Finance Committee on March 31st, 2015

[The Chair, Conservative, James Rajotte]

I call this meeting to order. This is meeting number 75 of the Standing Committee on Finance. The orders of the day pursuant to Standing Order 108(2) are a study of terrorist financing in Canada and abroad.

I want to thank our witnesses for being with us here in Ottawa and also from Maryland and from the United Kingdom.

First of all, we have Daniel Therrien, the Privacy Commissioner of Canada. Welcome back to the committee.

Appearing as an individual, we have Ms. Christine Duhaime. Welcome to the committee. Thank you for being with us.

As well, we have Mr. Paul Kennedy, appearing as an individual. Welcome back to the committee.

We have Mr. Christian Leuprecht, associate dean and associate professor at the Royal Military College of Canada.

By video conference from Pasadena, Maryland, we have Mr. Amit Kumar. Mr. Kumar, thank you for being with us here this morning.

From the United Kingdom, we have Mr. Bill Tupman, a professor as well. Thank you so much for being with us here from the U.K.

Each of you will have five minutes for your opening presentation, and then we'll have questions from members.

We will start with Mr. Therrien.

Go ahead.

[Daniel Therrien, Privacy Commissioner of Canada, Office of the Privacy Commissioner of Canada]

Thank you, Mr. Chair and members of the committee, for the invitation to address you today.

The subject of your study, Canada's regime for combatting the financing of terrorism, is clearly a timely one.

As you are aware, in light of Bill C-51 and other recent legislative activity, the past year has seen much public debate about the rules that regulate how information is collected, shared and analyzed by and among our law enforcement and intelligence agencies. Indeed, information sharing is a very important aspect of combatting crime and terrorism. It can also, however, pose risks from a privacy perspective.

Operating under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, FINTRAC is one agency that is a key player in information gathering and sharing, and one that my office has had many interactions with over the years.

As I outlined in my recent submission on Bill C-51, in a country governed by the rule of law, it should not be left for national security agencies to determine the limits of their powers. Generally, the law should prescribe clear and reasonable standards for the sharing, collection, use and retention of personal information, and compliance with these standards should be subject to independent and effective review mechanisms, including the courts.

In this case, the legal standards are established under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act and accompanying regulations, which I find to be reasonable in their current state, as they target individuals and organizations suspected of criminal or terrorist activity or financial transactions of a significant value. This could change as a result of Bill C-51 or other measures currently under consideration that would require the sharing of all electronic transfers regardless of the amounts involved.

In terms of review, the office of the commissioner is mandated to conduct biennial reviews of FINTRAC's personal information handling safeguards, under section 72 of the enabling legislation. We also measure their activities against sections 4 to 8 of the Privacy Act, under our authority to conduct reviews as outlined in section 37 of that act.

While we know that current laws and regulations contain reasonable standards, our audits have found problems with the collection and retention of personal information in excess of these standards. We have found that some of the information shared with FINTRAC related to activities that did not demonstrate reasonable grounds to suspect money laundering or terrorist financing, and that FINTRAC was retaining data that is not relevant to its mandate. This presents an unquestionable risk to privacy by making available personal information for use and sharing that should never have been provided to FINTRAC.

To address this problem, after consulting with FINTRAC, we've prepared guidance for private sector organizations to reduce the risk of overreporting in violation of the risk to privacy. Furthermore, explicit authority under subsection 54(2) of the PCMLTFA, Proceeds of Crime (Money Laundering) and Terrorist Financing Act, as enacted by Bill C-31, was also recently granted to FINTRAC for the destruction of information that is not related to money laundering or terrorist financing. Despite these initiatives, the risk of overreporting and retention remains, and we will be paying particular attention to this issue in our upcoming two-year review.

The risks I've described will increase only if the reporting threshold for electronic funds transfers is dropped to zero, as has been discussed at this committee and elsewhere, and should Bill C-51, which further widens the potential sharing of information, be enacted without amendment.

