Victoria – The BC Attorney General has released the Peter German report on anti-money laundering, and announced that the government has begun implementing the 48 recommendations in an effort to put an end to the flow of dirty money into British Columbia’s casinos.
“The German report paints a troubling picture of government that didn’t respond effectively to pervasive money laundering in B.C. casinos. German found they didn’t effectively detect, prevent or prosecute it — they turned a blind eye to it,” said David Eby, Attorney General.
German found that large-scale, transnational money laundering has been occurring in B.C. casinos. He also highlighted how organized crime used the “Vancouver model” to take advantage of Lower Mainland casinos, as well as other sectors of the B.C. economy.
The report makes 48 recommendations, nine of which the government has implemented. The remainder of the recommendations are in the initial stages of implementation, or are being reviewed by government in preparation for further action.
Peter German report process and recommendations
Report process and review:
As it was contemplated that the report would be publicly released, the version received on March 31, 2018, needed to be reviewed for privacy considerations.
As an independent reviewer, it was at all times within German’s absolute discretion as to the content of his report. After discussions with government, German undertook the following process facilitated by the Ministry of Attorney General:
- As an initial step, three government-related entities were provided with a confidential, embargoed copy of the report, and were offered an opportunity to provide a response.
- German was provided with the responses. It was in his complete discretion as to whether he would edit his report in any way as a result of information provided.
- Government subsequently provided German with lists of people and organizations that were identifiable, and may be impacted by, the report.
- The Ministry of Attorney General sent a letter to potentially impacted individuals and organizations, offering them an opportunity to receive relevant excerpts from the report, if they were willing to sign a confidentiality undertaking.
- All notified individuals and organizations were told that it would be at German’s absolute discretion as to whether any changes to his report would be made.
- Once the signed undertakings were received, those individuals were provided with a paper copy of the relevant excerpts, and were provided a set time within which they could provide a written response.
- The relevant excerpts were prepared by the Ministry of Attorney General, who identified which portions of the report related to which individuals or organizations.
- The deputy attorney general’s office received several written responses or comments on the excerpts. These excerpts were forwarded to German for his consideration.
- German considered the responses, and provided a final report on June 19, 2018. As has been the case through this process, it remained within his discretion, as an independent reviewer, as to whether he makes any changes.
Status of recommendations
German’s report included 48 wide-ranging recommendations. The following recommendations are already completed or underway:
R3: That the British Columbia Lottery Corporation (BCLC), in conjunction with the regulator and service providers, review the present source of funds declaration on at least an annual basis to determine if refinements are required.
R4: That BCLC re-enforce the importance of service providers not accepting cash, or other reportable instruments, if they are not satisfied with a source of funds declaration.
R12: That a transaction analysis team be developed to review all suspicious transaction reports (STRs), and that the team be composed of a representative of the regulator/designated policing units (DPU), Joint Illegal Gaming Investigation Team (JIGIT), and BCLC.
R13: That the transaction analysis team meet on at least a weekly basis to review all STRs, and develop strategies to deal with each.
R14: That JIGIT be provided continuing support with respect to its investigative mandates.
R16: That BCLC not engage in further undercover operations, except in conjunction with the regulator and/or the police.
R17: That no further expense be incurred by BCLC with respect to the SAS anti-money laundering software system.
R29: That regulatory investigators continue to be special provincial constables.
R34: That funding of the regulator continues to be from gaming revenue.