Cablegate: Canadian Reaction to the U.S. Terrorist Financing

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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.

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