On June 15, 2022, the Cullen Commission of Inquiry into Money Laundering in British Columbia released its Final Report, which totalled 1,804 pages. This report followed the completion of 133 days of evidentiary hearings, where nearly 200 witnesses provided evidence on money laundering in various sectors of the BC economy.
The BCCLA was an active participant in the Cullen Commission and the only civil liberties organization granted full participant status. From February 2020 to October 2022, the BCCLA participated in Commission hearings, where we questioned witnesses and advocated for human rights, privacy protections, and due process.
The BCCLA has reviewed the Final Report, and overall, we are very disappointed. The Final Report calls for sweeping changes to tackle money laundering in the province, including the introduction of unexplained wealth orders, the aggressive pursuit of civil forfeiture, increased policing, and broad information collection and sharing. In our closing submissions, the BCCLA spoke out against taking this kind of tough-on-crime approach to money laundering, arguing that these invasive measures undermine constitutional rights, have not been adequately tested, and would be expensive to implement. The BCCLA advocated instead for addressing the root causes of money laundering, including our failed model of drug prohibition.
While we were quite disappointed by the Final Report, there are some positive aspects. For example, the BCCLA was pleased that Commissioner Cullen acknowledged the racist stereotypes being perpetuated in the public discourse about money laundering. We were also pleased that the Commissioner has recommended that the Civil Forfeiture Office should no longer be self-funded.
Below, we summarize some key human rights issues raised by the Final Report and provide our perspective on these issues.
The Final Report calls on BC to pursue civil forfeiture more aggressively and to invest more heavily in civil forfeiture to fight money laundering. Commissioner Cullen specifically recommends that the Civil Forfeiture Office should “significantly expand its operational capacity by adding investigators and analysts capable of identifying and targeting unlawfully obtained assets and instruments of unlawful activity beyond those identified in the police file.”
The BCCLA is profoundly concerned by this recommendation. As we argued in our closing submissions, civil forfeiture grants extraordinary power to the state, undermines Charter rights, and hinders access to justice. Civil forfeiture allows the government to take property even if the owner has not been convicted of a crime. To make matters worse, there is a complete lack of credible evidence that it is an effective tool for fighting money laundering. There is also evidence demonstrating that civil forfeiture disproportionately impacts marginalized communities, including individuals living on the Downtown Eastside. We are extremely disappointed that the Final Report calls on BC to ramp up civil forfeiture. We strongly oppose any expansion of BC’s deeply problematic civil forfeiture regime.
Having said that, we are pleased that Commissioner Cullen has recommended that the Civil Forfeiture Office should no longer be self-funded. We asked the Commissioner to adopt this recommendation in our closing submissions. A self-funding model can create perverse incentives for public authorities to use civil forfeiture laws to benefit their bottom lines rather than to fight serious crime.
Unexplained Wealth Orders
We are deeply troubled that Commissioner Cullen has recommended the adoption of Unexplained Wealth Orders (UWOs) in BC. UWOs are a controversial legal tool that requires a person to explain the source of their wealth and allows for their wealth to be confiscated if they cannot provide sufficient evidence that it was lawfully acquired. UWOs undermine privacy rights, the presumption of innocence, and the right to silence. They have only been adopted in a few countries, and there is no credible evidence that they have been effective.
In recommending the adoption of UWOs, Commissioner Cullen noted that he was “strengthened in [his] view that unexplained wealth orders are a viable solution”  because a legal opinion prepared for the Commission by the Honourable Thomas A. Cromwell, CC concluded that a United Kingdom-style UWO regime would pass constitutional muster in Canada. The BCCLA made submissions in response to the Cromwell Opinion, noting that the utility of this opinion was quite limited, particularly given that no one was given the opportunity to question the Honourable Mr. Cromwell. Further, we highlighted that the Cromwell Opinion concluded that even a UK-style UWO regime “would give rise to a number of Charter issues” which would limit their usefulness. In light of this, we are very disappointed that the Commission has relied on the Cromwell Opinion to recommend the adoption of a draconian and controversial legal tool in BC.
