CANADIAN REACTION TO THE U.S. TERRORIST FINANCING

UNCLAS SECTION 01 OF 02 OTTAWA 002060 SIPDIS SENSITIVE SIPDIS E.O. 12958: N/A TAGS: CA PTER EFIN SUBJECT: CANADIAN REACTION TO THE U.S. TERRORIST FINANCING TRACKING PROGRAM REF: A. SECSTATE 103650 ¶B. OTTAWA 1978 ¶C. MOHLER-BREESE EMAIL 6/28/06 (NOTAL) ¶1. (SBU) SUMMARY In response to June 23's U.S. press articles disclosing the existence of the Terrorist Financing Tracking Program, the press reports that Canada's Office of the Privacy Commissioner has decided to investigate whether the USG improperly obtained the banking records of Canadians. The GOC is taking the matter seriously, but will wait for the Privacy Commissioner's report before taking further action. With these privacy concerns in mind, the GOC is still aware of its international obligations to combat money laundering and terrorist financing. End Summary. Privacy Commissioner to Investigate -------------- ¶2. (U) In the wake of press reports on the formerly classified U.S. Terrorist Financing Tracking Program, the local press reported that Canada's federal Privacy Commissioner is investigating whether U.S. officials and the CIA were improperly given access to the banking records of Canadians. A spokesperson for the Privacy Commissioner noted that privacy concerns are raised anytime a foreign government obtains the personal information of Canadians because that information may not be protected by the same privacy protections in place in Canada. It is unclear, however, what steps the Privacy Commissioner can take beyond making recommendations to halt any exchange of information due to her limited power to investigate anything that happens outside of Canadian territory. At this point no one involved with the Canadian banking system will say what Canadian financial data, if any, the U.S. authorities may have seen. ¶3. (U) The Prime Minister's Office has not commented on the issue. According to Finance Minister Jim Flaherty, the GOC is taking the issue seriously, but is waiting for the Privacy Commissioner to report before acting further. Despite the privacy concerns, the GOC remains mindful of its obligations as members of the international community to combat money laundering and terrorist financing. ¶4. (U) The media has raised questions about Bank of Canada Governor David Dodge's knowledge, beginning in 2002, of the U.S. government's interest in obtaining data from the international "SWIFT" bank transaction system for use in the global war on terror. Dodge, like other central bankers around the world, does not appear to have raised any red flags about the matter in the past four years. He declined to comment on the matter. ¶5. (U) FINTRAC, Canada's financial intelligence unit, has been receiving information about some transactions in the SWIFT network for four years, but gets its information from Canadian banks and other Canadian institutions that are required to report suspicious transactions as well as international transfers of more than $10,000. FINTRAC does share information with its U.S. counterpart, FinCEN, although in a way that is controlled by Canadian legislation that has limits and balances to protect privacy. A spokesperson for FINTRAC said that the organization recognizes the value of the data in the analysis and production of financial intelligence, especially in areas such as money laundering Qintelligence, especially in areas such as money laundering and terrorist financing. Support for the Investigation -------------- ¶6. (U) Overall, many Canadians are troubled merely by the suggestion that banking information about Canadians may be falling improperly into the USG's hands. That possibility alone, they say, is reason enough for the federal Privacy Commissioner to conduct an investigation. Moreover, the secret nature of the program and the potential for abuse that SIPDIS comes with it adds to their concern. Some Canadians believe the USG may be handling the information fairly and appropriately, but the lack of oversight and public disclosure makes it difficult for them to reach a conclusion. OTTAWA 00002060 002 OF 002 ¶7. (U) A number of prominent Canadians are also expressing their concern. John McCallum, finance critic for the Liberals, and former Royal Bank of Canada senior executive, told the press that the disclosure of the U.S. Program would fly in the face of Canadian law and banking practice. He said that Canadians should be anxious about these allegations and supports the Privacy Commissioner looking into the matter. David Flaherty, former information and privacy commissioner for British Columbia, shares McCallum's sentiments. He said told the press that if the U.S. government has "legitimate national security or law enforcement reasons to look at Canadian records, there are ways of doing that through (Canadian) privacy legislation." He also supports the Privacy Commissioner's investigation. Visit Canada's Classified Web Site at http://www.state.sgov.gov/p/wha/ottawa WILKINS