This overhyped ‘money laundering’ panic threatens to rob us of rights

Terence Corcoran

The major flaw in the current Canadian freak out over money laundering is that the activity is not necessarily criminal

As we all know, preservation of privacy is of the utmost importance, especially when it comes to personal financial information. The privacy issue is so crucial to our society that Canada’s privacy commissioner is taking legal action against Facebook for “breach of trust” for allegedly failing to protect the personal information of its customers. B.C.’s privacy commissioner last month joined his federal counterpart to argue that there is “an urgent need for stronger privacy laws.”

Protecting privacy is a prime obsession with politicians and business. In the ongoing national policy debate over the future role of open banking, in which all financial data can be shared among institutions, the risks to personal and corporate privacy are among the greatest concerns.

Hiding the ownership and origin of money and assets isn’t necessarily a crime

How strange, then, to witness the sudden political agitation in B.C. and elsewhere for governments to enact laws that would sanction massive breaches of financial privacy by mandating disclosure of the beneficial ownership of financial and real estate assets.

The trigger for the rising demand for beneficial ownership disclosure was a report from the B.C. Expert Panel on Money Laundering and B.C. Real Estate, which claimed that in 2015 criminals washed $7.4 billion through the province. Countrywide, the panel claimed the national Maytag machine processed $47 billion in criminal cash.

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The panel itself admitted the numbers are speculative, but that didn’t stop it from painting a frightening picture of criminals — drug dealers, sex traffickers, gangster gamblers — invading Canada’s markets, spreading social devastation and economic risk as they hide behind their ability to invest in Canada without disclosing their identities.

To halt the flow of allegedly illegal money into the province, the B.C. panel report zeroed in on one key proposal: “Disclosure of beneficial ownership is the single most important measure that can be taken to combat money laundering but is regrettably under-used both internationally and in Canada.” (The italics are theirs.)