Eby eyes licences for money-transfer firms

VANCOUVER — B.C. Attorney General David Eby is considering a B.C. licensing system for money transfer and foreign exchange businesses, which are vulnerable to money launderers.

Eby was responding Monday to a Postmedia investigation that found two dozen money-services in the Vancouver region are run out of condos and homes. Others are run by real-estate firms and property developers, and many that have no public face at the street level or online.

The investigation, published last week, found that a company owner was fronting a money-services business for another person. It found firms that had supposedly closed were still registered with Fintrac, Canada’s financial information-gathering agency.

Court documents alleged the owner of one such business was also involved in an underground banking scheme to move millions of dollars from China to Canada.

Eby said the province is in the early stages of policy work on licensing money-services businesses.

“It is certainly possible that any provincial registry would go beyond requiring the principals and the address … to be registered,” Eby said. “It could include background checks and further information to ensure that the businesses are not being abused for the purposes of money laundering.”

Quebec is the only province with a licensing system for these businesses.

Quebec’s licensing process requires applicants to provide a significant amount of information, including: legal structure, officers, directors, partners and branch managers; the financial institutions with which it deals; its business plan; and financial statements. The business and its owners must also meet conditions of suitability and obtain a security clearance from Quebec’s provincial police.

Eby said the need for a B.C. licensing system points to the failure of the federal government to act.

He said he has been concerned for some time that Fintrac — which already requires moneyservice businesses to register — isn’t working.

It gathers information, he said, but there is little action taken on that information.

Across Canada, more than 800 money-services businesses handle an estimated $39 billion a year. The federal government and the Financial Action Task Force, an international anti-money-laundering standards-setting agency, have identified the sector as highly vulnerable to money laundering.

In a written response, a federal Finance Department spokeswoman, Marie-France Faucher, said the government is examining changes to Fintrac recommended by a parliamentary committee.

Sources have told Postmedia that today’s federal budget will unveil plans for a new body to improve money-laundering investigations and increase the likelihood of prosecutions.

A new “anti-money laundering action co-ordination and enforcement team” will be intended to co-ordinate efforts by the RCMP, Canada Revenue Agency, Canada Mortgage and Housing, the Justice Department and Fintrac.

Eby said Monday he had no knowledge of Ottawa’s plans.