Finally, let me say a few words about the review.

While our office is obligated to conduct compliance reviews of FINTRAC, we can only examine privacy issues. FINTRAC does not have a dedicated review body to examine their activities to ensure they are lawful, reasonable, and effective.

I conclude by reminding the committee that the lack of a dedicated review for FINTRAC was last raised by the O'Connor commission and that it remains a serious problem.

Thank you. I look forward to your questions.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Therrien.

We'll go to madame Duhaime, s'il vous plaît.

[Christine Duhaime, Lawyer, Duhaime Law, As an Individual]

Good morning and thank you. I have some brief comments and then I'll be happy to take your questions.

I'm going to start my comments where the deputy minister left off when he testified before you a couple of days ago, talking about the FATF. The FATF, as he described to you, is the policy-setting body that mandates policy that countries around the world implement in terms of their national laws to follow anti-money laundering. There are two other parts of that, one of which he discussed, which is counterterrorist financing, and the third part is sanctions law. I bring that to your attention because that's the regime we look at when we think about terrorist financing and the two pieces especially, which are sanctions law, i.e., sanctions avoidance if we're not complying with it, and terrorist financing. Those are the three pillars from which we gauge whether or not financial crimes are being committed in terms of compliance.

The FATF has done a fairly comprehensive job of policy setting for the first one, anti-money laundering policy. There are issues with respect to its ability in providing leadership, guidance, and policy on a responsive level on the other two, namely, counterterrorist financing and sanctions law. I do not know why that is the case, but the evidence is fairly strong that there are counterterrorist financing issues and sanctions compliance issues in this country and around the world. I would go so far as to say that those two regimes, those two pillars, are broken and we need to find solutions to rectify the situation. The reality is that there would not be an Islamic State today or other terrorist activities to the extent that we see growing if our counterterrorist financing laws and our sanctions laws were complied with around the world.

I'd like to make a quick note about digital terrorist financing, as I think this plays into one of the issues we are facing, which is that we have not kept pace with counterterrorism laws. Terrorist financing is not static. One of the issues with the FATF is that for whatever reason, it has not kept pace with counterterrorism. One of the issues with the digital financing regime is that entities like the Islamic State are quite versatile on social media. Not only do they fundraise on that platform, but they upload lots of their propaganda. The more they upload propaganda of horrific acts, the more they get funding around the world for their activities. It's quite a vicious circle and it's quite important that we come up to speed with what the digital financing regime is like and get a grip on that.

For example, the Islamic State uses Twitter quite a lot, but they use other platforms such as JustPaste.it and Ask.fm. Sometimes when we ask law enforcement and counterterrorism officials about those social media sites, they don't have a clue what we're talking about. I think it's important that we understand what Ask.fm is, how it works, what JustPaste.it is, and how organizations like ISIS use them to fund their terrorist activities in this country and elsewhere.

I point that issue out specifically to mention the fact that ISIS has been around for two years now in digital terrorism, and digital terrorist financing for as long, and yet in this country we don't have a digital terrorism strategy or a counter-strategy, and we certainly don't have one with respect to digital counterterrorism.

Let me talk briefly about the enforcement piece because it's an important piece of the puzzle with respect to reporting entities and law enforcement in this country.

In the past couple of years, the enforcement globally has followed the same path as the FATF. By that I mean we are quite strong on anti-money laundering law compliance and enforcement globally, but in this country much less so when it comes to counterterrorist financing and sanctions law. In this country we rarely enforce, investigate, undertake compliance reviews and prosecute for sanctions and counterterrorist financing. By contrast, in the United States they have an exceedingly strong sanctions regime and they enforce it strictly. There's no reason that we can't do the same here.

In terms of solutions, let me say that in my experience there is a great need for dialogue between the public and the private sectors. I hear all the time from both sides which I represent that there is a gap in information sharing. They each want to know what the other is doing. They each want to have more information. They are each vitally interested in combatting terrorism in whatever way they can, but they're lacking a dialogue. They're lacking the tools. They're lacking the communication.

