A new law was passed more than a year ago, but there still no indication when the law will come into effect
Article content
More than a year after the B.C. government trumpeted new provincial oversight of money services businesses, which include currency exchanges, there has been little progress in putting the new law into force.
In 2023, Premier David Eby’s government introduced new legislation to monitor and regulate money services businesses through the B.C. Financial Services Authority because the businesses can be conduits for money laundering.
Advertisement 2
Article content
While a new Money Services Business Act was introduced on March 29, 2023 and later passed, no regulations have been created yet to put the law into force. The details of those regulations are still to be worked out and no deadline for the work has been established.
“Details on the requirements that will pertain to money services businesses seeking to operate in B.C. — including timelines to register with BCFSA and other specifics such as how the suitability of persons or premises associated with a money services business will be assessed — are still to be determined,” a B.C. Financial Services Authority spokeswoman, Candace Jones, said in a statement this week.
In announcing the legislation last year, Finance Minister Katrine Conroy said money services businesses would be required to register with the Financial Services Authority and require background checks and annual reporting to keep “bad actors” out.
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, said the province.
West Coast Homes
Article content
Advertisement 3
Article content
B.C. would be only the second province, after Quebec, with oversight of money services businesses that deal in foreign currency exchange, wire transfers, money orders, traveller’s cheques and similar services outside of traditional financial institutions like banks.
While the B.C. Financial Services Authority provided a written statement, the agency would not make anyone available for an interview.
B.C. Finance Ministry officials said its staff is “actively” working with the authority to develop the regulations. However, authority officials said timelines have yet to be determined and no date has been set for when the act will come into force.
Ministry officials did not answer a question on how long the work will take.
The B.C. Financial Services Authority said it also plans to talk extensively with interested parties to ensure affected businesses are prepared to register under and comply with the requirement of the new act and regulations.
Two 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.
Advertisement 4
Article content
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.
Other B.C. examples include a $200-million laundering operation in the early 2000s that operated as a currency exchange out of a Burnaby home. In 2014, a currency exchange in downtown Vancouver was at the centre of a criminal case where $24 million in drug money was allegedly laundered.
The Cullen inquiry noted the federal government’s oversight of money services businesses had been ineffective.
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 News found that dozens of money services business were operating out of condos and houses, and some directors were linked to alleged criminal activity.
Recently, Richmond bylaw officers issued a citation to Toronto Hanson Currency Exchange in Richmond after Postmedia discovered the company was open despite being voluntarily dissolved in 2021.
Advertisement 5
Article content
Richmond city councillor Kash Heed, a former B.C. solicitor-general and ex-West Vancouver police chief, got the city officials to issue the citation.
This week, Heed said there is absolutely a need for oversight of money services businesses.
“We’ve tried for the federal oversight. We’ve even tried from an enforcement point of view with the integrated proceeds of crime unit. We’ve tried it through civil forfeiture. We tried it here in British Columbia through the Organized Crime Agency,” noted Heed, who spent decades in policing.
He said none of it has worked.
Following the Cullen inquiry, the province did say it was going to regulate money services businesses, but so far, it’s been all words, said Heed.
“In this area, there’s absolutely zero compliance,” he said.
Heed said he believes the best way to provide oversight, generally, in the area of financial crime and money laundering, including of money services businesses, is with a refocused and beefed up federal police force through the RCMP.
“Give them clearly their federal responsibility to deal with these types of issues and have them focus on it,” he said.
Advertisement 6
Article content
Recommended from Editorial
Bookmark our website and support our journalism: Don’t miss the news you need to know — add VancouverSun.com and TheProvince.com to your bookmarks and sign up for our newsletters here.
You can also support our journalism by becoming a digital subscriber: For just $14 a month, you can get unlimited access to The Vancouver Sun, The Province, National Post and 13 other Canadian news sites. Support us by subscribing today: The Vancouver Sun | The Province.
Article content
