Federal Report Proposes Non-Profits Disclose Suspicious Cash Transactions

The federal government would like to make non-profit groups disclose suspicious cash transactions, according to documents. (Ryan Remiorz/The Canadian Press)

The federal government would like to make non-profit groups disclose suspicious cash transactions, according to documents.

The proposal is in a federal report by the Department of Finance, which says non-profits are “at risk of terrorist financing abuse,” according to Blacklock’s Reporter.

“These organizations were identified as being at risk of terrorist financing abuse as they are not monitored for terrorist financing activities or educated about their terrorist financing risks in the same way registered charities are by the Canada Revenue Agency,” said the report.

The report titled, “Canada’s Anti-Money Laundering And Anti-Terrorist Financing Regime Strategy,” did not identify any allegations of wrongdoing but said there is a “possible coverage gap with respect to non-profit organizations.”

The report proposes amendments to the federal act that covers terrorist financing, called “The Proceeds of Crime and Terrorist Financing Act.” The act currently requires around 24,000 businesses to report suspicious cash dealings, including banks, casinos, currency dealers, mortgage lenders, and realtors.

Under the act, all cash transactions over $10,000 must be reported. However, smaller transactions can also be reported if businesses deem them suspicious. While the report identifies a potential gap in the rules involving non-profits, it adds they are not the main risk.

Overall, it said, “the largest money laundering risks in Canada come from illicit drug trafficking, various types of fraud, especially mass-marketing fraud, and third-party money laundering.”

The report adds money laundering is a constantly evolving threat.

“The Government of Canada takes the issues of money laundering and terrorist financing very seriously,” it said. “Over the 2023 to 2026 planning period regime partners will work to implement the medium term priority actions identified in this strategy.”

However, in a companion report, the finance department said they are only worried about a small number of bad actors.

The report said the “vast majority of businesses, professions and sectors assessed in this report follow Canadian laws and contribute to the social and economic prosperity of the country … only a very small subset of actors are complicit in illicit activities such as money laundering.”