Canada’s Weak Oversight Helps Criminal Networks Move Drugs Into US Criminal organizations are exploiting gaps in Canada’s banking and legal systems to carry out operations that help fuel the fentanyl epidemic in the United States, according to U.S. investigators and former officials. With Chinese triads and Mexican cartels collaborating to move drugs south and launder money north, American officials are calling out Canada for not doing more to stop it.
David Asher, who helped lead investigations at the State Department under President Donald Trump, said these syndicates have set up command centers in Canadian cities. Chinese criminal leaders are believed to control the laundering of proceeds tied to drug sales in the U.S., often working through Canadian banks.
TD Bank came under heavy fire in the U.S. after pleading guilty to facilitating large-scale laundering schemes. The bank agreed to pay over $3 billion in penalties after authorities said it allowed criminal groups to deposit enormous sums of drug money without proper checks, and in some cases, aided the process directly.
Beyond bank failures, Canada’s justice system has also been criticized for making it harder to build major cases. Under the Stinchcombe precedent, law enforcement must turn over most investigative details early, which U.S. agents say gives criminals a head start in avoiding arrest or prosecution.
The U.S. recently upgraded its approach to targeting Mexican cartels by labeling them foreign terrorist organizations. With that change, any entity handling cartel money — including banks in other countries — can face penalties tied to terrorism financing laws.
President Donald Trump has cited this pattern of Canadian inaction as one of the reasons for new tariffs that will take effect on April 2. The administration has expressed frustration with Canada’s failure to control its border and combat organized criminal activity that impacts U.S. national security.
Illegal marijuana grown in Canada has also become part of the problem. Authorities say large quantities are trafficked into U.S. markets, sometimes laced with fentanyl, and the profits are funneled through Chinese laundering networks operating from within Canada.
