theglobeandmail.com
Canada's Lackluster National Risk Assessment for Money Laundering and Terrorist Financing
Canada's recently released national risk assessment for money laundering and terrorist financing is criticized for its lack of depth, outdated information, and insufficient guidance for businesses, contrasting sharply with the more frequent and comprehensive assessments of other countries like the U.S., Britain, and Australia.
- What are the key shortcomings of Canada's 2025 national risk assessment on money laundering and terrorist financing?
- The assessment is criticized for its shallow analysis, reliance on outdated data (e.g., a five-year-old estimate of money laundering), and insufficient quantification of terrorism financing and proliferation financing. It offers limited actionable intelligence for businesses mandated to use it for compliance.
- How does Canada's approach compare to that of its allies in addressing money laundering and terrorist financing risks?
- Unlike Canada's infrequent and less detailed assessment, the U.S. has issued four updates since 2015, Britain four in the last decade, and Australia, praised by the FATF, has produced numerous sector-specific and regional assessments since 2015, including separate reports on money laundering and terrorist financing.
- What are the potential implications of Canada's inadequate risk assessment for its financial system and international standing?
- The lack of comprehensive and up-to-date information undermines businesses' ability to comply with regulations, potentially increasing vulnerability to financial crimes. Canada's approach also risks damaging its international reputation, especially given the upcoming FATF review and the IMF's call for deeper cross-border risk understanding.
Cognitive Concepts
Framing Bias
The article frames the Canadian government's approach to combating financial crime as inadequate and lacking in transparency, highlighting the insufficient depth and outdated information in the national risk assessment report. The subdued release of the report in the summer is presented as evidence of an attempt to obscure the shortcomings. The use of phrases like "thin gruel," "didn't want anyone to read it," and "smells like spin" contributes to this framing. Conversely, the approaches of the US, UK, and Australia are presented as more robust and transparent, showcasing the contrast and implicitly criticizing Canada's approach.
Language Bias
The article uses loaded language to criticize the Canadian government's actions. For example, describing the report as "thin gruel" and the government's approach as "smells like spin" are subjective and emotionally charged. The repeated comparison to other countries' more frequent and detailed reports also implicitly criticizes Canada. Neutral alternatives could include describing the report as "lacking in detail" instead of "thin gruel" and "lacking transparency" instead of "smells like spin.
Bias by Omission
The article focuses heavily on the shortcomings of Canada's national risk assessment and largely omits potential mitigating factors or positive aspects of Canada's efforts to combat financial crime. While acknowledging FinTRAC's staffing plans, the article doesn't delve into their potential successes or ongoing efforts. It also overlooks any internal government justifications for the report's limited scope or the timing of its release. The article's emphasis is overwhelmingly negative, creating a potentially unbalanced view of the situation.
False Dichotomy
The article presents a false dichotomy between Canada's approach and those of its allies. While highlighting the differences in frequency and depth of reporting, it doesn't fully explore the contextual factors that might explain these variations. For example, differences in resources, legal frameworks, or specific national priorities could affect the approach taken by different countries. The article simplifies a complex issue into a binary of 'good' (other countries) and 'bad' (Canada).
Sustainable Development Goals
The article highlights Canada's insufficient efforts in combating money laundering and terrorist financing, indicating a weakness in its institutions and hindering progress towards SDG 16 (Peace, Justice, and Strong Institutions). The infrequent updates to national risk assessments, lack of depth in analysis, outdated data, and insufficient resources allocated to financial crime agencies demonstrate a failure to establish strong and effective institutions capable of preventing and prosecuting financial crimes. This directly impacts the goal of promoting peaceful and inclusive societies for sustainable development, providing access to justice for all and building effective, accountable and inclusive institutions at all levels.