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