Conflating Foreign Money and Dirty Money
One positive aspect of the Final Report is that it acknowledges the role of racism in public discourse about money laundering in BC. In our closing submissions, the BCCLA raised concerns about the disproportionate focus on Asian people in public rhetoric about money laundering and the harm this can do to Asian communities. We noted that this discourse has led to the scapegoating of “foreign buyers” and the widespread belief that housing has become unaffordable due to “Chinese money laundering.”
The BCCLA’s perspective on this issue was reflected in the Final Report. Commissioner Cullen acknowledged that “ideas have developed in the public discourse that promote generalizations about the involvement of ethnic or racial groups in money laundering activity in British Columbia. There is, for example, a theory that money laundering by Chinese criminals in the housing market in the Lower Mainland has contributed to a housing unaffordability crisis.” However, based on the evidence, Commissioner Cullen concluded these stereotypes were unfounded. Indeed, he determined that “low supply, high demand, and low interest rates are the drivers of housing unaffordability in British Columbia” – not money laundering or foreign investment.
Commissioner Cullen also recognized the dangers of unduly focusing on China in public discourse about money laundering and the risks of conflating “foreign money” with “dirty money”:
I share Professor [Henry] Yu’s concerns about our public dialogue becoming infused with racist stereotyping. There are legitimate policy questions relating to foreign ownership of real estate in the province. Those questions should be addressed on their merits. They should be decided on the basis of sound policy and evidence. They should not engage “us vs. them” dynamics and must take care not to stray into treating any ethnic community as presumptively dishonest or unlawful. It is important to be aware of and avoid racism, whether it is glaring and obvious, or inadvertent and subconscious.
Privacy and Information Sharing
The Final Report presents information sharing as a “key component of any anti-money laundering strategy” and recommends many proposals to increase information collection and sharing in a manner that would unnecessarily undermine privacy rights.
For example, Commissioner Cullen has recommended the adoption of safe harbour provisions which would allow financial institutions to share information about potential money laundering without exposing them to liability. As we noted in our closing submissions, such provisions are unnecessary as privacy legislation already allows for information sharing for the purposes of fighting money laundering in appropriate cases. Safe harbour provisions unduly erode privacy protections by encouraging further information-sharing and providing blanket protections against liability.
We are also disappointed that Commissioner Cullen has recommended the creation of an Anti-Money Laundering Commissioner to facilitate strategic and tactical information sharing and to analyze and aggregate data collected from multiple sources. In our view, surveillance is not the solution.
We are pleased that the Final Report acknowledged the BCCLA’s concerns with Project Athena – a public-private partnership between law enforcement, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) and banks to fight money laundering in casinos. Commissioner Cullen wrote: “I share the BC Civil Liberties Association’s concern about the potential for tactical information-sharing partnerships – such as Project Athena – to circumvent the requirements of section 8 of the Charter and undermine established constitutional rights.” However, despite acknowledging these serious concerns, the Final Report nonetheless encourages significant tactical information sharing between law enforcement and public and private entities.
The BCCLA is also pleased that the Commission has rejected suggestions to grant FINTRAC real-time access to all financial transactions in Canada. The BCCLA was strongly opposed to this proposal because it would undermine FINTRAC’s independence and violate section 8 of the Charter by allowing law enforcement to engage in suspicionless searches. Consistent with the BCCLA’s submissions, the Commissioner criticized FINTRAC for their poor track record of turning a high volume of suspicious transaction reports into low quality actionable information. Given this disproportionate and ineffective disclosure regime, the Commissioner properly concluded that FINTRAC could not be relied upon to provide timely, proactive intelligence. Crucially, the Commissioner acknowledged that providing law enforcement with direct and real-time access to FINTRAC databases engaged constitutionally recognized privacy interests, and concluded that law enforcement could not “realistically expect” to receive such unfettered access to this level of information.
The Commissioner’s consideration of privacy interests in the FINTRAC context is a rare bright spot, overshadowed by the fact that the Commissioner has seen fit to erode those privacy interests elsewhere throughout the Final Report by recommending drastic expansions to formal and informal information sharing arrangements between public and private entities and law enforcement.