My suggestion is that Canada take a leadership role in counterterrorist financing and sanctions, and that it contemplate putting together some sort of a centre of excellence for us to bring together all of these parties and assure that they have the dialogue that they say they need to counter terrorist financing in Canada and abroad.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

Now, we'll hear from Mr. Kennedy, please.

[Paul Kennedy, As an Individual]

Thank you.

I agree with the principle that access to money is a necessary ingredient of one's ability to conduct criminal and terrorist activity. Denying individuals such access will reduce the harm to society. Ongoing efforts to strengthen and modernize the legislation are necessary to address new technologies and financial practices.

I believe, however, that there is a significant weakness in the government's ability to match enforcement action to the quality of legislation that has been introduced and may, in fact, be introduced. The RCMP, as it is presently constituted, is a municipal, provincial, and federal police service. It has multiple demands placed upon it by a myriad of political masters. Approximately two-thirds of its police officers perform non-federal policing functions. This is the type of policing that is performed by tens of thousands of police officers throughout Canada and does not have to be performed by our federal police force.

The federal government assumes about 30% of the cost of the RCMP policing at the local levels. This commitment not only distracts the RCMP from its federal policing role, but it occasions the development of a recruitment and developmental model ill suited for a police force that is required to successfully investigate a new class of crime. This is the type of criminal activity which includes terrorism and is interprovincial, national, and international in scope. Such criminal actors employ the latest technology and are supported by lawyers and accountants.

Since 2000, the government has invested hundreds of millions of dollars in an initiative to combat money laundering, proceeds of crime, and terrorist financing. How have we done? FINTRAC receives and analyzes 25 million transactional reports annually and provides disclosure of actionable financial intelligence to assist the investigation of money laundering, terrorist financing, and national security threats. Just between 2010 and 2014 it released 2,961 such actionable disclosure cases. Both CRA and CBSA, according to their annual reports to the Treasury Board, have either seized or collected in reassessed tax arrears tens of millions of dollars.

By contrast, the RCMP, but for action taken with respect to drug enforcement activities, which has been a core mandate for many decades, appears to have taken very little action with respect to terrorist financing or non-drug activity. I could find only two references to alleged terrorist investigations, one of which was attributable to undercover work.

The RCMP, as specified in the Security Offences Act, has the primary responsibility for the investigation of terrorist activity. The gap among the serious public harm occasioned by the financing of terrorism, the significant moneys invested by the government in the investigative program, the admirable efforts by FINTRAC, and the weak investigative follow-up by the RCMP should be a concern for all members.

Parliament will be able to give meaning to legislation such as the prevention of financing of terrorism by the RCMP only if the RCMP rededicates itself to its federal policing role and recruits individuals who possess, or trains active members to acquire, the skills essential to address the new type of criminal behaviour that threatens Canadian society. The government should reallocate the 30% federal subsidy in support of contract policing to the federal portion of the RCMP to allow it to better fulfill its federal policing role.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mr. Kennedy.

We'll now to go to Mr. Leuprecht, please, for his presentation.

[Dr. Christian Leuprecht, Associate Dean and Associate Professor, Faculty of Arts, Royal Military College of Canada, As an Individual]

Good morning. Thank you for inviting me to appear before you this morning.

I'll talk about context, problems, and what to do.

First is the distinction, of course, between terrorist financing and money laundering. The challenge with terrorist financing is that much of the money is legal and it's used for illicit purposes. I have several documents here that I didn't enter into exhibits because they're not translated, but I'd be happy to share them with the members. One is an empirical study that maps some of the networks to show that financing and recruitment networks are very different and so they require different strategies. We're a diverse country, so there's a lot of interest by various forces around the world to try to obtain money in Canada. That's well documented. It's a long-standing issue dating back as long as the IRA, but also with regard to Sikhs and Tamils.

