The B.C. government has amended legislation to crack down on “unexplained wealth” in the province, nine months after a public inquiry into money laundering released its findings.
Public Safety Minister Mike Farnworth announced changes to the Civil Forfeitures Act on Thursday to create unexplained wealth orders (UWOs), which require people suspected of unlawful activity to explain how they acquired their assets.
“This useful tool improves the process for gathering evidence that well may lead to forfeiture,” Farnworth said.
“Additional amendments will make it easier to access information from other public bodies, target financed vehicles and the illegal cannabis market, and end the limitation period on forfeiture hearings.”
Farnworth said a number of “guardrails” are in place to ensure the new process is fair. Information provided in response to a UWO, for example, cannot be used in criminal matters.
He told reporters he is confident the new legislation will withstand a court challenge, with similar legislation already in place in Manitoba. The province also considered similar laws in Ireland, New Zealand and the U.K. before drafting its own, he added.
Farnworth identified $75,000 as the “base limit” for starting to look for a UWO.
Funds from assets seized under the legislation will be reinvested into communities, including crime prevention and victim services programs. It will also be used for victim compensation.
“Unexplained wealth orders also support our Safer Communities Action Plan,” Farnworth added.
“One of the main drivers of repeat violent offences is the toxic drug crisis, which is fuelled by organized crime. Unexplained wealth orders will help us go after the proceeds of criminals profiting off this misery.”
The amendments announced Thursday are based on recommendations from the June 2022 findings of the Cullen Commission of Inquiry into Money Laundering in B.C.
In the report of more than 1,800 pages, the commission found that while the government, police and federal anti-money laundering agency didn’t do enough to stop the crime, it did not detect evidence of corruption.
The commission identified “staggering” levels of money laundering, and what Cullen himself described as a “failure of will” to deal with it.
Earlier this month, Premier David Eby expressed frustration that the multi-year investigation fell flat against an alleged transnational gangster. A special prosecutor appointed to review the RCMP’s massive, multi-year E-Nationalize investigation declined to move ahead with charges against accused money launderer Paul King Jin.
The investigation found that Jin — identified only as X in the legal filings — moved millions of dollars in and out of the country for clients, sometimes in the form of bank drafts or casino chips.
“It’s probably shocking to British Columbians that you can have somebody in our province accepting suitcases full of bundled bills, operating an unlicensed, illegal so-called money services business, receiving that money clandestinely, and that after teams of prosecutors have reviewed that conduct that there is no criminal charge they can find that they can proceed with,” Eby said at the time.
“Obviously there’s a serious problem with the federal criminal law that allows this conduct to continue in our province. I have communicated that on a number of occasions to the federal government and to their credit they have made some changes since we started engaging.”
Since the Cullen Commission findings were published, the province has introduced new rules for mortgage brokers, giving the BC Financial Services Authority the ability to make rules for the industry, as non-traditional lenders emerge, and more people turn to brokers and online technology to arrange residential mortgages.
One of the pending changes would increase fines to a maximum of $500,000 for those caught breaking the rules, while those with more than one conviction could face fines of up to $2.5 million. The province has estimated the earliest those new rules could be introduced is late 2023.
— with files from Global News’ Simon Little and The Canadian Press
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