5. Laundering proceeds of crime – Division 34, Subdivision C
Qs & As
Division 34 Subdivision C
Criminal Code Amendments (Laundering proceeds of crime)
Q. Why is the Government proposing amendments to the Criminal Code through a Budget bill?
The Government has consistently signalled its commitment to respond to serious crime, notably laundering the proceeds of crime, in recent years. In Budget 2023, the Government committed to bringing forward legislative amendments following a public consultation on ways to strengthen Canada’s Anti-Money Laundering and Terrorist Financing (AML/ATF) Regime. Budget 2024 announced the government’s intention to proceed with a number of legislative amendments.
A bill to implement budget commitments provides the Government with the opportunity to meet its commitments to strengthen the AML/ATF regime in a timely manner. In addition, the proposed amendments to the Criminal Code complement other amendments that address AML/ATF in the Budget.
Q. Investigations into what types of crimes will benefit from these proposed amendments?
These proposed amendments could support investigations into a wide range of crimes, including economic crimes where evidence may be sought from financial accounts. Specific examples could include laundering the proceeds of crime, fraud, motor vehicle theft for economic gain, drug offences, and trafficking in persons. These amendments could also support investigations into cyber-enabled crimes such as online child sexual exploitation offences, where evidence may be sought from online services providers. The proposed production order for specified dates could also support investigations into a variety of offences where evidence may be obtained from telecommunications services providers.
Q. How will the proposed amendments to the Criminal Code support criminal investigations?
A new order to keep an account open or active for a limited period of time would enable activity in an account to continue for a specific period of time. The objective is to support an investigation into a criminal offence.
A new production order would enable the court to issue an order for the production of specified data or documents on multiple, pre-determined dates over a period of up to 60 days after the issuance of the order, to support an investigation into a criminal offence.
Both of these orders are intended to apply to a variety of contexts, and for this reason, the term “account” in the keep open account order is not defined.
Q. What safeguards are included in these proposed amendments to the Criminal Code?
Both proposed orders include a range of safeguards. Safeguards included with the proposed order to keep an account open or active are as follows:
- The order would only be available where prior judicial authorization is obtained, on reasonable grounds to suspect that an offence has been or will be committed and that the order will assist in the investigation of the offence.
- The order would be for a maximum of 60 days.
- The judge issuing the order may include any conditions in the order that they consider appropriate.
- A person subject to the order, such as a financial entity or other organization, would be able to seek a review of the order on an expedited basis.
Safeguards included with the proposed production order for specified dates include the following:
- The order would only be available where prior judicial authorization is obtained on reasonable grounds to believe that an offence has been or will be committed and the information would provide evidence regarding the commission of the offence.
- The order would only apply to documents or data that would be retained as part of a person or organization’s ongoing activities.
- The production of documents or data is limited to a maximum of ten dates that must be at least 72 hours apart over a maximum period of 60 days.
- Finally, the person subject to the order would be able to seek a review of the order.
Q. Are these proposed amendments consistent with rights and freedoms protected under the Canadian Charter of Rights and Freedoms?
The Government is confident that these amendments are consistent with the Canadian Charter of Rights and Freedoms. The Minister of Justice will table a Charter Statement in the coming weeks that will identify potential effects that these amendments may have on rights and freedoms guaranteed by the Charter.
Q. How are the interests of financial institutions or other service providers who may receive these orders taken into account?
The proposed amendments include measures to protect the interests of a person or entity who may be served with these orders. For example, the person or entity who is complying with the order will be able to close the account if they are requested to do so by the account holder. The order is structured so that it no longer applies in these circumstances. In addition, the proposed keep open account order includes an expedited review process, and the court can decide to revoke or vary the order where it is in the best interests of justice.
In terms of the production order for specified dates, measures to protect the interests of persons who may be served with such an order include the following: The limited number of production dates balances interests in investigating crime; respecting Charter-protected rights; and, minimizing the burden on persons or entities who must comply with the order. In addition, the order is also subject to the existing review process for production orders in the Criminal Code, by which a court may revoke or vary an order where it is in the best interests of justice. Finally, this new order could reduce the need for law enforcement to obtain multiple production orders or a general warrant and in this respect the order will enhance predictability and certainty.
