FINA Committee Meeting

STANDING COMMITTEE ON FINANCE

COMITÉ PERMANENT DES FINANCES

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, April 11, 2000

• 0905

[English]

The Chair (Mr. Maurizio Bevilacqua (Vaughan—King—Aurora, Lib.)): I'd like to call the meeting to order and welcome everyone here this morning.

Let me, first of all, apologize to the officials for the room. Unfortunately, due to lack of meeting rooms because of the Auditor General's report and lock-ups and what have you, we have to use these close quarters. This is yet another example of where perhaps some renovations should take place in this place. Of course this is a great idea by the Reform Party.

First of all, the order of reference today is Bill C-22, an act to facilitate combating the laundering of proceeds of crime, to establish the Financial Transactions and Reports Analysis Centre of Canada, and to amend and repeal certain acts in consequence. This is the order of reference we received from the House of Commons. This is what we'll be doing today. We will hear from the parliamentary secretary and a member of this committee, Mr. Roy Cullen. Welcome.

Later on other officials will also participate in the question and answer session. As you may know, we usually give 10 to 15 minutes for opening remarks, and thereafter we engage in a question and answer session.

Mr. Cullen, welcome.

Mr. Roy Cullen (Parliamentary Secretary to the Minister of Finance): Thank you very much, Mr. Chairman. Merci beaucoup, monsieur le président.

Let me first introduce the people at this table here, the officials who will be prepared to take questions later. With me are Mr. Horst Intscher, who is the executive director of the transition team, Financial Transactions and Reports Analysis Centre of Canada; Mr. Richard Lalonde, who is the acting chief, financial crimes section, financial sector policy branch; Yvon Carrière, senior counsel; and Charles Seeto, director, financial sector division, financial sector policy branch, and other officials who we can introduce more fully later.

Mr. Chairman, I appreciate the opportunity to speak to the committee today about Bill C-22, the proceeds of crime or money laundering bill. I'll keep my remarks brief so that we can have plenty of time for questions. This bill, Mr. Chairman, updates and strengthens the existing act by the same name that has been in force since 1991. The legislation improves the detection, prevention and deterrence of money laundering here in Canada.

[Translation]

Before going further, I should define the expression "laundering of proceeds of crime". It is a process by which money illegally gained from criminal activities is converted into assets which cannot be easily tracked back to their origins.

[English]

In other words, Mr. Chairman, this is money that is laundered to hide its origin. While open borders encourage competitive international markets and greatly benefit trading nations like Canada, they also have a potential downside in that criminals can use them to infiltrate financial markets for the purposes of money laundering. Today's globalized financial markets make it very easy for criminals to launder millions of dollars every day in illegal profits from drugs and proceeds from other crimes such as burglaries and cigarette smuggling.

It is estimated that between $5 billion and $17 billion are illegally moved in and through Canada every year. Mr. Chairman, this is a serious problem, one that requires that adequate measures be put in place to deter and detect money laundering and ensure that financial intermediaries exercise due diligence in the conduct of their business.

In addition, the reputations of financial intermediaries that are victims of money laundering could be adversely affected.

[Translation]

Here in Canada, we are committed to combat money laundering as efficiently as possible. If traditional investigation methods are no longer as effective as they should be, new measures must be adopted for that purpose.

[English]

Bill C-22 provides these new measures. It does so by responding to calls by Canadian law enforcement agencies for legislation requiring the mandatory reporting of suspicious transactions and cross-border movements of currency. This legislation was designed with the goals of giving law enforcement agencies the tools they need while at the same time protecting individual privacy. Bill C-22 meets both these goals.

• 0910

Bill C-22 also addresses concerns raised by the Financial Action Task Force on money laundering, a group established by the G-7 in 1989, that Canada was not meeting international standards on mandatory reporting of suspicious transactions and in centralized collection and management of reports. Indeed, Canada is the only country not to require mandatory reporting. With the passage of this legislation, our reporting regime will be in compliance with Financial Action Task Force standards and in line with most industrialized countries around the world.

Before I outline the specifics of the bill, it is important to note that this legislation was not developed in isolation but is the result of extensive consultations with many interested parties, including the provinces and territories, stakeholders from the financial and law enforcement communities, consumer groups, and organizations with an interest in privacy issues.

[Translation]

Mr. Chairman, I would like to take some time to explain the main elements of this bill.

First, Bill C-22 maintains the requirements about record keeping and client's identification already provided by the Laundering of proceeds of crime (money laundering) Act.

[English]

Second, the new measures being introduced include the requirement for financial intermediaries to report where there are reasonable grounds to suspect that there are financial transactions that are related to money laundering. In addition, regulations are being developed that will describe specific transactions, such as the receipt of $10,000 or more in cash, which must be reported. Regulated financial institutions, casinos, money service businesses, and currency exchange businesses, as well as lawyers and accountants, will all be subject to these reporting requirements. Failure to report suspicious transactions can result in jail terms of up to five years or fines of up to $2 million.

Third, large cross-border movements of currency must also be reported. The importation or exportation of large amounts of cash or monetary instruments like traveller's cheques will have to be declared to Canada Customs. Failure to comply may result in the cash being seized. Review and appeal mechanisms will be in place to deal with cross-border seizures and penalties. Seized currency will be returned once a fine has been paid, unless Customs suspects it represents proceeds of crime.

Fourth, this bill establishes the new Financial Transactions and Reports Analysis Centre of Canada.

[Translation]

The Centre, which will be independent from law enforcement agencies, will receive the reports that are required by the law, analyze and assess those reports and disclose to law enforcement agencies from everywhere in Canada information regarding any activities suspected of being related to the laundering of proceeds of crime.

[English]

The centre will be authorized to provide information to the appropriate police force if, on the basis of its analysis, the centre has reasonable grounds to suspect that the information would be relevant to a money-laundering offence. The bill also allows the centre to disclose information to the Canada Customs and Revenue Agency, the Canadian Security Intelligence Service, and Citizenship and Immigration Canada if, in addition to being relevant to money laundering, the information is also relevant to their activities.

As a central point for the collection, analysis, and disclosure of information, the centre will cooperate internationally in the exchange of information with similar agencies, enhancing Canada's role in the global fight against money laundering. Further, the centre will be responsible for monitoring compliance with record keeping, client identification, and financial transaction reporting requirements, and where appropriate, it will seek partnerships—for example, with provincial regulatory bodies—to assist with carrying out this function.

