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Canada targets hawala and terrorists' financing

Canada has intensified efforts against illicit flow of money through non-banking channels to curb financing of terrorists.

india Updated: Jul 09, 2006 00:13 IST

Canada has intensified efforts against illicit flow of money through non-banking channels (hawala) and money laundering to curb financing of terrorists, its Finance Minister Jim Flaherty said.

Canada has joined the Asia-Pacific Group on Money Laundering, a regional body with 31 members, including India, the US, Japan and Australia; this week and would host an international organization that tracks money laundering, he said on Friday.

Flaherty said the Egmont Group, formed in Brussels in 1995, would be headquartered in Toronto, and five million dollars would be spent over the next five years to help it to set up a permanent office in the country's financial capital.

The Group brings together more than 100 investigation units, including those from the US, Cayman Islands and Korea. Its members share information about suspicious financial transactions that may be linked to terrorist cells.

In addition to providing base to Egmont Group, a Canadian would be taking over the presidency of the Financial Action Task Force, an international body that has been developing standards for choking funding for terrorists, he said.

"We live in a world where the threats of terrorism and international criminal activity are ever-present. Fighting back means being vigilant, relentless and more resourceful than our enemies," Flaherty said.

Canada has long been a fundraising base for several major terrorist groups, from the Irish Republican Army and Hezbollah to the Tamil Tigers and Babbar Khalsa, which was responsible for the 1985 Air India bombings.

Since anti-terrorism was added to its mandate in 2001, the Financial Transactions and Reports Analysis Centre has detected hundreds of millions in suspect banking. Last year, FINTRAC reported that 180 million dollars in suspected terrorist financing had occurred in the previous year, up from 70 million dollars the year before.
FINTRAC director Horst Intscher said "a substantial sum" of terrorist-related banking transactions had been found by his staff last year and that he believed the figure for 2006 would surpass last year's total.

Efforts to disrupt various financial schemes that underwrite terrorism have become an international priority since the attacks of 9/11.

Canada plans to introduce legislation at the "earliest opportunity" to strengthen FINTRAC's intelligence-collection efforts, Flaherty said.

"When we choke off the lifeline of the financing and the support of terrorism, we choke off terrorism itself," Public Safety Minister Stockwell Day said.