We have a financial tracking agency, a financial intelligence agency, that does a terrific job by all accounts, but it's extremely difficult to extract any sort of intelligence from that agency. All you need to do is to talk to other agencies around town. Trying to get anything out of FINTRAC is exorbitantly difficult. We have an obligation, under UN Security Council resolutions 1373 and 1624, and in the 2014 resolutions 2178 and 2195, to do a lot more about terrorist financing. I would remind the committee that those are chapter 7 resolutions, so they are binding on all members of the United Nations.

The problems in particular are intelligence sharing by FINTRAC and coordination issues. I have an article here of empirical survey evidence to demonstrate that there is a significant amount, albeit small...but we can demonstrate a significant amount of sympathies to finance such organizations within Canada. This is published peer-reviewed work.

As was pointed out, there is a significant delta between what happens empirically in Canada and the actual convictions. In terms of extraterritorial convictions, we don't have any, as far as I know, with regard to money laundering. We don't have any that I know of with regard to tax evasion. We only have one case, as far as I know, with regard to terrorist financing. That dates back to 2010. That case was essentially like taking candy from a baby, so I wouldn't consider that one a particularly great success.

We know what the Hezbollah networks look like, but it seems we have great difficulty doing anything about them. We know that within the RCMP we lack the skill set to do complex financial investigations. As was just indicated, there's a serious challenge here with regard to building the professional development and skill set capabilities to actually prosecute. We can survey everything that happens in terms of financial intelligence, but we seem to have a great deal of difficulty doing anything about it. Just changing laws won't do much if we can't actually change the capacities.

We have the problem of morphing violent extremist organizations. I've submitted to the committee a brief paragraph with regard to north and west Africa. It shows how organizations regularly change their names. We have great trouble in our listing regime actually keeping up with these organizations as they split and as they change their names, so we're constantly playing catch-up. It takes us years to catch up. As far as I know, the Taliban weren't listed until 2012 as a terrorist entity in this country.

We have organized crime connections to terrorism. I have submitted, without going into detail, a four-page note on that particular issue. It's a bit more tenuous and a bit more difficult to demonstrate empirically, and yet we do have evidence out there. I list that in the submission. There's the risk of extortion, as we know from Tamil communities. There are export flows that inherently support violent extremist organizations. I've documented that in a separate peer-reviewed article with regard to the Canada-U.S.-based terrorist networks. Most of them don't try to do bad things in either of our countries; they try to export a whole bunch of stuff to the rest of the world. We have an obligation to make sure that we do our part, that we don't inadvertently support terrorist activities elsewhere.

There's the great challenge of microfinancing. People are trying to raise a couple of thousand bucks to get on a plane and go abroad. What we have is a changing picture with regard to terrorist financing. However, the terrorist financing today, with regard to ISIS, as was mentioned, is now largely either state-sponsored and/or own-source revenue. There's less going on in terms of people actually trying to raise funds here directly except for the opportunity to go overseas.

What needs to be done? We need to think about the listing regime and making our listing regime much more efficient. I have specific propositions with regard to that.

We need to perhaps think about listing specific individuals abroad, but that gets us into the problem that even terrorists go to the dentist. Just because you transfer money to an individual abroad who might be listed, it might be difficult to demonstrate that the money is used for terrorist purposes.

We need to learn a lot more from our allies. The United Kingdom has a system whereby they essentially can search passengers on an entire plane, yet in Canada the CBSA has no outbound mandate. The RCMP's jetway activity is only land-based, and the RCMP doesn't have any money dogs. Again we have these coordination issues.

I think we need to get rid of the threshold for electronic funds transfers altogether. I can demonstrate to you mathematically that it makes no sense to have these thresholds, because it vastly increases the number of false positives. We should either have it set by ministerial discretion or by FINTRAC rather than picking arbitrary thresholds of x thousand dollars.