I can assure this committee that the collection, use, and disclosure of information by the centre will be strictly controlled. Only a specified, limited amount of information reported to the centre will be passed to the police and other designated agencies, and only under specified conditions. The information that can be disclosed is limited to key identifying information, such as the name of the client, the account number involved, the amount and location of the transaction, and other similar information. Law enforcement authorities will be required to build a case for prosecution purposes and obtain a court order for disclosure before any further information could be passed on. The centre and its employees will also be immune from subpoena, search warrants, and other compulsory processes, except with respect to money-laundering investigations and prosecutions.

• 0915

[Translation]

Finally, the Centre will be subject to the Access to Information Act and to the Privacy Act, and legal penalties will be imposed for the unauthorized use or disclosure of personal information held by the Centre.

[English]

Bill C-22 provides regulation-making authority with respect to the coverage of entities, client identification, record keeping, and reporting requirements. Mr. Chairman, such regulation-making authority provides the needed flexibility to respond quickly to the ever-changing nature of money laundering, and to adapt the regime to changes in the way financial intermediaries conduct their business. It also allows greater flexibility to respond to issues raised by stakeholders in complying with the legislation.

Extensive consultations have already begun on proposed regulations, with the release of the Department of Finance's consultation paper last December. Submissions were received and departmental officials have met with many stakeholders to hear their views. Further consultations will be required over the coming months to further refine the current regulatory proposals and to develop additional proposals regarding the form and manner of reporting.

It should be noted, Mr. Chairman, that Bill C-22 provides a statutory minimum 90-day pre-publication requirement for any regulation proposed under the act, and a minimum 30-day notice period if further changes are made to the proposed regulation. This requirement goes well beyond what is provided in many federal statutes, reflecting the importance that the government attaches to public consultations in this particular area.

Mr. Chairman, the benefits of this new reporting system are numerous. The new system will rely on the individuals—for example, financial intermediaries—who are in the best position to detect money laundering as it is occurring. It will also provide more reliable and consistent reporting in a more timely manner.

[Translation]

The reports, being centralized at the new Centre, will provide essential analyses which will allow police forces to follow reliable tracks and to use law enforcement resources more efficiently.

[English]

Successful investigations and prosecutions can ultimately lead to court-ordered forfeiture of the proceeds of criminal activities. This will also allow Canada to better shoulder its international responsibilities and anti-money-laundering efforts by enhancing its ability to cooperate with other countries.

In conclusion, Mr. Chairman, Bill C-22 targets the financial rewards of criminal activity, and protects the integrity of our financial system in Canada. It creates a balanced and effective reporting scheme to uncover criminal activity while protecting individual privacy. It also complements other federal initiatives against organized crime, along with helping Canada to meet its international commitments in this area.

[Translation]

Mr. Chairman, those are the main provisions in bill C-22. Myself and the officials here will now be happy to answer your questions.

Thank you.

[English]

The Chair: Thank you very much, Mr. Cullen.

We'll now proceed to the question and answer session, and we'll begin with Mr. Abbott.

Mr. Jim Abbott (Kootenay—Columbia, Canadian Alliance): Thank you. Could you tell me what the format is, just before we start?

An hon. member: We can have as much time as we want.

The Chair: You have a ten-minute round, so make the questions nice and brief so that we can get as many in as possible.

Mr. Jim Abbott: Okay, thank you.

Mr. Cullen, thank you for your presentation. To the officials and everyone else squeezed into this room, welcome. This is what it must feel like to be in a sardine can, but I'm not really sure.

First, let me just quickly restate what I said in the House. If the Liberals were given a hamburger franchise, I think they'd do away with the concept of fast food. This legislation has been an awfully long time coming, and certainly the Canadian Alliance is in favour of this legislation in principle. There are some questions that I have, though.

In a private briefing that I had with some of the officials, they explained something to me that I would like to get on the record. Whoever feels they can most appropriately respond to this question can do so: Why do we need a separate transaction centre? Why can we not use the existing bureaucracy and perhaps do some fine-tuning within the existing system, rather than adding a new level of bureaucracy and more people? I'd like to get that on the record, please.

• 0920

Mr. Roy Cullen: Thank you. Maybe I can start and then refer it to perhaps Mr. Lalonde.

The reason for an agency is to ensure and safeguard the privacy provisions of citizens so that there is a vetting of information and so that only high-level information will be submitted to the police if there's a suspicion of money laundering. What we're doing is consistent with all G-7 countries, as I understand it, and it's mostly geared to making sure only serious concerns about alleged money-laundering activities are reported to the police and the privacy of citizens is maintained.

Perhaps Richard or Charles can add to that.

Mr. Richard Lalonde (Chief, Financial Sector Division, Department of Finance): Thank you, Mr. Chairman.

That's right. The need for an independent agency here is underscored. Other countries of the Financial Action Task Force have this particular model. Independence from government bureaucracy and from law enforcement agencies is critical, because this agency will be collecting and analysing sensitive information, personal information, about Canadians' financial transactions. It will need to safeguard the information it does gather, and it needs independent judgment from government to determine whether or not to disclose certain information to law enforcement agencies and other appropriate organizations.

Mr. Jim Abbott: I'm a little concerned with some specific phrasing used there. Would it be at the discretion of the government to release the information? Is that what you said?

Mr. Richard Lalonde: No, quite the contrary. I meant to say it's at the discretion of the agency itself, and that's why it needs this independence to carry out its mandate.

Mr. Jim Abbott: Okay.

Why would a libertarian not be concerned about further intrusion into the affairs of Canadians with this legislation and with this transaction organization?

Mr. Roy Cullen: I suppose, Mr. Abbott, you can't have your cake and eat it too. On the one hand, the creation of a centre is designed to make sure the privacy concerns of Canadians are respected. In designing the legislation and in designing the agency in the consultations to date, we've taken great care and great pains to make sure the privacy of Canadians is respected. I'm sure some individuals, organizations, and stakeholder groups will make representations to this committee that there is a concern about privacy issues, but we feel we've dealt with them in a very comprehensive way.

Richard, would you like to add anything?

Mr. Richard Lalonde: That's fairly comprehensive. A number of safeguards have been set in the legislation to protect the information that is collected from Canadians by this proposed agency, and we can certainly go into more detail about that if you wish.

Mr. Jim Abbott: Should there be any concern on the part of Canadians, either individuals or businesses, about part 4, subclause 73(2) of the legislation? It reads:

A copy of each regulation that the Governor in Council proposes to make under subsection (1) shall be published...

etc. I realize that's fairly standard in this kind of legislation, but I put that up against a letter I think a lot of us received, dated February 8, from H&R Block. The individual here makes a point about the $1,000 record-keeping threshold. He says:

Our principal concern is section IV... which requires that we retain a record for five years or more of every transaction of $1,000 or more.

and so on and so forth.

