Predicate Offenses? The Detection of Money Laundering and Terrorist Financing by Canadian Financial Institutions

Canadian Financial Institutions, like their international counterparts, have been legally mandated to perform an increasing array of crime-detecting functions. Money laundering and terrorist financing are at the forefront of government and regulatory concerns, yet, there is little specific legislative guidance for institutions to detect these activities. Canada’s Proceeds of Crime (Money Laundering) and Terrorist Financing Act requires that all transactions appearing suspicious to the person conducting them be reported to Fintrac, Canada’s anti-money laundering reporting agency; the high degree of discretion afforded to individuals working in institutions legally required to report transactions reflects a blurring of ‘terrorist financing’ and ‘money laundering’. This paper examines the reporting process, paying particular attention to the development of ‘Unusual Transaction Reports’ and ‘Suspicious Transaction Reports’, which serve as a unified mechanism for reporting any and all potentially irregular financial activity. This paper argues that by requiring Financial Institutions (and other similar financial bodies) to report ‘suspicious’ transactions, Canada’s anti-money laundering and anti-terrorism financing legislation may capture far more innocuous than illicit financial activity.