Ottawa to crack down on money laundering

Law would see transactions over $10,000 reported

By Derek Ferguson
Toronto Star Ottawa Bureau

OTTAWA The federal government is stepping up its battle against
money laundering by organized crime gangs, SolicitorGeneral Andy
Scott says.

His officials are working on a system under which it would be
mandatory to report suspicious financial transactions, Scott said
yesterday.

``This system will not only address moneylaundering concerns, but
also provide law enforcement with additional intelligence information
with which to fight organized crime.''

Scott made his comments in a speech to the CanadaUnited States
crossborder crime forum, which has drawn together about 100
representatives from more than a dozen provincial, state and federal
law enforcement agencies.

In 1994, a U.S. state department report rated Canada as a major
moneylaundering centre with up to $12 billion in drugrelated money
passing through financial institutions annually.

Under Scott's proposed legislation, any financial transaction over
$10,000 would have to be reported to authorities.

Such a requirement is already in effect in the United States, where
the state department's 1994 report slammed Canada for lax
moneylaundering regulations and few prosecutions.

Canada's current moneylaundering regulations fall under the Proceeds
of Crime Act, and require financial institutions to store records and
documentation involved with cash deposits of $10,000 or more for five
years so that they are available to police upon request.

Later, United States AttorneyGeneral Janet Reno called on both
countries to increase cooperation in the battle against international
crime.

``If we train with the latest information on money laundering, and
then expand it and share our intelligences, and understand where our
money is going on this continent and in this hemisphere, and then plan
together how we can interrupt that laundering, I think we can make
such a tremendous difference,'' she said in her speech to the forum.

LEGAL LIMITATIONS

But Reno said with the advent of the telecommunications revolution,
money laundering and smuggling are increasingly becoming the tip of
the iceberg.

``The crooks are ignoring our borders,'' she said, adding the personal
computer and the Internet are already ushering in a whole new era of
consumer fraud.

She said to combat this, policing cooperation ``must go beyond the
narrow strips of our borders'' and embrace shared information
technologies.

Scott later told reporters that details of his ministry's proposed
legislation has yet to be worked out, but one of the major issues is
balancing the rights of individuals with the powers of policing.

``I'm very conscious of those kinds of (privacy) issues, and finding
the balance between the things that we have to do to help the law
enforcement agencies to prevent crime . . . in a way that is
consistent with Canadians' values,'' he said.

But Scott said while police agencies are rightly hampered by such
concerns, it is nonetheless frustrating that criminals are not.

``We're confined by borders and jurisdictions and a whole series of
legal limitations . . . that criminals just don't have to attend to,''
he said.

``So, consequently, it's particularly important that we get levels of
government together . . . to collaborate on our approach to dealing
with it.''

RCMP Supt. Yves Juteau said yesterday that Scott's proposed bill
tracking suspicious transactions will be a tremendous asset.

``It's the newest, and we feel probably the most effective, tool that
we are going to have against organized crime,'' said Juteau, who
represented the Royal Canadian Mounted Police at the conference.

``It makes it a little bit of an easier way to monitor the
transactions that are done across borders,'' he said, adding not just
transactions between Canada and the U.S. but with all countries are to
be monitored.

Juteau said the best way to fight organized crime is to get after the
assets that fund it.