FATF says Canada should strengthen prosecution of complex money laundering cases The Financial Action Task Force urges Canada to improve risk-based supervision and prioritize investigation and prosecution of major money laundering cases, while Canada's finance minister points to the planned Financial Crimes Agency. Canada should strengthen its investigation and prosecution of sophisticated money laundering cases, the Financial Action Task Force said on Tuesday. The report followed an evaluation that began in November. It found that despite strong investigative capacity, Canada struggles to prosecute professional money laundering, especially in standalone cases. The FATF said the country should improve the effectiveness of risk-based supervision. It also urged Canada to prioritize investigation and prosecution of complex money laundering cases in line with its risk profile. According to government data, between 45 billion and 113 billion Canadian dollars, or 32 billion to 80 billion U.S. dollars, is laundered in Canada each year.Money laundering linked to drug trafficking and fraudMoney laundering in Canada is mainly linked to proceeds from drug trafficking, fraud, commercial trade fraud and tax crimes. These activities often involve organized crime groups and professional money laundering intermediaries, the FATF said. The report said Canada faces material money laundering risks driven by major profit-generating crimes. It added that Canada has taken steps to strengthen enforcement against illicit finance.However, the FATF said the risk-based approach to Canada's anti-money laundering framework limits the country's ability to fight financial crime when risks are lower. The FATF awarded Canada a compliant grade and noted improvements compared with its previous report in 2016. The watchdog also recommended actions Canada should complete within three years. Those recommendations include strengthening risk-based supervision, focusing on investigating and prosecuting major money laundering cases, and recovering criminal assets.Major banks and new agency under reviewReuters reported last year that interviews during the review process included the big six banks. That reporting came months after TD Bank paid the largest-ever fine to settle a U.S. money laundering case. The review also coincided with new indictments against former Canadian Olympic snowboarder and alleged cocaine kingpin Ryan Wedding. Finance Minister Francois-Philippe Champagne said the planned Financial Crimes Agency will improve Canada's capacity to combat complex financial crimes.Champagne said the report validates the steps Canada has already taken to meet global standards and maintain a robust anti-money laundering system. He said Canada will review and adopt the FATF's recommendations in a statement. Canada, a G7 nation, remains under pressure to show it can pursue complex cases from start to finish. The FATF's findings put new focus on supervision, prosecution and asset recovery.