbour provision” allowing financial institutions to share information related to potential money laundering activity.
- Recommendation 49: In Consultation with the Office of the Information and Privacy Commissioner, a safe harbour provision allowing provincially regulated financial institutions to share information related to potential money laundering activity.
- Recommendation 50: Implement a formal “keep open” regime for FIs in which they can, at the request of law enforcement, keep an account suspected of money laundering open to further a law enforcement investigation.
The recommendations, if implemented, have the potential to change BC’s approach to attacking money-laundering in the province. If implementation of recommendations 45-47 is pursued, credit unions in BC will be required to adhere to an extra layer of AML regulations. Further, the impact of the Report can have significant policy impact on compliance requirements at a federal level, and in other provinces, if these bodies decide to pursue implementing the Report’s recommendations.
If you have any questions, please contact Gavin Karaiskos.