What do we need to be looking at? In sum, we need to be looking at the disconnects within our own government. We need to be looking at the motivations and at why we don't have more motivations to actually prosecute in this country. We need to be looking at the methodology, and in particular learn from the methodology that many of our allies have implemented. Besides the U.K. example, I can give you a dozen other examples of how other countries go about some of these measures.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll now go to Mr. Kumar, please, for five minutes.

[Dr. Amit Kumar, Senior Fellow, Anti-Money Laundering Association]

Thank you, Mr. Chair and members of the committee, for inviting me to discuss terrorist financing in Canada and abroad. In my time today, I will highlight certain key threats that Canada and the rest of the world face as regards terrorist financing. I will outline a few steps that the Government of Canada, in cooperation with its international partners, can take to help mitigate these threats.

As the juggernaut of ISIS rolls on unabated, and as al Qaeda and its affiliates across the world show renewed vigour, terrorist financing threats are on the rise. ISIS is flush with funds, and its reliance on criminal methods and donations from rich individuals to fund its operations has become all too obvious. Simultaneously, the heightened activity of al Qaeda affiliates like Boko Haram and AQAP, as well as Lashkar-e-Taiba and the Taliban, all of whom are well financed thanks to their exploitation of criminal sources of money and misuse of charitable organizations alike, is causing great concern to the democratic denizens of Canada and the international community.

A key factor that allows the aforementioned terrorist organizations to thrive is their ability to launder the proceeds of their criminal activities towards terrorist financing ends and purposes. Often in concert with criminal organizations, as well as on their own, these terrorist groups have been able to finesse the craft of money laundering in order to disguise the sources of their income from the ultimate destination that this income is bound for, and that is towards perpetrating terrorist acts, setting up and administering new affiliates and cells, and the training, recruitment, and online radicalization of terrorists.

An alarming trend is the global nature of the movement of terrorist funds, which not only tends to misuse the international financial system, but also makes it very difficult to trace these funds and to prosecute and convict those engaging in the nefarious acts of perpetrating, financing, and facilitating the terrorism that we in the civilized world all love to hate.

Given the seemingly intractable task and mission of stemming the flow of terrorist funds and their use to launch terrorist attacks, what can Canada along with the global community do to mitigate the terrorist financing threat?

First, it's important to recognize that terrorists succeed by moving men, money, materiel, and messages across the world. Hence, a broader and more expansive scope of material support to include men, money, materiel, and messages should be adopted by the comity of nations in order to make more informed and effective choices in exercising the countering of financing of terrorism tools of sanctions, investigations and enforcement, regulations, and outreach.

Second, given the free movement of money, men, materiel, and messages in this day and age of the internet, ISIS, al Qaeda, and their acolytes are not limiting their theatres of operation and fundraising activities only to Iraq, Syria, and the broader Middle East, but they are also extending them to north Africa, west Africa, southwest Asia, south Asia, Europe, etc. ISIS-inspired attacks in Paris, Ottawa, and Oklahoma are a case in point. So is the heinous attack by French citizen Mehdi Nemmouche in Brussels, Belgium, as is the combined training activities of Boko Haram, al Qaeda, and ISIS in Mauritania. Foreign terrorist fighters may perpetrate terrorist acts not only in their home countries; therefore, any counterterrorist finance strategy should not limit itself to Iraq, Syria, and immediate neighbours, as has been the wont of the international community for the past year or so.

Third, given the serious online radicalization, fundraising, and recruitment threat that ISIS presents, it's imperative to work with social media companies to take down incendiary videos and websites that train impressionable persons in bomb making, invite radical thoughts and beliefs, and lionize those who commit atrocious terrorist acts. Present efforts under way to bring in legislation in Canada to address this issue are a step in the right direction. Of course, it is hoped that these legislative initiatives will balance the needs of security with those of free speech and the privacy concerns of citizens.

Fourth, while there has been a lot of debate in the past several years about the functioning and effectiveness of FINTRAC—and by all accounts its performance has considerably improved—not much has been spoken of in terms of the dire need for two-way information sharing between law enforcement agencies and FINTRAC. This two-way information sharing would further improve the effectiveness of FINTRAC and the quality of its financial intelligence products.