I haven't had an opportunity to inquire of the writer, Mr. Irving, from H&R Block. I haven't interviewed him at all. But I found this letter kind of confusing when I took time to refer to the legislation, where I don't see anything about $1,000. But then that raises the question: should Canadians and should business be concerned about the fact that this is, with due respect, a form of blank cheque, and an onerous amount of regulations and record keeping might end up being piled onto individuals and businesses in Canada under this open-ended subclause, 73(2)?

• 0925

Mr. Roy Cullen: To start off, we tried in the legislation to strike the right balance in the number of organizations or sectors included in the reporting requirements. At this point it's limited to financial intermediaries. Once you go beyond that, you can put some compliance costs onto other businesses that may not be necessary.

In the whole process, because we're breaking new turf, we'll be guided by the idea of developing regulations in consultation with stakeholders, and we'll also be guided by the experience as we implement the act and the agency.

Clearly the intent is not to put an excessive burden on businesses, but we feel it will be the responsibility of those who are involved at the front end of receiving cash or receiving that kind of information to report.

With respect to H&R Block, perhaps Richard or Horst would like to comment.

Mr. Richard Lalonde: Sure. H&R Block provided us with comments on the consultation paper on the proposed regulations. My understanding and my recollection is that their concerns were about some of the thresholds being proposed. These thresholds are provided for, or at least the regulation-making authority is provided for, in clause 73 of the bill. We are in ongoing dialogue with stakeholders now to refine those proposals.

It's clear we have no intention of unduly burdening anyone. In fact in advancing the consultation paper, we stated quite clearly that our objective here is to minimize the compliance burden, and we're very sensitive to that. That is why we will be discussing these issues directly with stakeholders over the coming months to get it right.

Mr. Jim Abbott: I have the greatest respect, in all sincerity, for everyone sitting at this table and indeed everyone in this room, and I don't question the intent of any individual in this room. What I'm concerned about is the growing encroachment of bureaucracy and the reporting functions required for business that are absolutely strangling business around Canada.

As I said, the Canadian Alliance supports this legislation in principle. We understand why it is required, and indeed it should have been here a couple of years ago. That being said, we're still very concerned about the fact that although every good intent in the world is going into this thing, it has the potential to become a real paperwork nightmare if it is not very, very tightly regulated.

Mr. Roy Cullen: Mr. Abbott, you're right that we need to be very careful about the reporting requirements we've put in place. Because the act also calls for a 90-day period for gazetting any additions or changes to the regulations, it gives Canadians a lot of time to respond and express their concern if they feel the government is going too far. It's something that has to be monitored very carefully.

Our coming forward now at this time with this legislation means we've taken the time to consult extensively and we want to ensure we have it right. We think we're getting close, but the consultations with this committee and with other stakeholder groups on the regulations will be very beneficial in setting the right course.

The Chair: Thank you, Mr. Abbott.

[Translation]

Mr. Marceau.

Mr. Richard Marceau (Charlesbourg, BQ): First, thank you Mr. Cullen for your presentation. I also want to thank all those who dared to come here with you in this closed room.

Mr. Cullen, I would just like to understand somewhat better the link between FATF and bill C-22. As I understand it, bill C-22 was proposed after some recommendations from FATF, which brings together countries not only from Europe but also from the Gulf and North America.

• 0930

Are we heading towards systems that would be quite similar in all countries of the world by following FATF's recommendations?

Mr. Roy Cullen: I think we must coordinate our efforts with those of other countries. Member countries of G-7 have established that Action group with a view to improve the situation and to coordinate activities aimed at minimizing money laundering in all countries.

[English]

Perhaps the officials could...

[Translation]

The Chairman: Mr. Lalonde.

Mr. Richard Lalonde: Sure. Money laundering is a global problem which, therefore, requires world-wide solutions or combatting measures, hence the need for international cooperation. FATF was created in 1989 to establish international standards in order to allow member countries to cooperate more efficiently in combatting money laundering.

Bill C-22 of course draws its inspiration from the standards that were established by FATF as well as from FATF's reviews about the situation in Canada.

Mr. Richard Marceau: All right. Therefore, the Centre which is going to be created has its equivalents in other countries in the world; that's what you are telling me. It has or will have equivalents in other countries of the world.

Will the canadian centre be able or have to disclose certain information to other centres throughout the world in order to combat precisely what you call that world-wide problem? I assume that it will.

I am getting at my question. In Canada, we have established certain standards after which such a centre will have to operate. You mentioned the Access to Information Act and the Privacy Act. Now, some countries in the world do not necessarily have such protections. I'm asking you that question, but let me tell you at once that we support that bill. Is there not a danger that some protected information the disclosure of which is forbidden here in Canada could then be diverted, communicated to another country and ultimately reappear somewhere in Canada through another channel? In one word, could we be brought to do through the back door what we are not allowed to do through the front door? Via agreements with other countries, will it be possible for us to avoid the exportation of our protected information and ensure that the safeguards which you have very rightly provided in the bill are not bypassed?

Mr. Roy Cullen: I'm sorry, but I'm going to answer you in English.

[English]

First of all, the kind of information that would be shared would be subject to the same kind of rigour. Only high-level information would be shared, but it would be governed by a protocol with every individual country. It's really only in the area of the police investigation, where there's obviously cooperation through INTERPOL and other agencies, that the law and the standards of subpoena of information, etc., would apply.

In terms of sharing information with other countries, there would be protocols established and the privacy and confidentiality of information would be respected. It would only be at the first blush, at the agency level... the high-level information that would mark the types of activities in a very general sense.

Is that fair enough?

[Translation]

Mr. Richard Lalonde: I would simply add that any exchange of information with other entities similar to our Centre would be governed by protocols as provided in the bill. These would concern not only the exchange of information, but they would also restrict the use of that information by the other country.

Mr. Richard Marceau: In what section can the provisions regarding the protocols be found? Is it section 56?

• 0935

My question is: Do you think the bill would be improved, if we want to have an additional safeguard, by adding to that section a provision to the effect that any such protocol should by all means respect the Canadian legislation regarding privacy or access to information?

I had a quick look at those three subclauses and I have seen no mention that such agreements must be governed by the same rules or conditions which have been provided in Canada with regards to protections.

The Chairman: Mr. Carrière.