Q. Will a financial institution that keeps an account open or active when criminal activity is suspected in relation to the account be protected from criminal and civil liability?
Persons or entities who are subject to a court order and comply with its terms are protected from criminal or civil liability for complying with a judicial authorization. The court order provides the legal authority to do what it specifies.
Q. What did the Government’s anti-money laundering consultation involve?
The Department of Finance, with input from Justice Canada and other departments, publicly released a consultation paper and solicited input from citizens and stakeholders over the course of summer 2023. Justice Canada included a chapter on ideas for Criminal Code reforms and held roundtables and meetings with a variety of justice-sector stakeholders over the course of summer 2023.
Q. What were the outcomes of the consultations?
Among various positions advanced by stakeholders in their feedback on the Criminal Code, most stakeholders recognized the need for up-to-date investigative measures for law enforcement to combat economic crime. Most stakeholders supported amendments for investigative measures that are consistent with Charter-protected rights.
Justice Canada continues to assess stakeholder input.
Overview
Division 34, Subdvision C
Criminal Code Amendments (Laundering proceeds of crime)
Bill C-69 sets out the Government’s proposed amendments to the Criminal Code to strengthen investigative powers for the laundering of proceeds of crime and other serious crimes, taking into account stakeholder consultations undertaken from June – August 2023 and the recommendations of the Commission of Inquiry into Money Laundering in British Columbia. These amendments build on recent reforms to the Criminal Code, the Proceeds of Crime (Money Laundering) and Terrorist Finance Act, and other federal laws to further support the operational effectiveness of Canada’s Anti-Money Laundering and Terrorist Financing (AML/ATF) regime.
Proposed Criminal Code Amendments
Budget 2024 proposes two amendments to the Criminal Code.
- A new order to keep an account open or active for a limited period of time, available to law enforcement based on prior judicial authorization, on a reasonable grounds to suspect standard, to support the investigation of an offence established under an Act of Parliament. Financial services providers often unilaterally close accounts suspected of being linked to criminal activity which can hinder investigations into economic crime.
- A new production order to enable law enforcement to obtain judicial authorization, on a reasonable grounds to believe standard, for the production of specified documents or data on pre-established dates over the duration of the order to support the investigation of an offence established under an Act of Parliament. This proposal would provide a timely means by which law enforcement can obtain this information and would include robust safeguards to respect Charter-protected rights.
- Both orders include measures to protect the interests of persons or entities who are subject to these orders, including measures to limit the burden on these entities, and review mechanisms that enable the court to revoke or to vary an order. As with existing preservation and production orders, a person who is subject to a court order is protected from liability for carrying out the judicially authorized activity.
The Criminal Code provisions would come into force 90 days after Royal Assent.
Key Messages
Division 34, Subdvision C
Criminal Code Amendments(Laundering proceeds of crime)
- As part of Budget 2024, the Government is proposing targeted reforms to the Criminal Code to better support the investigation of money laundering and other serious crimes. The amendments would establish two types of orders: first, an order requiring that an account be kept open for a limited period of time to further a criminal investigation; and second, an order requiring the production, to law enforcement, of specified documents or data on pre-established dates over the duration of the order. These orders are intended to support investigations into the laundering of proceeds of crime but are also expected to have applications in the investigation of other serious offences.
- These amendments take into account stakeholder consultations undertaken between June and August, 2023. Most stakeholders recognized that law enforcement requires up-to-date tools to investigate economic crime, provided that safeguards, such as prior judicial authorization and the ability of the judge to impose appropriate terms and conditions, are in place to respect Charter-protected rights.
- These amendments also take into account a recommendation made in the final report of the Commission of Inquiry into Money Laundering in British Columbia (Cullen Commission). The Cullen Commission recommended that British Columbia’s Attorney General engage with his federal counterpart to implement a formal keep open account framework.
Clause-by-Clause
Division 34, Subdivision C
Criminal Code Amendments (Laundering proceeds of crime)
Clause 356
This clause would establish, at section 487.0131 of the Criminal Code, a new order that would require a person to keep the account referred to in the order open or active, unless the holder of the account requested its closure or deactivation during the period that the order is in effect. Subsection (2) establishes the conditions to be met for the issuance of an order, while additional subsections establish further elements of the order, including an obligation to notify the peace officer or public officer named in the order as soon as practicable when the account is closed at the request of the account holder, and expiry and renewal provisions.
