(February 21 – 14:40 ET) – A survey of Canadian financial organization conducted by Deloitte & Touche released today showed only 43% had policies and procedures in place to comply with the Proceeds of Crime (Money Laundering) Act. The Solicitor General estimates the money laundering problem in Canada to be valued at as much as $17 billion each year.

“The results of the survey show there is still much work to be done in combating this kind of crime,” said Ross Oake, vice president, Forensic & Investigative Services, Deloitte & Touche. “While most organizations feel they can identify suspicious transactions (72% extremely or very confident) only 49% of those surveyed have fully reviewed the new legislation which specifies suspicious transactions and the legal onus placed upon financial organizations.”

The survey, which looked at banks, insurance companies, asset managers, securities brokers and other deposit taking institutions, showed that 94% of those surveyed felt their institution had not been used to launder money in the past 12 months. However, the International Monetary Fund estimates that funds equivalent to between 2% and 5% of Canada’s GDP is being laundered each year.

With the deadline for compliance quickly approaching, only 24% of those companies surveyed had completed an assessment of their readiness to comply with the legislation. Of that number, only one in four had that assessment done by an independent, third party.

This past weekend, the federal government published the proposed regulations and guidelines with respect to the new Proceeds of Crime (Money Laundering) Act. The regulations outline in detail the requirements of financial organizations to report suspicious transactions. Failure to comply with the law’s provisions carries a maximum penalty of a $2 million fine and five years in prison.

The Bill C-22 compliance study was conducted by R.I.S. Christie market research on behalf of Deloitte & Touche. It is based on a random sample of 102 financial organizations of different sizes. The survey was conducted between January 26 and February 12, 2001. The survey results are accurate +/- 10% with 90% certainty.
-IE Staff