This week’s briefing covers significant enforcement actions and evolving policy responses in AML and financial crime globally and in Canada.
The European Public Prosecutor’s Office led coordinated searches targeting a suspected €46.9 million VAT carousel fraud involving electronic goods across multiple EU countries, uncovering additional potential VAT losses of €24.2 million. In Canada, Peel Regional Police charged two men allegedly linked to MS-13 in a human trafficking investigation involving sexual exploitation and intimidation in the Greater Toronto Area, with ongoing inquiries into further victims.
An internal FINTRAC report assessed with strong confidence that many Canadian cash-to-cryptocurrency brokers knowingly facilitate money laundering, sanctions evasion, and drug proceeds integration. Weak or deliberately opaque customer due diligence and recordkeeping, failure to report large or suspicious transactions, and misrepresentation to banks were noted. Despite revoking 161 registrations and referring intelligence to law enforcement, no criminal charges have been laid against these operators to date.
The FATF highlighted rapid growth and criminal exploitation of decentralised finance (DeFi), noting that 93% of jurisdictions have yet to implement FATF Standards for DeFi and only two have licensed such arrangements. Separately, the EU’s AML Authority finalized standards for supervisory cooperation with national authorities to directly oversee significant cross-border financial institutions from 2028, aiming for harmonized and proportional AML supervision.
A U.S. House Financial Services Subcommittee reviewed FinCEN’s AML and fraud prevention efforts, noting interdiction and recovery of substantial funds and enhanced targeting of organized crime and transnational fraud. However, criticisms focused on outdated SAR and CTR thresholds, excessive compliance costs estimated at $52 billion annually, and privacy concerns regarding FinCEN’s beneficial ownership database, reflecting ongoing tensions between enforcement effectiveness, regulatory burden, and data privacy.
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