Clause 357
This clause would establish, at section 487.0141 of the Criminal Code, an order that would require a person to produce the documents or data described in the order on the dates specified in the order, if the documents or data are in their possession or control on any of those dates. Additional provisions would set out certain restrictions on the production of information including a minimum timeframe between production dates of 72 hours, a maximum of 10 production dates and a limitation on production of information that may be obtained through existing production order provisions in the Criminal Code.
Subsection (5) would provide that the person may also be ordered to produce reports made under any of sections 7, 7.1 and 9 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act during the period the order is in effect.
Further subsections would establish a maximum duration for the order as well as a renewal provision and conditions for renewal.
Clause 358
This clause would amend section 487.019 of the Criminal Code, which provides that the judge may impose any conditions in orders made under certain provisions of the Criminal Code as the judge considers appropriate, to ensure its application to the proposed keep open account order and production order for specified dates.
This clause also amends this section of the Criminal Code to provide that the judge may include conditions to protect solicitor client privilege in the case of the proposed production order for specified dates.
Clause 359
This clause would amend section 487.0191 of the Criminal Code, which establishes that the judge may issue an order prohibiting a person from disclosing the existence of an order made under certain provisions of the Criminal Code for a specified period of time, to ensure its application to the proposed keep open account order and the production order for specified dates.
Clause 360
This clause would amend section 487.0192 of the Criminal Code, which outlines additional requirements associated with production orders, to ensure its application to the proposed production order for specified dates. In particular, the proposed production order for specified dates would be included within subsections (1) and (5). Subsection (1) requires the order to include certain details pertaining to the production, including the time, place and form for production of documents or data; while subsection (5) establishes the probative force of copies of documents produced under certain production order provisions of the Criminal Code.
Clause 361
This clause would establish a new, accelerated review provision, at section 487.01921 of the Criminal Code, through which a person subject to a keep open account order under proposed section 487.0131 could seek to have the order revoked or varied by a court on an expeditious basis. It would require that notice be provided to the peace officer or public officer named in the order 3 days prior to the making of an application, and it would require that the hearing be commenced within 14 days of making the application or as soon as practicable. It would also require the person subject to the order to comply with the order until such time as the court revokes or varies the order.
Clause 362
This clause would amend section 487.0195 of the Criminal Code to ensure its application to the proposed keep open account order and the proposed production order for specified dates. If amended, section 487.0195 would clarify that a peace officer or public officer may request a person to voluntarily preserve data, keep an account open or produce a document where they are not precluded by law from doing so, and would provide a limitation on civil and criminal liability for the person when they voluntarily take such an action.
Clause 363
This clause is consequential to Clause 356. It would amend Part XXVIII of the Criminal Code by adding, after Form 5.003, two new forms related to the keep open or active account order proposed for section 487.0131 of the Criminal Code. Form 5.0031 provides a template for an information to obtain a keep open or active account order, to be completed by a peace officer or public officer when applying for such an order. Form 5.0032 provides a template for a court order to keep an account open or active. Both forms provide for consistency and completeness in applications by peace officers or public officers for a keep open account order, and in court orders issued by judges or justices consistent with proposed section 487.0131 of the Criminal Code, for the benefit of all parties in the judicial process.
Clause 364
This clause is consequential to the amendments proposed in Clause 357. It would amend Form 5.004 of Part XXVIII of the Criminal Code, the Information to Obtain a Production Order, to reflect the requirements of the proposed production order for specified dates.
Clause 365
This clause is consequential to the amendments proposed in Clause 358. It would establish Form 5.0051, the Production Order for Specified Dates, in Part XXVIII of the Criminal Code.
Clause 366
This clause is consequential to the amendments proposed in Clause 359. It would amend Forms 5.009 and 5.0091 of Part XXVIII of the Criminal Code to ensure their application to the keep open or active account order and the production order for specified dates. These forms provide the template for an information to obtain a non-disclosure order, and a non-disclosure order.
Clause 367
This clause would provide that the provisions of Subdivision C of Division 34 of Part 4 of this Act would come into force on the 90th day after the day on which the Act receives Royal Assent.
- Date modified: