Money laundering in Canada

Canada has an extensive money laundering problem that has attracted international attention. Not only has it become a significant share the country’s domestic economy, but anti-money laundering experts have named two distinct types of laundering after the country. A public inquiry is currently being held to gauge the extent of the problem.[1]

Impact On The Economy

Canada generates a significant share of its gross domestic product(GDP) from money laundering. Canadian intelligence estimates $113 billion of funds are laundered annually, which works out fo over 5% of GDP.[2]

Snow Washing
Further information: Snow washing

The Vancouver Model

The Vancouver Model is the name anti-money laundering experts gave to a unique model observed in Vancouver, Canada.[3] It involves taking illicit cash earned through crime to a casino (often a VIP room), and gambling some of the proceeds.The chips are then cashed out of the casino as clean cash. To further obfuscate the funds in a money laundering process known as layering, the funds are then used to buy assets such as real estate.[4]

Once the real estate is sold at a profit, sometimes to a related party, the funds are considered legitimate (and often tax free) profit. A combination of Canada’s opaque ownership laws and low scrutiny on foreign investment makes it an ideal target.[5]

References
  1. Kane, Laura (2020-02-24). "Money laundering in B.C.: Public inquiry begins in Vancouver". British Columbia. Retrieved 2022-04-16.
  2. "As Canada's home prices soared during COVID-19, real-estate money laundering audits fell 64% | Globalnews.ca". Global News. Retrieved 2022-04-22.
  3. "How Chinese gangs are laundering drug money through Vancouver real estate | Globalnews.ca". Global News. Retrieved 2022-04-16.
  4. "How criminals used Canada's casinos to launder millions". the Guardian. 2018-10-15. Retrieved 2022-04-16.
  5. "Opacity: Why Criminals Love Canadian Real Estate" (PDF). Transparency International Canada.
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