Mr. Yvon Carrière (Counsel, Transition Team, Financial Transactions and Reports Analysis Centre of Canada, Department of Finance): Every country has its own legal system. In the United States, for example, police have direct access to the database which contains information about suspicious transactions. Of course, if we were to impose Canadian standards, just no information could be transmitted from Canada to the United States.

In some other countries, like Belgium, it is for judges to decide what can be made public or not. Again, in the Canadian context, magistrates are not allowed to decide whether information should be disclosed or not. Therefore, I believe that it would be like trying to impose our own standards to completely different judicial systems.

Mr. Richard Marceau: I agree with you. I understand your views, but it brings me back to my first point. You are saying that in the United States—and that frightens me a bit—, any policemen can access that database. If, for example, the House ruled that for a certain transaction, Richard Marceau is suspected of having committed a money laundering offence—and we will come back later on the nature of such suspicion—and if such a protocol had been concluded between Canada and the United States, it seems to me that, given the tremendous number of policemen in the United States, many people could then access information which is extremely personal to me.

So, there is a danger that we be brought to do through the back door what we are not allowed to do through the front door, that is to give access to very personal information, to things that should only be known by very few people. With such a bill, we are already intruding the private life of individuals, and we accept it because the problem we want to combat is serious. On the other hand, if you are telling me that police forces in the United States are also going to be allowed to intrude into our private life, that means a lot of people. There might be more policemen in the United States than there are citizens in many countries.

Mr. Yvon Carrière: I would like to make it clear that the Centre would be entitled to disclose information to another country only where there are reasonable grounds to suspect that such information would be useful for investigation or prosecution purposes regarding offences related to money laundering. So it comes to saying that there is in all cases a basic condition which has to be met: there must be suspicions.

Second, it will apply only to information which is designated or defined in the law, that is the client's name, the amount of the transaction and the site where the operation took place. Even then, protocols might include conditions which would limit the use of such information. Each protocol might have its own proceedings. I am sure that we will show a great deal of discrimination in deciding which countries we are going to conclude agreements with.

Mr. Richard Marceau: I would have some additional questions, Mr. Chairman, though I know that time goes by.

You mentioned which criteria should be used in order to determine what can be considered as reasonable grounds to suspect money laundering. Now, nowhere in the law those criteria are defined. Furthermore, there is no provision in the law concerning the making of regulations which would establish which criteria are going to be applied to determine what constitutes a reasonable ground. It seems to me that the Centre will hold an extensive discretionary power. I believe it should rather fall to the legislative power if not to the governments to define what are the reasonable grounds, rather than to an agency which is not accountable to the government. I would like to know your opinion on that.

[English]

Mr. Roy Cullen: Mr. Marceau, don't forget, what we're talking about here is a different... The comparable agencies in other countries, who, only on the basis that there are grounds for suspicion that there is a money-laundering activity being undertaken...

That is defined right now to some extent in the guidelines already being used, and it perhaps will be expanded upon with the regulations that go with this bill.

• 0940

So only certain high-level information would be shared if there's a suspicion of a money-laundering activity. There will be protocols. Also, these agencies have to work with each other in order to make our mutual efforts more effective. There has to be a certain community of effort here that respects the individual laws and privacy concerns of each individual country. Those would be incorporated into the protocols that are developed.

[Translation]

Mr. Richard Marceau: I was rather talking about the criteria which are going to be used to determine the reasonable grounds to suspect that there is money laundering activity. That is not defined in the bill. Nowhere in the law it is said that it will be incumbent upon the government to define such criteria by virtue of its regulatory power. So I assume that it is left to the discretion of the Centre itself. We are going to give the Centre the discretionary power to decide what are going to be those reasonable grounds. Does it not seem to you somewhat extensive as a power?

[English]

Mr. Horst Intscher (Executive Director, Transition Team, Financial Transactions and Reports Analysis Centre of Canada, Financial Sector Policy Branch, Department of Finance): If I may, I will perhaps offer a bit of explanation. First of all, the initial determination as to a suspicion will be made by the reporting entity when a suspicious transaction is reported. They will judge that, really, in the context of their own business: transactions that are sufficiently out of the ordinary that they cause the reporting entity—for example, a bank or a trust company—to believe that the transaction might be suspicious in regard to money laundering.

In terms of the centre making its determination, it will to some extent depend on the individual case. Again, depending on the information that has been reported by reporting entities and information received from other entities, it will make a judgment to assist reporting entities in making a judgment as to whether or not a transaction is suspicious.

The centre will be issuing guidelines from time to time that describe types of transactions that are specific to the banking industry or specific to credit unions, to casinos, or to other kinds of money service businesses, transactions that have been found to be related to money laundering in other cases or in other jurisdictions. So it is done as a means of helping reporting entities form a view as to whether a particular transaction gives rise to suspicion and should be reported to the centre.

Mr. Roy Cullen: If I could add something to Mr. Marceau's points, right now there are guidelines that are in play on a voluntary basis. These to some extent define or give examples of suspicious transactions and provide some guidelines. One of the challenges, of course, is that in financial intermediaries the activities or the way they go about things are changing all the time, so we need some flexibility. But it's not as though this is a blank page. There are already guidelines and these are going to be modified and expanded with this current bill.

Mr. Stan Cohen (Senior Counsel, Human Rights Law Section, Department of Justice): If I could just add a word on the matter of the meaning to be attributed to the phrase “reasonable suspicion”, there is a Charter of Rights overlay on the whole of this exercise. These grounds that have been identified—“reasonable grounds to suspect”—are grounds that have a meaning within decided case law.

It admittedly is not as high a standard as “reasonable and probable grounds”, but the Supreme Court of Canada has endorsed a meaning that basically requires that in order for a reasonable suspicion to exist there must be—and I'm quoting here—“a constellation of objectively discernible facts which give the detaining officer reasonable cause to suspect that”, in this case, “the detainee is criminally implicated in the activity under investigation”. It goes on to say that importantly, “a hunch based on intuition gained by experience cannot suffice”, no matter how accurate that hunch may prove to be.

So what we're looking for, and what the case law insists upon—and ultimately this might shake down in any litigation ever brought involving this—is something that is based upon objective criteria that will have to be established. They would look to criteria that are developed through regulations, guidelines, etc. So it's not a totally arbitrary standard that has been established here, nor is it a standard that is without any meaning within jurisprudence.

• 0945

Mr. Roy Cullen: While the agency is quite independent of the minister, if the centre is getting out of line with what he or she views as the best interest of the public, then the minister does have the power under the bill to step in and review it from a policy point of view and to chart a new course.