Policing and Enforcement
The BCCLA is very concerned by the recommendation to create a specialized provincial intelligence and investigation unit to combat money laundering. The new unit, whose mandate would be to identify and disrupt sophisticated money laundering operations, is lauded as a way to significantly combat organized crime. The Commissioner acknowledged the BCCLA’s serious concerns with this proposal, and we remain concerned that the Commissioner has nevertheless made it a key recommendation in his report.
Specialized police units have failed to make an impact in combatting money laundering. Experience has shown that staffing, structural, and resource issues have hindered those units’ ability to be an effective or efficient means of fighting money laundering. For the Commissioner to contemplate a “significant investment by the Province” to establish a new unit without remedying the serious issues that have arisen in previous units is a worrying oversight. It is unreasonable to expect that an infusion of resources, including a proposed “cadre” of experts, will result in a different outcome without first addressing the underlying reasons why these units have been unable to retain their core investigative officers. The Commissioner has acknowledged that this provincial unit will encounter some redundancy with the federal investigative unit, and this is an additional issue that has not been adequately addressed.
The BCCLA has repeatedly emphasized that appropriate responses to money laundering must consider the impacts on the rights and liberties of individuals. With its recommendation for a new dedicated provincial unit, however, the Commission has fallen far short. The Commissioner is clearly alive to the fact constitutional issues may arise as the proposed unit seeks to fulfill its mandate. However, the Commissioner has elected to ground the unit on an implicit expectation that it will operate within constitutional limits.
The BCCLA is also troubled by the Commissioner’s view that the early days of Project Athena may serve as a “useful” model for approaching the Charter issues that could arise. Indeed, it is concerning that the Commissioner views Project Athena as “one of the most important anti-money laundering initiatives in recent years”. As noted above, the BCCLA has raised serious constitutional concerns with this public-private partnership. The Commission had the opportunity to invite, or retain, constitutional experts to speak to these concerns. For the Commissioner to make such an impactful recommendation with only a cursory acknowledgement of the associated Charter issues is deeply disappointing.
The BCCLA combed through 1,804 pages so you don’t have to. Our position is that the Final Report’s findings and recommendations not only miss the mark on tackling money laundering but also threaten the human rights and civil liberties of people across BC. Despite a few encouraging aspects, the Commission has overall recommended a tough-on-crime approach that is cause for significant concern.
 Final Report, pp 8-9.
 Final Report, p. 1614.
 BCCLA Closing Submissions, pp. 3-12.
 Final Report, pp. 1614-1615.
 BCCLA Closing Submissions, p. 10.
 BCCLA Closing Submissions, p. 10.
 Final Report, p. 1618.
 See BCCLA Closing Submissions, p. 12.
 Final Report, p. 1618.
 Final Report, Appendix I, p. 1748.
 Final Report, Appendix I, p. 1748.
 BCCLA Closing Submissions, pp. 38-42.
 Final Report, p. 1624.
 Final Report, pp. 967, 1624.
 Final Report, p. 996.
 Final Report, p. 226.
 Final Report, p. 1008.
 BCCLA Closing Submissions, pp. 30-31.
 Final Report, p. 227.
 Final Report, p. 947.
 Final Report, p. 209.
 Final Report, p. 1558.
 Final Report, p, 1549.
 BCCLA Closing Submissions, para. 50. Final Report, p. 1546.
 Final Report, p. 1551.
 Final Report, p.1549.
 Final Report, p. Recommendation #91.
 Final Report, p. 1553.
 BCCLA Closing Submissions, para. 131.
 IIGET and JIGET have both faced resourcing, structural, and staffing issues, see BCCLA Closing Submissions, paras. 116, 121.
 Final Report, p. 1555.
 Final Report, p. 1561.
 Final Report, p. 1557.
 BCCLA Closing Submissions, para. 9.
 Final Report, pp. 1558, 1561.
 Final Report, p. 1559.
 Final Report, p. 1532.
 Final Report, p. 1515.
 Final Report, p. 1558.