TERRORISM FINANCE: OTTAWA - 2005 UPDATE NO. 2 -

C O N F I D E N T I A L OTTAWA 000680

SIPDIS

EB/ESC/TFS (DAVID NELSON),EB/EPPD (CAROL THOMPSON),S/CT
(TODD KUSHNER),IO/PSC (JOLEEN SCHWEITZER),WHA/CAN
TREASURY (JUAN ZARATE)
OFAC (ROBERT WERNER)

E.O. 12958: DECL: 02/25/2006
TAGS: KTFN KVPR EFIN PTER ETTC PREL CVIS CA
SUBJECT: TERRORISM FINANCE: OTTAWA - 2005 UPDATE NO. 2 -
EMBOFF ROLE

REF: SECSTATE 32688

Classified By: DCM John Dickson. Reason: 1.4 (e).


1. (SBU) Following please find Embassy Ottawa's response to
reftel questions on terrorist financing.

(A) Amount of assets frozen, forfeited or seized (in US
dollars) by host government pursuant to UNSCR Resolutions
1267 and 1373, the legal authority under which the action
was taken (legislative, judicial, administrative,
regulatory); and what additional domestic actions have
been taken against the designated parties.

-- Canada has ratified all the UNSCRs on terrorism, enforces
all UN resolutions, and is active in international fora
working to stem terrorist financing.

As of January 1, 2005, slightly more than C$114,000 (about
US$90,000) is frozen in 14 accounts in Canadian financial
institutions. The value of frozen assets fluctuates as
financial institutions review their records in light of new
information.

This value is the total sum frozen pursuant to regulations
under the UN Act, namely, the United Nations Afghanistan
Regulations, the United Nations Suppression of Terrorism
Regulations, and the Criminal Code of Canada provisions put
in place in 2001.


(B) What impediments exist for more robust cooperation
with your host government on co-sponsoring designations?

-- No substantive impediments. Frequent and coordinated
communication between USG and GOC officials, in capitals and
in international fora such as the G-7 and FATF, facilitate
cooperation.

(C) Is your host government willing to accept USG training
and technical assistance, including an assessment of
training needs? In your view, what are your host
government's priority training and technical assistance
needs with regard to the development and/or enhancement of
their anti-terrorist financing regimes in general and
their sanctions program in particular?

-- Not applicable to Canada.

However, Canada would probably be willing to provide training
and technical assistance to other countries in the context of
programs under a multilateral umbrella such as FATF.

(D) How would you rank your host country in terms of risk
that it will be used as a site either for significant fund
raising or for significant banking services for terrorists
("High," "Medium," or "Low")? "Significant" means raising
or banking tens of thousands of dollars. Please provide a
brief justification for your opinion, including references
to intel or other reporting, as appropriate.

-- Risk of al-Qaeda related fundraising in Canada is low,
comparable to the risk of similar activity in the U.S. The
GOC's notification system is quick and effective; the
financial system is sophisticated; and financial institutions
are vigilent in due-diligence regarding money laundering and
possible terrorist-related transactions.

Although Canada has taken steps to bring its terrorist list
into closer conformity to the U.S. list (designating the
"welfare" arms of Hamas and Hizballah, for example) there are
still discrepancies that could permit funds to be raised for
terrorist organizations. The most prominent example would be
the Tamil Tigers.


2. (U) Questions on cooperation with Canada to counter
terrorist financing may be addressed to Lucy Abbott, First
Secretary Finance and Economics, at 613-688-5226 or

SIPDIS
abbottlk@state.gov.

Visit Canada's Classified Web Site at
http://www.state.sgov.gov/p/wha/ottawa

CELLUCCI