Ethics Newsline®

Special to Newsline from Canadian correspondent Errol P. Mendes

TORONTO
A leading Canadian financial editorial writer, Neville Nankivell, is claiming that Canada is one of the easiest jurisdictions in the world in which to launder the proceeds of organized crime.

Examples cited by Mr. Nankivell include the recent massive U.S. money-laundering probe of a bank in New York involving the Russian mafia, which has Canadian links.

The Russian Mafia had also created YBM Magnex International Inc. as a money-laundering vehicle, according to Nankivell, who says that YBM Magnex is now in liquidation, delisted on the Toronto Stock Exchange, and facing class-action lawsuits by former shareholders who lost $635 million in the fraud.

In addition, a national task force called the Criminal Intelligence Service Canada has also recently reported that older crime syndicates, such as those from Sicily, and Asian-based criminal groups are continuing to infiltrate legitimate businesses to launder the proceeds of drug trafficking, prostitution, illegal gambling, and other criminal activities.

Nankivell is urging the government to speed up passage of tough anti-money-laundering legislation.

The draft legislation being prepared by the Canadian government would include mandatory reporting of suspicious financial transactions by banks and other financial institutions, foreign exchange bureaus, and even casinos.

Noncompliance could result in heavy fines and jail terms.

The proposed legislation would also give customs officials the right to seize large undeclared amounts of cash or equivalents at the border. Lawyers and accountants would also have to report suspicious transactions carried out by clients, or face severe penalties.