The Chair: Thank you, Mr. Marceau.

Mr. Nystrom.

Mr. Lorne Nystrom (Regina—Qu'Appelle, NDP): Thank you very much, Mr. Chair.

I'd like to welcome everybody here this morning.

As we said in the House, the New Democratic Party is in support of the legislation. This brings us up to par with other countries around the world in the OECD.

I want to ask a couple of questions along the same lines as those of my colleagues here. First, perhaps you could give us a bit more information as to how suspicious transactions would be defined in regulations. These are very tough questions. I don't expect you to have the precise answer for that, but perhaps you could give a bit more information as to how this definition will be made in terms of regulations. It's not of course part of the bill, but it will be part of the law. If you could shed a bit more information on that, it might be helpful.

Mr. Richard Lalonde: As we indicated a little earlier, there is no definition in the legislation of what constitutes a suspicious transaction.

Of course, the legislation does provide for two kinds of reporting of financial transactions. One is the reporting of prescribed transactions, and it can be those above a certain threshold or certain kinds of very objective transactions. The second kind is the reporting of suspicious transactions. As we've indicated, the approach taken by many other jurisdictions, including the United Kingdom, is simply to provide guidance through guidelines to financial intermediaries on things they should consider in coming to a determination of what is or is not suspicious, and that is the approach we intend to take.

Mr. Roy Cullen: Mr. Nystrom, I have a list here of maybe 12 examples of suspicious transactions under the guidelines that are currently in use, examples where cash is involved or bank or trust company accounts are involved, unusual large cash deposits made by an individual company that would normally not generate that kind of cash, customers whose deposits contain counterfeit notes or forged instruments, etc. There are about a dozen of those, which we could go over if you'd like. They will evolve and change as money launderers and financial intermediaries become more creative and more inventive.

Mr. Lorne Nystrom: I assume the guidelines will be similar to those of the other OECD countries.

Mr. Roy Cullen: Yes.

Mr. Lorne Nystrom: In terms of privacy, this bill would permit the centre to turn over relevant information on tax offences to Revenue Canada, and again there could be a threat to privacy in certain circumstances. Can you add anything to what you've already said in terms of what the guidelines might be with regard to turning over tax information to Revenue Canada?

Mr. Roy Cullen: I'll just make a general point. The focus of the bill is money laundering. If money laundering is involved, probably tax evasion is involved. But the reverse is not necessarily true. If there's a suspicion of money laundering and at the same time a suspicion of tax evasion, that information could be passed simultaneously through the revenue agency and the police, if there was a joint suspicion. At that point there would be a coordinated effort between the police agencies and the revenue agency.

It seems to me that the first priority would be to look at the money-laundering activities, and it would be a coordinated effort between the police and the revenue agency. But the primary focus—I need to emphasize that point—is on money laundering and money-laundering activities.

• 0950

Richard, would you like to expand on that?

Mr. Richard Lalonde: I think you've been quite complete on that one. The initial thing is that there has to be a reasonable suspicion by the centre that money laundering is occurring before any information can flow to any authority other than the law enforcement body. The other thing to remember is that in including these additional organizations as possible recipients of information, it's in recognition that they do of course play a role in combating organized crime in Canada, and that is the focus here.

Mr. Lorne Nystrom: I have another question, Mr. Chair. Maybe I'm wrong on this or a bit naive, but I don't think the bill addresses things such as credit card or debit card fraud. If I'm right on that, why doesn't it address those areas? Is this not an area where money could be laundered?

Mr. Richard Lalonde: You're absolutely right, these are areas where money can be laundered. This bill does target the laundering of the proceeds of credit card fraud, along with the proceeds of other enterprise crimes that are defined in the Criminal Code, as well as designated drug offences. So it does target these particular crimes.

Mr. Lorne Nystrom: I have one last question. Going back to Mr. Abbott's question about why a centre instead of an existing agency, do all the other countries that have similar legislation have centres that administer it independently, or do some use their national police, such as the RCMP in this country? We're not unique in that, I assume.

Mr. Richard Lalonde: There are different models around the world. Some do indeed have their law enforcement agencies involved, but more often than not these are newly created independent agencies. They can be an arm of an existing financial services regulator, or they can be a stand-alone. Their powers will differ from country to country, and so will their mandates. But they all have a responsibility to channel, if you want, information to law enforcement.

Mr. Roy Cullen: The idea behind that, Mr. Nystrom, is to make sure there's not an overzealous pursuit of suspicions, that there's a first vetting at the deposit-taking or money-receiving level in terms of suspicious transactions or transactions that by regulation will be required to be reported. Then there's a further vetting at the agency level where they're using other information and other patterns. At that point, if there's another suspicion of money laundering, only then would it be referred to the police. If the police then aggregate that with their information and want more information, they'd actually have to go to a court and get a subpoena to get some detailed information.

Mr. Lorne Nystrom: Thank you.

The Chair: Maybe to go a little bit outside of the bill itself, whenever a piece of legislation like this is placed in front of the Canadian people, of course there are resources that are required to implement the bill itself, the law. Based on our prebudget consultation hearings, the RCMP and all the other law enforcement agencies require much more money.

I think this bill is long overdue, and it's great that we're moving on this and at least getting to the same level as some of our counterparts. But while in theory this is a great bill, what type of commitment has the government made to make sure this can actually become reality?

Mr. Roy Cullen: Thank you, Mr. Chairman.

In budget 2000 additional resources were committed to the RCMP, and about $5 million of that is to complement their existing anti-money-laundering activities. With regard to the centre itself, estimates are being pulled together on the cost of supporting such a centre. It's early days, but it looks as if it's in the vicinity of $10 million to $15 million a year, something in that order of magnitude.

Again, if one wants to deal with this very serious issue of drug money increasingly being laundered through our country and if we want to respect the privacy concerns of Canadians, sometimes you don't have many options. But you're point is well taken. Resources are scarce. But in budget 2000 there were additional resources allocated to the RCMP for activities related to this.

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The Chair: Yes, but let's be frank with one another here. From the background notes that I have here, it says that money laundering is a serious criminal offence entailing the illegal movement of funds estimated between $5 billion to $17 billion in and through Canada each year. Now we're going to combat that with an additional $5 million. I'm just wondering—and perhaps this is the wrong place to ask the question, I'm not sure—if we really want to implement this, shouldn't we be giving the law enforcement agencies or the centre real money to address the issue?