Fifth, while targeted sanctions against the al Qaeda and Taliban regimes by the UN are a noteworthy name and shame deterrence phenomenon, and the capacity-building initiatives of the UN Security Council resolution 1373 regime have gained high praise, their effectiveness of implementation, as well as their impact at stemming terrorist financing have yet to be assessed. The Government of Canada, which is actively engaged in funding and facilitating the countering the financing of terrorism capacity-building programs through the UN and its agencies, may like to request information from both the al Qaeda and Taliban monitoring team and the counterterrorism executive directorate with regard to the effectiveness of implementation and the impacts of UNSCR 1267 and UNSCR 1373, respectively.

It is hoped that these thoughts and recommendations will help the committee in its examination of terrorist financing in Canada and abroad going forward.

In closing, thank you, Mr. Chair and members, for this opportunity to discuss this issue. I welcome your questions.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation, Mr. Kumar.

We'll now go to Mr. Tupman, please, for your five-minute presentation.

[Prof. Bill Tupman, Professor, BPP University / University of Exeter, As an Individual]

Thank you, Chair.

The first point I'd make is that if you really want a longer presentation from me, I did a lecture tour of Australia a couple of years ago and you can see a YouTube video of my doing a 40-minute presentation, with jokes, on the mix of terrorist financing, but I'm going to spare you the jokes and the 40 minutes. For the sake of the interpreters, I'm going to try to make six or seven quick points.

The first point is that my present interest is the increasing overlap between terrorism and organized crime, that they are engaged in very similar sorts of activities, that they are both networked and organized as networks rather than as Weberian pyramids, and that they are primarily cellular.

My second point is that we need to remember that most terrorist operations now are self-financed. The cell finds its own financing for the particular operation. There is seed core financing for what we might call spectaculars, and for setting up an organization for the purposes of recruitment. If we're going to talk about terrorist financing, we need to recognize those differences.

My third point is that states are back as terrorist financers. There was a period when it appeared that we were dealing with organizations that were non-state actors. As things have changed over the past five years, increasingly the big organizations are being funded by states. I'm not going to name them because I don't know whether I'm under the Chatham House Rule or whatever, but they're fairly widely known, and if you're going to stop terrorist financing you need to address the question of those states.

My fourth point mirrors something one of the earlier speakers said. We're dealing with a series of new technologies. Social media represents one of those technologies, but we also need to remember there are alternative forms of payment, such as bitcoin, and there are all sorts of money substitutes used in games, like Second Life. An awful lot of attention by the security services is focused in the wrong place. We don't need gathering of general social media. The bad guys have now gone to Tor; they've gone to the deep web where the pedophiles are and where all sorts of dissidents hang out. We need to know a lot more about how to investigate what's going on there.

My fifth point is that again over the last five years we've seen the rise of the terrorist accountant. It sounds like a contradiction in terms. Accountants are supposed to be terribly dull people and terribly worthy, but accountants are now very important in assessing businesses for the tax or extortion they're going to pay to the terrorist organization. We need to remember that not just banks lend money, but also accountancy firms and firms of solicitors. We need to pay more attention to the accountancy profession.

My sixth point again mirrors something somebody else has said. The most important thing is better trained investigators. We have enough laws. We don't need more laws; we need more competent investigators to produce evidence and prosecute. One of the big traces you need to follow is, who is now dealing with the suspicious activity records? Is anything being done with them? Are they genuinely being analyzed, or are they just piling up on a computer somewhere?

My seventh point is that we should remember the objective of countering terrorist financing is the same as the objective of all counterterrorism. It must reduce the number of terrorists.

If we use blunt instruments that hit non-terrorist targets that hit spectators, we will end up increasing the number of terrorists.

My final point is the Islamic State point. The Islamic State since it captured Mosul has access to large funds and doesn't really need to raise a lot of money elsewhere, but it's also able to sell oil. We need to know where that oil is going, we need to track it, and we need to make sure the money is not getting back to them.

