SNOW WASHING in Canada; the laggard in the fight against financial crime

“SNOW-WASHING” is a term used in Canada to describe how Some more discerning crooks use Canada as their money-laundering venue of choice.

A Toronto tax lawyer coined the saying

• “Clean as the driven snow of the Great White North.”
• https://www.taxfairness.ca/en/news/snow-washing-canada-new-tax-haven

The British Virgin Islands-based and Canadian-born lawyer Martin Kenney wrote last year.

• “Due to its positive international image, Canada is seen by some of the more discerning crooks as their money-laundering venue of choice”

In some ways, Canada has a system that is the worst of all worlds.

Because its provinces have so much autonomy, a lot of regulation is as fragmented as in the United States; but because it isn’t a superpower, enforcement is as weak as in a European Union country or Britain.

And beneath Canada’s outdoorsy cleaner-than-clean exterior, one can see the problems, as follows:-

1. The pioneering golden visa program, which became so over-heated that it had to be abolished back in 2014 (except in Quebec) to prevent officials from being overwhelmed by applicants,
   • https://civs.ca/2019/05/canadian-immigrant-investor-golden-visa-alternative/
2. The Vancouver property market, which became so over-heated that an official enquiry was launched into money laundering,
   • https://cullencommission.ca/
3. The whole phenomenon of “snow-washing”.
   • https://endsnowwashing.ca/
4. And the latest scandal
   • Top-secret records show New Brunswick, Alberta companies received millions in suspicious transfers
   • https://www.cbc.ca/news/canada/new-brunswick/fincen-files-icij-nb-1.5734110

The snow-washing mechanism is broadly the same as that used by financial criminals in Britain, or indeed, Nevada.

• Innocent-appearing Canadian-registered shell companies are created to move money or hold assets while themselves being owned in tax havens that guarantee anonymity to company owners.

However, Last week the Canadian government published the results of a consultation into whether it should collect information centrally as to the owners of Canadian corporate structures,

• https://www.ic.gc.ca/eic/site/142.nsf/eng/00002.html

This is a distinctly cautious document, and its prose style does not lift the spirits. The following is the most exciting quote the author of the source article of this piece could find.

• “As this consultation ends, strengthening corporate beneficial ownership transparency remains a priority of the Government of Canada.
• Work should continue on advancing a coordinated approach to strengthening beneficial ownership while respecting jurisdictional responsibilities with respect to corporations,”

Nonetheless, it is a step forward, and the report was cautiously welcomed by Transparency International’s [TI] Canadian chapter and other groups working to fight corruption.

TI did note that the report failed to realize that a publicly accessible registry would help users analyse large volumes of data and thus spot suspicious patterns so that only being able to access limited records does not.

• “Canada is one of the last G7 countries without a commitment to implement a central or publicly accessible beneficial ownership registry,”
• “Canada’s federal government can no longer afford to be last place in the fight against money laundering and must make reforms to ensure we no longer have an international reputation for snow-washing.”

Thanks to the Corporate Transparency Act in the United States and the White House’s commitment to fight Kleptocracy, the dynamic of the Trump years has been reversed in some ways. It is Canada that is now at risk of becoming the laggard in the fight against financial crime, as many Canadian commentators have noted.

• https://www.thestar.com/opinion/contributors/2020/12/17/us-commitment-to-end-corporate-secrecy-should-urge-canada-to-act.html.

Sourced from:

• Coda insights from Oliver Bullough Oligarchy newsletter.
• https://www.codastory.com/newsletters/oligarchy/