Mr. Roy Cullen: First of all, the additional money for the RCMP is complementing some of their existing resources. As to whether that's enough, whether $10 million to $15 million is sufficient for the new centre, how much is enough? Your point is taken. As we get into this and the patterns are identified, we may find there is more money laundering than we're happy with, and it may mean that more resources need to be applied to it. I would think that at this point the government's probably reasonably confident that we've initially assigned or will assign the required resources to get it launched, but it will be constantly and continuously monitored.

We have Mr. Deacon up from the RCMP.

Mr. Jamie Deacon (Director, Anti-Organized Crime Division, Ministry of the Solicitor General of Canada): Mr. Chairman, I would just add on the point of resources that in 1997 the government approved resources to establish 13 integrated proceeds-of-crime units in the RCMP. They're located in major centres across the country. They're managed by the RCMP, but they include provincial and local police, CCRA personnel, and crown counsel and forensic accountants to deal with complex money-laundering cases. So there have been, as well as the more recent investments that Mr. Cullen mentioned, earlier investments in money-laundering enforcement, and the arrangements in Bill C-22 will very much support the activities of those units and make them more efficient.

The Chair: So you're happy with the amount of money?

Mr. Jamie Deacon: I wouldn't want to comment on that specifically. I simply note that there have been investments to date.

Mr. Roy Cullen: Have you a better number?

The Chair: I'm not saying I have a better number, but if it's in fact organized crime, and it's $5 billion to $17 billion, yes, I have a question. I don't think $10 million is a lot of money to seriously look at this particular issue. I may be proven wrong, but I think if you're in fact dealing with $17 billion, you'll need a lot more resources than that.

Mr. Szabo.

Mr. Paul Szabo (Mississauga South, Lib.): I have a couple of general questions.

The Canadian Institute of Chartered Accountants, for instance, are going to be in a position where their members will have to go out and look at the books and records of companies, and they're going to find themselves having to ask these questions or look at what obligations they have. Have they had any problems with the proposed approach to dealing with this, in terms of what additional burdens or requirements it may place on their profession?

Mr. Roy Cullen: I think, Mr. Szabo, we have had some representation. Maybe Mr. Lalonde would comment on that, or Charles.

Mr. Richard Lalonde: Sure.

We've had occasion to speak with both the Canadian Institute of Chartered Accountants and the Certified General Accountants' Association of Canada regarding the bill, the proposed regulations, and I think we were able to reassure them in part that we are looking to cover them insofar as they are acting as financial intermediaries—in other words, insofar as they are involved in financial transactions on behalf of their clients.

The accountants did raise the issue of their auditing function and the possibility that they might be put in conflict with their clients if they had to report information to the centre that they have gathered as a result of the auditing function. What we have indicated to them is that the regulations will indicate very clearly that the reporting obligations will not apply to the auditing functions of the accounting profession.

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Mr. Paul Szabo: That's a good point, because I think even with regard to charities, for some of their activities they can't possibly give full assurance, and I was wondering whether something like this would lead to an automatic qualification of statements simply on the basis that they would have no basis for making that acclaimed opinion without... There's just no way to do it.

It's estimated that about 70% of laundered money is related to drug trafficking. I'm wondering how much collaboration or coordination has to occur with offshore jurisdictions if this is really going to work.

Mr. Roy Cullen: First of all, the primary focus is money laundering. As we've said before, there is cooperation internationally, and any suspicious transactions will be covered by the act.

Horst, did you have anything to add?

Mr. Paul Szabo: Have we had discussions with our counterparts in other countries about the approach to this problem, and is what we are proposing to do compatible with the facilities or the cooperation that might be available abroad?

Mr. Richard Lalonde: Absolutely. There have been ongoing discussions for over a decade on the issue of international cooperation to combat money laundering. They originated with the G-7 countries, and in fact discussions among G-7 countries continue today on precisely those issues and how to improve cooperation. The FATF, the Financial Action Task Force, was set up to collaborate and develop international standards, and part of those standards deal with international cooperation.

There is another international body that has been formed since the Financial Action Task Force. This is a body that brings in all of the agencies responsible for money laundering, such as our centre here, and they discuss issues of cooperation as well. So this issue is at the forefront of the international agenda.

Mr. Paul Szabo: I have one last question. The estimates of the size of lost revenue resulting from trafficking and laundering money seem to be small relative to the estimates people use with regard to the underground economy in general. While I can understand that there would be a smaller number of incidents of money laundering than there would be generally in terms of underground economic activity, is the plan over the longer term in fact to broaden, let's say, the function of this new agency to deal with the broader question of the underground economy?

Mr. Roy Cullen: Maybe I could start with that one.

First of all, as I said earlier, the intent of this bill is to deal with money laundering, and tax evasion is a secondary issue. If you have money laundering, you undoubtedly have tax evasion, but the reverse is not necessarily true. So the focus of this is money laundering. Only to the extent that money laundering is related to underground activities, it would be a subsidiary kind of effort.

But I'd like to come back to your earlier point about offshore havens, for example. In fact, we had a discussion on this issue in which Mr. Intscher told me the story about how money going out of the country, for example, will be very cloaked and guarded, and clearly there will be a lot of tax evasion attached to it. But let's say it goes to a low-tax or no-tax haven. When it comes back in, they'll want to make sure all the rules are complied with, so all the tax rules will be complied with in the form of a dividend or whatever it is.

As you can understand, Mr. Szabo, with the way these deals are constructed through intermediaries, nominees, and shell companies, it is a challenge. But many of the transactions are in the millions and multi-millions of dollars as well, which makes it simpler in one sense but more complicated in another.

Mr. Paul Szabo: Thank you.

The Chair: Are there any further questions? Mr. Abbott.

Mr. Jim Abbott: I'd like to follow up on what Mr. Bevilacqua was asking. Perhaps I have a slightly different angle compared to where he was coming from.

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On exactly the same issue, I find it troublesome that the figure of $5 billion to $17 billion is used. That isn't exactly precise. Then, in response to the questioning of the chairman, we hear you may have to add more resources. Again, that's kind of a blank cheque.

With respect, Mr. Cullen, you've said the government has done a lot of consultation, and that this is the reason it has taken two years to get to this point, and all the rest of that kind of thing. When there are agencies in the world that are comparable to what we're setting up right now, and ones that have a track record, help me to understand why the government can't give a straight answer.

I'm sorry. Let me rephrase that.

