Canada's proceeds-of-crime legislation
| Author | Robert Hubbard; Daniel Murphy; Fergus O'Donnell; Peter De Freitas |
| Pages | 79-158 |
CHAPTER
TWO
CANADA'S
PROCEEDS-OFCRIME
LEGISLATION
A.The
First
Proceeds-of-Crime
Legislation
In
December
1988,
after
several years
of
effort,
the
United
Nations
Convention
against
Illicit
Traffic
in
Narcotic
Drugs
and
Psychotropic
Substances
(the
1988
Vien-
na
Convention)1
was
completed,
with
the
intent
of
targeting drug trafficking.
As
part
of a
global
war
against drugs,
the
1988
Vienna Convention required
all
of its
signatories
to
prohibit drug money laundering
and to
permit
the
confiscation
of
drug proceeds.
On I
January
1989,
the
Proceeds
of
Crime
Act,
through Bill
C-6i,2
added
proceeds-of-crime
provisions
to the
Canadian
Criminal
Code3
and to the
Canadian drug laws found
at
that time
in the
Narcotic
Control
Act and the
Food
and
Drugs
Act.4
Canada
met its
obligations
under
the
Convention
by
passing Part
XII.2
of the
Criminal
Code
in the
Proceeds
of
Crime
Act.
The
Proceeds
of
Crime
Act was the
first
proceeds-of-
crime legislation
in
Canada.
To
improve
on
this legislation, organized-crime
amendments were introduced into Parliament
in
Bill C-24
in
early
2001
and
proclaimed
in
early
2OO2;5
through these amendments,
the
Canadian
govern-
ment
has
signalled that proceeds legislation
is a
fixture
of
Canadian criminal
law.
This chapter
discusses
the
initial legislation
and the new
amendments
with
a
view
to
chronicling
the
nature, extent,
and
form
of the
Canadian
approach
to the
proceeds-of-crime problem.
1
United
Nations
Convention
against
Illicit
Traffic
in
Narcotic
Drugs
and
Psychotropic
Substances
(1988
Vien-
na
Convention),
accessible
at
time
of
writing
at
org/e/ind_conv.htm>.
1583
UNTS
3; CTS
1990/42.
See
Chapter
i
for
more
details.
2
Proceeds
of
Crime
Act, S.C.
1988,
c.ji.
The Act has
been
replaced
by the
Proceeds
of
Crime
(Money
Laundering)
and
Terrorist
Financing
Act, S.C.
2000,
c.iy,
as am.
S.C.
2001,
c.i2,
27, 32, and
41
(accessi-
ble
at
time
of
writing
at
The Act
received
royal
assent
on 29
June
2000.
Ss.i—4,
38,
40—44,
45(1),
46—53,
paras.S4(b)—(d),
subss.55(i),
(2)—(6),
55.56—61,
66—82,
84, 85, 90, and
91
came
into
force
on 5
July
2000
(see
81/2000-55).
85.5,
7,
8,10,
and
n,
the
portion
of
5.54
before
para.(fc),
subss.55(3)—(5.1)
and
(7),
and
5.89
came
into
force
on 28
October
2001
(see
SI/2Ooi-88).
85.9.1,
55.1,
56.1,
60.1,60.2,
and
subs.
55(5.1)
came
into
force
on 24
December
2001
(see
SI/2OO2-I6).
8.7.1
of the Act
also
came
into
force
on
12
June
2002
(see
SI/2002-86).
3
Criminal
Code,
R.S.
1985,
c.C-46.
4
Narcotic
Control
Act, R.S.C.
1970,
c.N-i,
and
Food
and
Drugs
Act, R.S.C.
1985,
c.F-27.
This
history
is
set out in R. v.
Tejani
(1999),
138
C.C.C.
(3d)
366 at
375-76 (Ont. C.A.)
[Tejani].
5
An Act to
amend
the
Criminal
Code
(organized
crime
and law
enforcement)
and to
make
consequential
amendments
to
other
Acts,
S.C.
2001,
c.32
(referred
to
subsequently
as the
2001
organized-crime
amendments).
By
i
February
2002,
most
of the
provisions
of the
Bill
were
proclaimed
into
force
as
sections
of the
Criminal
Code,
above
note
3.
[79]
In
Tejani,
the
Court
of
Appeal
for
Ontario
described
the
purpose
of
Canada's
original proceeds legislation:
Bill
C-6i
focused on the
profits
of
criminal activity.
It
recognized that
not
only
had
illegal drug
trafficking
become
a
grave societal problem,
so too had the
laun-
dering
of
drug money.
It
recogni/ed that
the
profits
of
crime
had
reached unac-
ceptable levels.
And it
recognized that
the
existing provisions
of the
Criminal
Code
and
other
federal
statutes
had not
adequately curtailed
the
increasingly sophisticat-
ed
methods
of
laundering money.
I
think
it
evident
from
Bill
C-6i's
origin
and
purpose,
...
that Parliament
intended
to
cast
a
wide
net
over
the
laundering
of the
proceeds
of
illicit drug
deal-
ing.
The
actus
reus
of the
offence
may be
committed
by
dealing with
any
property
or the
proceeds
of any
property
in an
exhaustive
list
of
ways—by
using, transfer-
ring
the
possession
of,
sending, delivering, transporting, transmitting, attaining, dis-
posing of, or otherwise dealing in any manner and by any means. This broad
actus
reus
responds
to the
concern that
money
can be
laundered
in
many different ways:
through
financial
institutions that take deposits, through currency exchange busi-
nesses,
in the
securities
and
insurance industries, through
the use of
real estate
or
corporations,
and by
buying precious gems
or
expensive
commodities.6
A
similar
overview
of the
proceeds-of-crime
legislation
was
also
provided
in R. v.
