Pubdate: Thu, 05 Oct 2006
Source: Globe and Mail (Canada)
Copyright: 2006, The Globe and Mail Company
Contact:  http://www.globeandmail.ca/
Details: http://www.mapinc.org/media/168
Author: Steven Chase

DIRTY-MONEY CRACKDOWN DUE THIS WEEK

OTTAWA -- The Harper government plans legislation this week to 
strengthen Canada's ability to fight terrorism financing and money 
laundering -- on the heels of a federal watchdog's report that the 
value of suspected dirty cash it uncovered last year had doubled to $5-billion.

Yesterday, the Financial Transactions and Reports Analysis Centre of 
Canada, known as Fintrac, said the $5-billion in suspicious 
transactions detected in its 2006 operating year includes more than 
$250-million in suspected terrorist-financing.

The overall figure is more than double the $2-billion uncovered last 
year and terrorist funding is up 40 per cent from the previous year.

The six-year-old agency said it's uncovering more dirty cash because 
it has grown experienced at detecting it and because it deliberately 
sought out larger-scale schemes last year.

A Senate report this week estimated tens of billions of dollars of 
illicit money is laundered in Canada each year.

Fintrac director Horst Intscher declined to offer his own estimate 
but said he believes plenty of activity remains undetected.

"I don't know how high or how deep this runs. But it's nowhere near 
maxing out," Mr. Intscher said.

Ottawa already requires many professions that handle large 
transactions to keep records on clients and to report any cash 
transactions of more than $10,000.

Finance Minister Jim Flaherty is expected to table a bill today or 
tomorrow that further toughens anti-money-laundering and 
terror-financing rules. Mr. Intscher said he believes the legislation 
will contain "pretty much most" of the recommendations laid out in a 
June 2005 Finance Department paper.

Proposed Changes Included:

Requiring dealers in gold, diamonds, precious stones and jewellery to 
keep tabs on clients and report suspicious transactions.

More strict monitoring of electronic money transfers.

Requiring banks and other financial institutions to report any 
attempted suspicious transactions, rather than only completed transactions.

Adding politicians, judges, military leaders and other "politically 
exposed persons" to the list of those whose financial dealings will 
get further scrutiny.

Registration of money service businesses such as currency exchanges, 
remittance companies that send cash overseas and firms that issue money order.

Establishing fines that can be slapped on those failing to comply 
with anti-money-laundering rules, as well as a process to publish 
scofflaws' names.

Asked if Fintrac has detected al-Qaeda financing activity in Canada, 
Mr. Intscher said his agency has probably filed reports to 
authorities on "all of the major suspected terrorist groups."

He said the most common form of terrorist-financing activity in 
Canada is fundraising and personal canvassing, where groups "go 
around knocking door-to-door in their communities. It looks like 
legitimate fundraising and then it's deposited in accounts and 
consolidated in other accounts."

Money laundering methods tends to vary by the underlying criminal 
activity that generated the illicit funds, Mr. Intscher said. 
Investigators find drug-trafficking money often ends up being 
converted to another currency. Telemarketing fraudsters rely on wire transfers.

He said a hot laundering trend is Internet payment systems through 
on-line services that are largely unregulated. Fintrac will be 
analyzing these to see if it can find ways to learn more about the 
transactions.

In total last year, Fintrac tipped police and security agencies to 
168 suspected money-laundering and terrorist financing cases in its 
2006 operating year, up nearly 20 per cent from 142 a year earlier.

Mr. Intscher said bigger-scale money laundering has grown very good 
at "mimicking legitimate financial behaviour" but Fintrac's growing 
database is helping the agency detect anomalies.
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