BC LAW TO COMBAT MONEY LAUNDERING STILL NOT IN FORCE THREE YEARS AFTER BEING INTRODUCED
More than three years after the B.C. government announced new oversight of businesses that deal in foreign exchanges, wire transfers and money orders because they can be conduits for money laundering, the laws are still not in force.
In 2023, Premier David Eby’s government introduced legislation to monitor and regulate so-called money services businesses through the B.C. Financial Services Authority.
Money services businesses include currency exchanges and operations that send money outside of Canada. There are more than 1,100 such companies in B.C., most of them in Metro Vancouver.
While a Money Services Business Act was introduced on March 29, 2023, and later passed, it remains a legislative shell. There are no powers because regulations that set out the rules and penalties have not been created. The details of those regulations are still to be worked out, and no deadline has been set.
“It will be a good thing if British Columbia is able to exercise more oversight of this sector, and the faster they do it, the better because technology is changing quickly,” said Salvator Cusimano, executive-director of Transparency International Canada .
“If we’re looking in the crypto space, for example, a lot is happening that is creating new ways for bad actors to engage in financial crimes and money laundering through money services businesses,” noted Cusimano.
Crypto currency is a digital form of money that works without banks or governments, such as bitcoin, using computer codes and technology to secure transactions.
Cusimano said it would be good to know what is holding up the implementation of the regulations in B.C., whether it is a technical problem or whether those with a stake in the coming regulations are pushing back.
Cusimano said he believes there is a way to implement more oversight of money services businesses without putting an undue burden on the companies, which when legitimate, provide important services. The B.C. government has also noted that such businesses play an important role in the province’s financial system, providing, for example, accessible services to people with limited financial options, including low-income households and migrants sending money to their families in their home countries.
In a written response sent by public affairs officer Shantel Esplen, the provincial Ministry of Finance told Postmedia the legislation passed in 2023 was the first step in creating a new regulatory system, and that the work continues.
The finance ministry said it has been leading the development of the regulations and working closely with the B.C. Financial Services Authority on the details.
“This is new for B.C., and we want to make sure we put a strong, effective regulatory regime in place,” said the ministry.
The finance ministry did not say, in response to Postmedia questions, why it was taking so long or whether there was some obstacle to putting in place the regulations.
In announcing the legislation in 2023, Katrine Conroy, then the minister of finance, said money services businesses would be required to register with the B.C. Financial Services Authority and require background checks and annual reporting to keep “bad actors” out.
The province has said the Financial Services Authority — a regulatory agency that also has oversight over credit unions and real estate services — will have investigative and enforcement powers to help protect people from unknowingly working with unregistered or criminally linked businesses.
In a written statement sent by Kate Bilney, the manager of communications for the financial services authority, the agency said it has undertaken a significant review of the money services businesses industry in B.C. to support its initial work to prepare to administer the Money Services Business Act.
This has involved engaging third-party expertise, reviewing literature and data, conducting an industry survey, and interviewing stakeholders within B.C.’s money services businesses industry to gather insights into their business models, software, and their level of awareness of the incoming Act.
The financial services authority said it also continues to engage with regulatory partners, such as the Financial Transactions and Reports Analysis Centre of Canada, the country’s financial intelligence gathering agency often called Fintrac, and the Bank of Canada to monitor regulatory developments federally and in other jurisdictions.
If B.C. regulates money services businesses, it will join Quebec as the only provinces in Canada to do so.
The move to regulate money service businesses in B.C. is a result of recommendations from several inquiries.
Three years ago, the B.C. government-commissioned Cullen inquiry into money laundering concluded that money services businesses pose a significant money laundering risk and should be regulated by the province.
The inquiry pointed to evidence uncovered by the RCMP in 2015 that as much as $220 million a year was being laundered through an unlicensed money services business in Richmond.
Two earlier B.C. government-commissioned reports — former RCMP superintendent Peter German’s 2018 report into money laundering in casinos and a 2019 report into money laundering in real estate — made similar recommendations to regulate money services businesses.
A 2019 investigation by Postmedia found that dozens of money services businesses were operating out of condos and houses, and some directors were linked to alleged criminal activity.
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2026-08-04T14:09:11Z
