MONEY LAUNDERING LEGISLATION TABLED

OTTAWA - Ottawa is proposing a new law that will discourage
criminals from laundering dirty money within Canadian borders. Ottawa
tabled long-awaited legislation Monday in the House that would plug
some big holes that allow up to $17 billion laundered in and through
Canada every year.

Other G-8 countries have tougher rules that make money laundering more
difficult.

The bill would make it mandatory for financial institutions to report
any suspicious transactions and require people to declare large sums
they're bringing across the border or risk having them seized until
Canada Customs is satisfied they're not proceeds of crime.

"The areas the legislation will address are the two major deficiencies
that a lot of critics have raised," said Mario Possamai, president of
FIA International Research Ltd.

Money launderers in Canada can charge less for their services than
those in the United States because the risks are lower here, said Possamai.

The legislation will likely jack up the price of laundering because
the risks will be higher.

While it will take a bigger bite out of drug and contraband profits,
the new law won't necessarily mean there will be less laundering in
Canada, said Possamai.

"As long as you have large drug trafficking organizations . . . and a
demand for contraband tobacco and alcohol, the criminals who operate
those rings are going to need money laundering services.

"It's a very important tool in fighting crime, but it's not going to
address underlying crimes."

RCMP Sgt. Andre Guertin said police welcome any tools to fight
organized crime.

The legislation would create an analysis centre, an independent
government body to collect and analyse information about suspicious
transactions and cross-border money movement. It would then make that
information available to police.

The agency would also watch financial institutions - including banks,
currency exchange dealers, casinos and others - to make sure they
comply with the legislation.

Gene McLean, director of security at the Canadian Bankers Association,
said the sector supports the legislation and is willing to comply.

Banks have for some time been voluntarily reporting suspicious
transactions to police, said McLean.

He pointed out there will be costs involved in making the practice
mandatory, including buying software and hardware, generating
reporting forms and training employees.

Ottawa was under pressure to introduce the legislation under
commitments it made at an international task force on money laundering
and last year's G-8 summit.

It will take awhile for the legislation to become law, but Ottawa will
be able to report progress to the G-8 meeting next month in Germany.

A 1991 law only requires financial institutions to keep records of
cash transactions over $10,000 for five years.

Ottawa released a consultation paper one year ago on
changes.

"The money laundering bill has been in the works forever," said Reform
critic Jim Abbott.

"I have no idea why it's taken so long."