Help me to understand why the government is incapable of giving an accurate answer to the finance committee about where we are going in terms of dollars and cents in order to be able to fund this. Why should we not believe that in fact the government doesn't know where it's going as far as the funding is concerned?

Mr. Roy Cullen: First of all, I think we do know where we're going. I said money in budget 2000 was allocated to the RCMP in addition to earlier money, as Mr. Deacon pointed out. The budget for the centre will be in the vicinity of $10 million to $15 million. The estimate for the extent of money laundering in Canada is not terribly accurate because we don't really know how much money laundering is in fact going on in Canada. We have our own suspicions that there is a lot more than we're comfortable with.

The Chair: Is that based on a hunch?

Mr. Roy Cullen: It's based on a hunch, yes. As the centre is developed and put in place and we get better at it, we'll be making assessments as we go. But to launch the centre, I think we're in pretty good shape.

Maybe Richard or Mr. Intscher could expand on that.

Mr. Horst Intscher: In terms of the appropriate size and resource level for the centre, we've looked at a number of other agencies that have a similar mandate. It's difficult to compare them, because all of the agencies have differing mandates and different ways of performing their functions. In some cases, many of the analytic functions that this centre will be performing are located outside or are conducted partially outside. In some cases, the disclosure regime is very light because there are lower privacy concerns than we have.

Given the nature of our mandate and the relationship that we are required to have under this bill with other agencies that would receive our information, we are fairly confident that we can establish an appropriate analytic capacity in the range of somewhere between $10 million or $15 million per year. The transition team is working on this as a matter of considerable priority. It is trying to work out what the systems requirements are to process this kind of data, and what kind of analytic capacity needs to be put in place. Within a few months, we hope to be able to give considerably more precision than we are able to now.

Mr. Jim Abbott: But let's take off a bunch of zeros from the $10 million to $15 million—and I don't find a lot of comfort in those figures, even with that range. You have a basement and you've just finished working in the basement of your home. Somebody comes along and says they'll do the flooring and they'll put down a rug for you for somewhere between $1,000 and $1,500, more or less, and they hope they're right. How comfortable would you feel in signing a work order like that? This is effectively what you're asking.

If you're not asking the government, you're certainly asking the opposition to say everything's fine, and that you think it's going to be here but it might be there. Shouldn't Parliament be apprised of something with more precision and accuracy than what you think, hope and like, or something that's going to be in a range suffering a 50% variance and “Oh, by the way, it might be more”? This really isn't all that terrific, is it?

Mr. Roy Cullen: Well, Mr. Abbott, the department right now is consulting with all the stakeholder groups to develop the guidelines more fully and to set in place the reporting mechanisms and reporting requirements. Over the next few months, as Mr. Intscher said, we'll have a more precise figure in terms of the budget levels that will be required for the new centre. I apologize, but we don't have that precision right now.

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Mr. Jim Abbott: Can we hope that prior to this going back to the House for third reading, when we are going to be asked to vote on this, we will have far more precise numbers that we can hold the government accountable for? Right now the government is not being held accountable with this very broad range of numbers you're providing to us.

Mr. Roy Cullen: Depending on the timing and when we come back, I will provide whatever information I can in terms of a clear definition of costs. We'll probably have the operating costs nailed down, but in terms of the information technology infrastructure, I'm not sure if we'll have it at that time. It depends on when it comes back. I'll certainly be willing to share whatever information we have at that time.

Mr. Jim Abbott: Thank you.

The Chair: Isn't the real answer that we have to start somewhere? You need to have a base of resources to start, and then they will either go up or down, depending on the requirements placed upon the agency or others.

I guess this is an amount of money you think is more or less reasonable to start with, but it may actually go up, or if there isn't much business, it'll go down.

Mr. Jim Abbott: May I suggest it'll take about a month to get a renovation project done on your basement?

Mr. Roy Cullen: Your point is well taken. We don't have a mandatory reporting regime now. This is a whole new ball game, so we'll be developing the accuracy in more detail in the next few months. This committee will also have more consultations. It might provide some advice that could change their resourcing requirements.

With respect to that process, we don't want to come out with a finite budget and then go through the charade of a process. Some policy issues may be raised that need some attention. The budget of the centre will obviously come back to Parliament and this committee.

The Chair: Fair enough.

Mr. Marceau, followed by Ms. Leung. They will be the two final questioners.

[Translation]

Mr. Richard Marceau: Mr. Cullen, could you or could one of your colleagues tell me whether the transaction reporting requirements provided in bill C-22 are going to result into additional costs for individuals and entities which are going to be subject to them? Would there be some way of ensuring that the costs, actual or alleged, which the banking system will have to meet won't be passed on to each one of us as clients?

In other words, since banking fees are already quite high, could we make sure that the costs which are going to result from those new requirements will not be passed on by the banks to their customers, so that, at the end of the day, everyone of us will not have to pay higher fees because of the implementation of those new measures?

[English]

Mr. Roy Cullen: Right now the banks and most financial institutions are doing this on a voluntary basis. The costs of their training, the internal collection of information, and internal reporting are already being borne by the banks. There'll probably be an additional burden. We don't see it as being that significant, but it will be the banks' cost burden. With their massive profits, I'm sure they'll have no difficulty absorbing that. We can't really deal with that through this act.

Does anyone else wish to expand on that?

Ms. Sophia Leung (Vancouver Kingsway, Lib.): Assuming you confiscate laundered money, will the proceeds go to general revenue or to the centre? That's assuming you have some income.

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Mr. Yvon Carrière: The act provides that any money that's confiscated constitutes proceeds of crime and is therefore treated as proceeds of crime. There's the Seized Property Management Act, which provides for possible sharing between levels of government or foreign governments, if they have participated in the actual confiscation. Of course, none of that money goes to the centre directly or indirectly, except through the general revenue and the budget process.

Mr. Roy Cullen: It goes to the parliamentary secretary.

Ms. Sophia Leung: I thought it went to Parliament.

Voices: Oh, oh!

The Chair: Mr. Saint-Denis.

Mr. Paul Saint-Denis (Senior Counsel, Criminal Law Policy Section, Department of Justice): I have an additional point. The Seized Property Management Act to which my colleague referred contains a provision that created a proceeds-of-crime account as part of the general consolidated revenue. So all of the proceeds that are confiscated eventually end up in that proceeds-of-crime account. After that, there is a partitioning. Some of the money is shared with people who have contributed to the investigation or the prosecution and some of that money is then returned to the government, to the general account.

Ms. Sophia Leung: Thank you.

The Chair: Mr. Pillitteri.

