New law won't stop Canada being used . . . . (as tax haven)

New law won't stop Canada being used . . . . (as tax haven)

Postby Oscar » Fri Mar 03, 2017 11:00 am

New law won't stop Canada being used for money laundering, tax evasion, critics say

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By Marco Chown OvedForeign Affairs Reporter Tues., Feb. 28, 2017

Ottawa’s first comprehensive reform of corporate law in more than a decade will do little to prevent tax cheats and criminals from hiding their identities, say critics of a bill winding its way through parliament.

Foreigners are using Canadian corporations to “snow wash” illicit funds [ ... tax-haven/ ] — as the Star revealed through the Panama Papers investigations [ ... sults.html ] — and they will have little impediment to continuing to move money anonymously even after Bill C-25 becomes law, financial crime experts say.

“The bill falls short of its potential to address the real risks of money laundering, terrorism financing and tax evasion [ ... ollectors/ ],” said Denis Meunier, a former top official with the Canada Revenue Agency and FINTRAC, Ottawa’s anti-money laundering watchdog.

Meunier noted that an intergovernmental review last fall found Canada’s corporate transparency is non-compliant with international anti-money laundering and terrorism financing standards.

“Match up the assessments of the risk . . . . And then you see this bill, there’s a gap. For me, it’s stunning that the government hasn’t (done more),” said Meunier, a member of Transparency International Canada who shared his analysis with a parliamentary committee last week.

Bill C-25, which is expected to receive final reading next month, addresses several aspects of corporate law, but the one that’s most troubling for financial analysts and law enforcement is the partial ban on bearer shares.

Bearer shares are archaic financial instruments that play a big role in money laundering because they act like cash for criminals. Unlike normal stocks in a company, which are registered to their rightful owner, bearer shares belong to anyone who physically holds them. Like a cheque made out to “cash” the certificates, which can be worth millions, can be bought and sold without leaving a trace.

Under heavy international pressure, most of the world’s most notorious tax havens have done away with bearer shares. Canada lags other major nations by continuing to allow them.


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