Duhaime's Financial Crime & Anti-Money Laundering Law in Canada

1. New Anti-Terrorism Act, 2015

The Government of Canada introduced its anticipated anti-terrorism legislation in Parliament. Bill C-51, entitled “An Act to Enact the Security of Canada Information Sharing Act and the Secure Air Travel Act” (the “Anti-Terrorism Act, 2015“) which is intended to arm the government with broader powers to address the increasing threat of terrorism in this country from homegrown terrorists and abroad, mainly as a result of the rise of the Islamic State (“ISIS“) and recent resurgence of al Qaeda. The purpose of the Anti-Terrorism Act, 2015, is to ensure Canada is not used as a conduit for international terrorism.

In a nutshell, it:

• Authorizes CSIS to stop threats to Canada in foreign countries;
• Permits the judicial management of a person suspected of being a terrorist including geographic restrictions on their movements;
• Requires that persons and entities that have electronic custody of terrorist propaganda published online disclose the identity and location of persons who posted the propaganda;
• Makes it a criminal offence to publish terrorist propaganda;
• Requires that the private sector (air carriers) deny air passage to suspected Canadian terrorists at the direction of the government;
• Requires the creation of a secret list of suspected terrorists for the purposes of the no-fly list that the private sector will enforce; and
• Permits the sharing of information among federal agencies to detect activities that undermine the safety of Canada.

2. Information Sharing Act

The Anti-Terrorism Act, 2015, enacts a new law to authorize and facilitate the sharing of information among government agencies in situations where there is “activity that undermines the security” of Canada or the lives or security of Canadians.

“Activities that Undermine Security”

The definition of activities that undermine the security of Canada is important because everything in relation to information-sharing for counter-terrorism efforts is pinned to it.

Activity that undermines Canada, and ergo, authorizes the sharing of information, arises in the following situations:

• Interfering with the capability of Canada to undertake intelligence-gathering, defence, justice administration, economic stability or financial stability. This could apply to any terrorism activity or cyber-hacking activities that involve the foregoing. If you hack a major bank, or a Court or Court records, that may interfere with financial stability or the administration of justice.
• Unduly influencing a government agency in Canada by force or unlawfully.
• Covert foreign-influenced activities.
• Terrorism.
• Proliferating WMD.
• Critical infrastructure interference. This is a key one that is important given that terrorists specifically target critical infrastructure such as energy, electricity, Internet, water supply, government buildings.
• Global infrastructure interference. This means basically our electronic communications (emails, texts, telephone calls or social media communications) carried on through networks that extend beyond Canada.
• Activities in Canada that undermine the security of another state. This applies to all the homegrown terrorists in Canada that work for, support or propagandize for organizations like ISIS or al Qaeda, including sending funds or material support to terrorist organizations. It also applies to social media publications in support of terrorist organizations, or that are terrorist propaganda. See the new terrorist propaganda offence, below, and note that there is a tie in with that new offence and the sharing of information.

Information Sharing

Certain federal government agencies are allowed to share information in respect of any person or entity to other federal agencies when there are “activities that undermine the security of Canada.”

The broadness of the circumstances permitting disclosure, above, should not be discounted. Moreover, disclosure of such information is authorized to “detect” activities that undermine the security of Canada, and to prevent, investigate or disrupt such potential threatening activities.

The authorization of disclosure for detection purposes is important because the impugned conduct has not yet occurred. In other words, no terrorist conduct must necessarily have occurred that undermines the security of Canada since disclosure is permitted to detect it.

The agencies that may share information include but are not limited to the CBSA, RCMP, FINTRAC, National Defence, Health Canada, Department of Finance, CIC, CSIS, CRA and Canadian Armed Forces.

3. Secure Air Travel Act

Secret List of Potential Terrorists For Airlines

The Anti-Terrorism Act, 2015 enacts another new law that allows the government to create a secret list of persons that it believes may, inter alia: engage in an act that threatens transportation security; participate in the activities of a terrorist group; fund a terrorist group or a terrorist; or provide material support or property to such a person or group.

No Re-Entry to Canada

The purpose of the list is to identify persons in Canada (or outside of it) that are a threat to national security and to require that air carriers prevent such a person from boarding an aircraft, or require that they be screened before entering an air carrier or an airport. The blocking of a person applies in and outside of Canada.

A person denied entry to fly out of or into Canada may apply for removal from the list within 60 days and they can appeal an unfavorable result.

4. Criminal Code

Terrorist Propaganda

The Anti-Terrorism Act, 2015, also amends the terrorist provisions in the Criminal Code of Canada, R.S.C., 1985, c. C-46 (the “Criminal Code“), by making it an offence to make statements, or communicate statements that advocate or promote, inter alia, terrorist acts, terrorist financing, or providing material support or property to a terrorist or terrorist group knowing that a terrorist offence will result or being reckless as to whether it results.

The amendments also authorize the seizure of terrorist propaganda in hard copies. If there is terrorist propaganda published online, a court may require that an electronic copy of the material be provided to the court, order its removal from the Internet and order that the custodian of the propaganda disclose the identity and location of the person who posted the propaganda. This would apply not just to ISPs but anyone who is publishing terrorist propaganda.

Monitoring & House Arrest of Suspected Terrorists

The Criminal Code will also be amended to permit special procedures for persons who are likely to commit a terrorist offence, including terrorist financing. Such a person may be ordered to enter into a recognizance to keep the peace for up to 12 months. They may also be ordered to participate in a counter-terrorism program, wear an electronic monitoring bracelet, be under house-arrest for certain hours each day, surrender his or her passport, and be geographically restricted.

5.  CSIS Act

The Canadian Security Intelligence Service Act, R.S.C., 1985, c. C-23 (“CSIS Act“) will also be amended to authorize CSIS to reduce threats inside or outside of Canada if it has reasonable grounds to believe an activity threatens the security of Canada.

Determining the gravity of the threat to national security posed by a defector attempting to return to Canada is an example where it requires that CSIS be in terrorist hot spots. Such investigations, to be effective, require that CSIS be overseas.