Mr. Gary Pillitteri (Niagara Falls, Lib.): Thank you very much, Mr. Chairman.

I had a question on confiscation of property that was answered. I represent Niagara Falls and I think I'm not immune to knowing what laundering is. Of course, nowadays it's money laundering and we're looking at many ways. The number one principle is with the narcotics. Are we going to be confiscating laundered money that comes from narcotics? Do we appraise that as being the property of the government in using that? Are we condoning in any way that the agency will have the power to use some of this money, knowing where it comes from?

Mr. Roy Cullen: I want to answer that just before I turn to Mr. Carrière on the question of the proceeds of crime.

In terms of the money coming across the border through Canada Customs, let's say, there will be a mandatory reporting requirement. If you're coming across with $15,000 in cash or some monetary instruments, you'll be required to declare that. If you don't and it's discovered in your luggage or in your car or something, if it's over the reported amount, as I understand it that will be seized.

A person could make a case later that the money was not from the proceeds of crime or was not laundered money. If they're successful in making that case, I believe the money is returned. Otherwise it's confiscated. I suspect the same rules that apply to the proceeds of crime that Mr. Carrière described would apply.

Mr. Gary Pillitteri: I'd like to follow up on that. Living in a cross-border community, we're crossing back and forth. We're not asking the people crossing and coming over to Canada or vice versa how much money they have with them. People are not asked whether they are carrying any cash, any money. I don't think we're looking to more open borders. As a matter of fact, I'm going to a conference tonight called “More Open Borders: A New Smart Way to do Customs and Immigration”.

Do we intend to make it more mandatory to ask certain questions? Here we are; we're trying to get the Americans to remove section 110 from the Immigration Act so that we don't have the lineups across the borders. Now I'm being told that one of the questions that could be asked is how much they're bringing across. If we're trying to have more of an open border, a more open community with the Americans...

Mr. Roy Cullen: Mr. Pillitteri, as I mentioned at the outset, one of the great advantages with Canada and the United States is this open border. By the same token, it creates other challenges. At this moment, for example, I understand that in the United States you have to declare if you're bringing in any cash or monetary instruments.

The bottom line is that this act, this law and the regulations that accompany it, will make it mandatory to report if you are carrying with you on your person around $15,000—the level hasn't been firmly established yet, but let's say around $15,000—because people could be moving laundered money into Canada and we want to stop that.

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Mr. Gary Pillitteri: As I understand it, I think it's anything above $10,000 right now that one has to report, and this becomes recorded after $10,000.

Mr. Roy Cullen: That's U.S. dollars.

Mr. Gary Pillitteri: U.S. dollars, that is.

But I'm kind of worried, because I have Niagara Falls and casinos, one casino and now a larger one coming on, and today some business people travel with much more than that. I wonder if, instead of expanding and opening up the borders and making it more feasible for people to travel across the country, something like this is not really hindering that.

I've just come back from Europe, and this has gone by the wayside in Europe in crossing borders within the European Common Market. What are we coming up with? Is this archaic legislation going backwards rather than going forwards?

Mr. Roy Cullen: I'm not sure it's archaic; I think we're coming into conformity with other countries. But regarding the EU, it has become one big area.

Mr. Lalonde, do you want to expand or comment on that?

Mr. Richard Lalonde: Sure.

The justification, of course, is that in strengthening our domestic regime with mandatory reporting, having plugged that hole, we simply do not want to push the problem to the border and have money laundered down in the United States. So it becomes incumbent upon us to introduce a cross-border declaration regime.

It is very much like in the United States as well. It's not designed to impede the free flow of capital, and certainly we don't want to do that. This regime has been designed not to do that. It's very much like the regime we now have for the crossing of goods across the Canadian border, whereby Canadians and others must declare goods entering into Canada.

It may be as simple as ticking an additional box as to whether or not you are carrying currency and monetary instruments above a certain threshold. The threshold we have in mind, as Mr. Cullen has indicated or is proposing, is $15,000 Canadian, which is roughly equivalent to the American threshold.

Down the road, there may be some cost savings we can achieve by cooperating at the land border crossings with the United States. As they're already collecting this information, perhaps there are some synergies here that we can obtain, ergo the reason we're proposing this kind of threshold.

Mr. Roy Cullen: But I think too, Mr. Pillitteri, the threshold is fairly high. I know there are some wheeling-and-dealing gamblers, but let's say it's $15,000. And maybe the officials could clarify this. If it's over $15,000, if $15,000 is the number that's settled on, they will be required to report it. If they report it—maybe the officials could answer this—if it is someone who's bringing money across to go to a casino, what circumstances would apply then if they were able to convince a customs officer that they were going across to the casino to gamble with $15,000?

Mr. Yvon Carrière: I just want to state that there's no prohibition against carrying more than $15,000. All there is, is a form on which you report the fact that you are crossing the border with $15,000. Once that's done, there's absolutely no further requirement or limit.

Mr. Roy Cullen: The problem develops if a person is carrying more than $15,000 and they don't tick a box on the form. If they say they're carrying more than $15,000—correct me if I'm wrong—that's all that happens. That transaction is then reported to the centre, is it not? But as far as—

Mr. Gary Pillitteri: Mr. Cullen, with all due respect, I would like to get rid of those papers with the boxes on them. That's what I'm intending. That's where the rest of the world's going, and that's what my intent is, to see it go that route.

Any time one carries money from one country to another, as soon as he has to enter an amount and check off a box, all of a sudden he becomes a suspect, he becomes someone you have to look at. You become a number of an investigative block—

Mr. Roy Cullen: Yes, but not really, because it would be mandatory reporting, but if it comes to the centre and there's no suspicion of money laundering, that would be where it dies.

Mr. Carrière, would you like to expand on that?

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Mr. Yvon Carrière: Yes, on perhaps two things.

First, the centre will favour electronic reporting as much as possible. There might be a way to work in some type of electronic reporting in certain cases and certain circumstances.

I also would point out that the act does provide for authority to enter into agreements with governments of foreign countries for the exchange of information in certain cases, which might avoid having to make two reports—one when you're leaving Canada and one when you're entering the U.S., for example. That way we would reduce the paper burden we're alluding to.

The Chair: Thank you, Mr. Pillitteri.

Mr. Cullen and officials, on behalf of the committee, I'd like to thank you very much. Of course, if we need further help you may be called back to clarify some points. We'll be needing your help during clause-by-clause, so we look forward to seeing you again.

Again, I apologize for the room, but there isn't much we can do about that.

Have a good day.

The meeting is adjourned.