Poirier.7
The
judge
in
Poirier
discussed
the
background
of the
legisla-
tion:
Proceeds
of
Crime
legislation
has
been enacted only
a few
years ago.
It
forms Part
XII.2
of the
Criminal
Code.
The
Saskatchewan
Court
of
Appeal
in The
Queen
v.
Khouri,
a
decision brought
down
in
March
of
1995,
had
this
to say
concerning
the
intention
of
Parliament
in
bringing
down
this legislation.
It
stated
that
as
part
of
its
national
drug
strategy,
on
January
the
1st,
1989,
Parliament
enacted
new
offences
to
address
another
aspect
of the
drug
trade:
the
need
to
strip
traffickers
of any
wealth
acquired
from
such
activity.
Bill
C-6i
titled
An Act to
Amend
the
Criminal
Code,
the
Food
and
Drugs
Act
and
the
Narcotic
Control
Act, Statutes
of
Canada
1988
Chapter
51,
the
Proceeds
of
Crime
Legislation, followed
a
long
period
of
study
by the
federal
and
provincial
governments, particularly
by the
enterprise crime study group consisting
of
repre-
sentatives
of the
Federal Solicitor General
and the
Provincial Attorneys General.
The
legislation
reflects
a
growing
awareness
of the
need
to
attach
the
proceeds
of
drug
related
crime
taken
from
the
(House
of
Commons Debates, Volume
129,
number
173,
Sep-
tember
14,1987).
The
legislation addressed
the
inadequacy
of
section
354 of the
Criminal
Code
as
6
Above note
4 at
375—76.
Similarly
in R. v.
Daust
Supreme Court concluded
that
Parliament's
intent
was to
criminalize
all
acts
in
relation
to
proceeds
of
crime.
7
[1996]
N.B.J.
No. 666
(Prov. Ct.).
[8o] TWO: CANADA'S PROCEEDS-OF-CRIME LEGISLATION
[80]
a
means
of
attaching crime proceeds.
That
section, which describes
the
offence
of
property obtained
by
crime, proved
to be
inadequate
in
relation
to the
seizure
and
forfeiture
of
tainted property.
...
Bill
C-6i
resulted
in
numerous inter-related
amendments
to the
Criminal
Code,
the
Narcotic
Control
Act and the
Food
and
Drugs
Act, Revised Statutes
of
Canada
1985
Chapter
F-2y.
Within
the
drug statutes,
two
new
offences
were created: possession
of the
proceeds
of
crime
and
laundering.
In
the
Narcotic
Control
Act,
the
offences
are
defined
in
section
19.1
and
section
19.2.
In
our
opinion,
stated
the
court
in The
Queen
v.
Khouri,
these provisions make
clear
that Parliament intended
to
provide
law
enforcement agencies
with
better
means
of
attaching money
and
property generated
by the
drug trade.
The
various
proceeds
of
crime provisions
in the
Criminal
Code
and the
Narcotic
Control
Act
came into force
long
after
the
original
trafficking
provisions.
The
language, struc-
ture,
and
legislative history
of
section
19.1
and
related provisions showed that Par-
liament
intended
the
provision
to be a
separate criminal
offence
which
was
pun-
ishable
in
addition
to and not as a
substitute
for
trafficking.
This section
and its
counterparts
were specifically enacted
to
declare
trafficking
and the
possession
of
proceeds
of
trafficking
separate
and
distinct
offences
and to
allow
for
convictions
and
punishment
on
both
of
them.
Finally,
in
Quebec
(Attorney
General)
v.
Laroche,9
the
Supreme
Court
of
Canada defined
the
purpose
of
Part
XII.2
of the
Code
as
follows: "The leg-
islative
objective
of
Part
XII.2
plainly goes beyond mere punishment
of
crime:
an
analysis
of the
provisions
of
that Part shows that Parliament
intend-
ed to
neutralize criminal organizations
by
taking
the
proceeds
of
their illegal
activities
away
from
them. Part
XII.2
intends
to
give
effect
to the old
adage
that
crime does
not
pay"10
The
Supreme
Court
of
Canada identified
the
role
that
the
special search warrants play
in the war on
crime,
for the
Court stated:
...
Part
XII.2
organizes
the
fight against organized crime around
a
strategy that
focuses
on the
proceeds
of
crime,
as
opposed
to the
offender.
As
well,
the
effec-
tiveness
of
that struggle depends largely
on the
speed with
which
proceeds
of
crime
can be
identified, located, seized
and
ultimately
forfeited.
For
that reason,
Part
XII.2
provides
for new
enforcement
techniques
that
enable
the
police
to
freeze
or
immo-
bilize
the
property
of
criminal
organizations
regardless
of
whose
possession
it may be in,
even
before
charges
are
laid.11
8
Ibid,
at
paras.
19—21
[emphasis
added].
9
[2002]
S.C.J.
No. 74
[Laroche].
10
Ibid,
at
para.
25.
11
Ibid,
[emphasis
added].
MONEY
LAUNDERING
AND
PROCEEDS
OF
CRIME
[81]
To continue reading
Request your trial