Canada’s failure to act against transnational crime is imperiling US national security

The magnitude of the Oct. 7 attacks has prompted Israel to draw up plans for a “new security reality”, encompassing the threat that the Iranian regime and regional proxies like Hamas and Hezbollah pose to its existence. The Netanyahu government has also stepped up its anti-terror financing efforts and seized significant funds intended for use by these terror groups.

However, while Israel has woken up to that grave reality, the same cannot be said about Canada as it lags noticeably behind, particularly in its efforts to curb terror financing and transnational crime.

A recent report by the International Coalition Against Illicit Economies (ICAIE), a national security non-governmental organization based in Washington, D.C., paints a concerning picture of Canada, noting that the country has not only become a “safe zone” for terror groups but also lacks the political will to tackle transnational organized crime and other foreign influence activities.

The report, marked ‘Urgent Attention and Action are Needed’, noted that Canada serves as a “money laundering safe haven” for these groups and their criminal networks. It also referred to the country as a “thriving hub” where criminal actors from Iran, Russia, Mexico, and China conduct illicit activities worth billions of dollars, including the laundering of money and trafficking in drugs, weapons, and other contraband.

Calvin Chrustie, a former Canadian intelligence officer and Senior Partner at the Critical Risk Team who testified at the Cullen Commission inquiry into money laundering in British Columbia, confirmed with me that foreign money has regularly been laundered through Canada since the mid-2000s, disproportionately by Iranian and Chinese criminal networks.

“Every time we saw senior drug cartel guys fly into Canada, they almost exclusively met with Middle Eastern individuals who we had identified as targets and most often they were Iranians because they were the ones controlling the money, besides the Chinese.”

Much of this illicit activity was exposed during the recent high-profile trial of disgraced senior Royal Canadian Mounted Police (RCMP) official, Cameron Ortis, and the aforementioned Cullen Commission inquiry. During these hearings, several cases were highlighted showing how Canadian nationals and Canada-based underground currency exchanges helped Iran evade sanctions and facilitated the financing of Hezbollah and Hamas’ terror operations, including via social media and cryptocurrencies.

These illicit activities in Canada haven’t gone unnoticed by the United States. David M. Luna, former U.S. diplomat and executive director of the International Coalition Against Illicit Economies (ICAIE) told me the U.S. “remains concerned” about Canada being used as a transnational crime hub for Iranian regime-backed proxies to finance terrorism in the Middle East and around the world.

“These illicit operations can adversely impact U.S. national security through potential direct attacks against Americans in our homeland or targeted against U.S. armed forces in the Middle East as we are witnessing today in Israel, Yemen, and Iraq.”

The events of Oct. 7 are not just a wake-up call for Israel, but also for the West. Last month alone, several attacks across Europe were foiled. Police in the UK made more terror arrests in the two months following Oct. 7 than in all of 2022. Already wary of the Hezbollah threat in Latin America, the U.S. remains on high alert to deter the entry of Islamist militants through its southern border. Recent terror arrests in Calgary and Ottawa show that Canada is no less vulnerable to these threats.

The U.S. and the UK today announced they have targeted an Iranian transnational assassinations network with links to Canada. This is in addition to last week’s major announcement that the U.S., UK, and Australia have sanctioned Hamas-affiliated financial networks with ties to Chinese bank accounts and funds from the Islamic Revolutionary Guard Corps (IRGC), proving yet again that Ottawa’s political inertia and incompetence in the face of escalating terror threats is not only undermining Canada’s status as a serious country but also causing its Five Eyes allies to exclude it from high-profile initiatives.

Behnam Ben Talebu, senior fellow at the Foundation for Defense of Democracies, a Washington, D.C.-based research institute, said, “Countries like Canada which are yet to proscribe or sanction the entire Islamic Revolutionary Guard Corps (IRGC) under their terrorism statutes are likely to be exploited by the Islamic Republic as jurisdictions for transnational criminal activity. Aligning the West’s targeting of Iran and its terror network is more urgent today than ever before.”

At a time when global security is threatened by the convergence of multiple Islamist terror threat vectors like never before, the Trudeau government needs to wake up from its political slumber. Israel learned the dangers of complacency the hard way on Oct. 7. It would, therefore, be in the U.S.’ best interests to pressure Canada to get its act together while there is still time.

Joe Adam George is a research analyst and writes on foreign policy and national security issues for the Macdonald-Laurier Institute, a Canadian policy think tank.