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RUEATRS/DEPT OF TREASURY WASH DC

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