Canada’s financial intelligence agency is warning that Russians subject to economic sanctions due to Moscow’s attack on Ukraine could try to evade them using shell companies, cryptocurrency and real-estate transactions.
The Financial Transactions and Reports Analysis Centre also says in a new special bulletin that those seeking to launder the proceeds of crime and corruption might try to hide assets by transferring ownership to family members or close associates.
The federal centre, known as Fintrac, tries to detect money laundering by sifting through a steady stream of transaction data from banks, insurance companies, securities dealers, money service businesses, real estate brokers, casinos and others.
Fintrac then discloses intelligence to police and security partners for use in their investigations.
Canada has sanctioned hundreds of Russian individuals and organizations over Moscow’s 2022 invasion of Ukraine, prohibiting financial dealings linked to Canada.
Fintrac’s bulletin says Russian organizations and individuals looking to disguise ill-gotten money are known to use complex networks of corporate structures in various jurisdictions to mask their involvement in the international financial system.
“Such structures include shell and front companies designed to obscure ownership, sources of funds and the countries involved in the financial transactions.”
These shell companies, often registered to addresses in offshore financial centres or tax havens, might have minimal or no online presence, Fintrac says.
“Entities may have corporate names that are overly generic, non-descriptive or easily mistaken with that of a better-known corporate entity. Additionally, the corporate name may be regularly misspelled in different ways.”
Fintrac says other possible characteristics of suspicious transactions include:
_ the involvement of legal firms, including company service providers based in offshore financial centres that have historically specialized in Russian clientele;
_ use of Canadian financial institutions as a transit point for international money laundering;
_ financial institutions or their intermediaries connected to the Russian payment system known as SPFS, after several Russian banks were removed from the SWIFT payment-messaging system;
_ use of real-estate transactions for money laundering purposes, particularly in jurisdictions such as the United Arab Emirates and Turkey.
Suspicious Russia-linked virtual currency transactions could be initiated from or sent to Internet Protocol addresses in Russia, Belarus or neighbouring jurisdictions with weak anti-money laundering systems, Fintrac says.
“Open source analysis of cryptocurrency transactions indicates that Russian entities and individuals represent a disproportionate share of cryptocurrency-enabled crime, including online fraud and ransomware.”
© 2023 The Canadian Press
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