Canada is on track to avoid being placed on a global watchlist of countries with weak financial-crime controls, according to two sources familiar with an ongoing international review of the country’s anti-money-laundering regime. The preliminary findings come as assessors from the Financial Action Task Force (FATF)<\/strong> hold their plenary session in Paris this week.<\/p>\n<\/p>\n The FATF is a 40-member intergovernmental body that sets global standards for combating money laundering and terrorist financing<\/strong>. It conducts in-depth evaluations of member countries and publishes the results. Canada also belongs to the Asia\/Pacific Group on Money Laundering<\/strong>, a related 42-member regional body that is co-participating in this review.<\/p>\n<\/p>\n Countries that fail FATF evaluations are placed on one of two lists. Those with serious deficiencies land on the “black list”<\/strong> \u2014 currently home to Iran, North Korea and Myanmar. Those with lesser but significant shortcomings are placed on the “grey list,”<\/strong> which currently includes more than 20 jurisdictions such as Kuwait, Monaco, the British Virgin Islands and Venezuela.<\/p>\n<\/p>\n Grey-listed countries face heightened international scrutiny of their banks, legal systems and supply chains. That scrutiny can deter foreign investment, disrupt trade and negatively affect a country’s sovereign credit rating.<\/p>\n<\/p>\n Canada’s provisional ratings, assigned by the evaluation team ahead of this week’s Paris plenary, appear sufficient to keep the country off the grey list, the sources told The Globe and Mail<\/em>. The sources were not identified because they were not authorized to speak publicly about the matter.<\/p>\n<\/p>\n The review has not yet concluded, and preliminary findings remain subject to change. The FATF is expected to publish its final report in September or October<\/strong>. Officials at the Department of Finance<\/strong> have received a confidential draft of the assessment’s initial findings.<\/p>\n<\/p>\n Both the FATF and the Department of Finance declined to comment on specifics. “The FATF mutual evaluation process is a robust and iterative process in order to ensure a complete picture,” FATF spokesperson Stefanie Mair<\/strong> wrote in an email. “Conclusions should therefore not be drawn until that process is complete.”<\/p>\n<\/p>\n Despite the relatively positive outlook, assessors flagged several areas of concern.<\/p>\n<\/p>\n Canadian officials are expected to hold in-person discussions with the assessment team before a final draft is shared with all FATF delegations later this week. Sources say Ottawa will push to have some provisional ratings upgraded.<\/p>\n<\/p>\n The government is also pointing to recent policy announcements as evidence of progress. These include the creation of a Financial Crimes Agency<\/strong>, a proposed ban on cryptocurrency ATMs<\/strong> and the development of a national anti-fraud strategy<\/strong>.<\/p>\n<\/p>\n Even if Canada avoids the grey list, it could still face enhanced follow-up<\/strong> from the FATF \u2014 a less desirable outcome that requires more frequent reporting on remedial actions, though it typically has no direct impact on a country’s banks or financial system.<\/p>\n<\/p>\n Canada was previously placed in the FATF’s enhanced follow-up process after its last evaluation in 2016. It returned to regular reviews in 2021 after enacting corrective measures. Securing regular reviews again is considered a point of national pride, and Finance officials are expected to resist any push for enhanced follow-up, the sources said.<\/p>\n<\/p>\n The FATF plenary runs from June 17 to 19<\/strong> in Paris. Canada’s evaluation will then be discussed at an Asia\/Pacific Group on Money Laundering<\/strong> meeting in July.<\/p>\n<\/p>\n With a report from Bill Curry<\/em><\/p>","protected":false},"excerpt":{"rendered":" Canada Expected to Dodge FATF ‘Grey List’ After International Financial-Crime Review, Sources Say Canada is on track to avoid being placed on a global watchlist of countries with weak financial-crime controls, according to two sources familiar with an ongoing international review of the country’s anti-money-laundering regime. The preliminary findings come as assessors from the Financial […]<\/p>\n","protected":false},"author":4,"featured_media":1154,"comment_status":"open","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[46,37],"tags":[],"class_list":["post-1155","post","type-post","status-publish","format-standard","has-post-thumbnail","category-canada","category-news"],"yoast_head":"\nWhat Is the FATF and Why Does It Matter?<\/h2>\n<\/p>\n
Preliminary Ratings Suggest Canada Is Safe \u2014 For Now<\/h2>\n<\/p>\n
Key Weaknesses Identified in the Review<\/h2>\n<\/p>\n
Canada Lobbying for Better Ratings<\/h2>\n<\/p>\n
Enhanced Follow-Up Remains a Possibility<\/h2>\n<\/p>\n