Those are my eight points. Thank you very much for listening. I will enjoy taking questions.

[The Chair, Conservative, James Rajotte]

Thank you very much, Professor Tupman.

We will begin members' questions, colleagues, with Mr. Cullen, for six-minute rounds.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

A great deal of thanks to all our witnesses this morning. With this panel, we don't have enough time to get through what we would probably like to get through just by the quality and expertise of the six of you who are here.

Very quickly, Mr. Leuprecht, I want to get this balance. We've been trying to understand, particularly with regard to ISIS, ISIL, how much of their money is coming from donations from people in North America or Europe versus how much of their money they have secured from extortion from the banks they have seized, from the sale of oil as Mr. Tupman has alluded to.

Do you have any awareness of that?

[Dr. Christian Leuprecht]

Inherently concrete numbers are hard to come by, but we do have a good British and a good Australian report I can share with you on that.

In principle, the ISIS phenomenon is one of individuals in the region and own-source revenue, and less one of ISIS going abroad, but the challenge of focusing on ISIS is that, for instance, we miss all the activities in North Africa that I outlined for you.

In that regard, I want to stress what the Department of Foreign Affairs does, in particular, under Canada's counterterrorism capacity-building program and the anti-crime capacity-building program, which is primarily active in the Caribbean. I think these are very important efforts in making sure this phenomenon doesn't spread and that we reinforce capacity.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Thank you.

Mr. Kennedy, something Mr. Tupman said seemed to reinforce what you were saying with regard to capacity. There's an indication of new and broader powers for CSIS and for others that is being debated right now and moving through the amendment stage.

Laws are what they are, but if there isn't capacity to follow through on the laws, then they are simply something else other than an intent to actually change things.

What is the RCMP's current capacity? You have a great deal of expertise in this. What has their experience been in terms of tracking down and pursuing?

[Paul Kennedy]

I'll give you some background. I prosecuted complex drug cases, tons of materials. We didn't have the laws in place to seize the proceeds so I advocated that. For five years, I actually ran the proceeds of crime and money laundering program at the Department of Justice, and I led as an ADM at the then Solicitor General the creation of FINTRAC and the proceeds of crime units, so I'm in it big time.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

You're in it. Are we doing it, is the question when it comes to terrorism—

[Paul Kennedy]

Well, that's the problem. When I have looked at the file, I can't find any files. There's one little Hamas-connected thing.

I also led the initiative for the charities. That worked, because we didn't want the government financing terrorists through tax receipts. You look at a lot of institutions that violence was occurring in in Canada that were charities...that has disappeared, so that has worked.

When I looked at the proceeds of crime forfeitures since 2000 by the RCMP, it's about $243 million. If you break that down, it's about $17 million a year. That tallies what our experience was with the moneys we were collecting associated with drug trafficking.

I'm looking at it, and I think it is all drug trafficking. That data that you need to make that collection is incidental to your drug investigation, so it doesn't require a sophisticated analysis of the kind of data you would get from FINTRAC. I suspect if you looked at those 2,900 that I talked about just in the last four years from FINTRAC, what were the values, because their data will tell you what the value and what the counts are, and what has been acted upon by the RCMP.

I would suspect next to nothing. They don't have the skill set for it.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

In all of this not knowing, which Parliament doesn't know, it's part of our challenge just in terms of what's being done and not being done.

I'll turn to Mr. Therrien for a moment about oversight.

You said in your opening statement that it should not be left to national security agencies to determine the limits of their powers.

Are there other countries in the G-7 or the OECD that allow their national security agencies to determine their own limits of power?

[Daniel Therrien]

On that point, I'm not sure about an international comparison, but in terms of oversight of national security agencies writ large, whether for terrorist financing or other activities, Canada certainly has a number of review bodies for the RCMP, for CSIS, and for the Security Establishment. As far as FINTRAC is concerned, the only review body that exists is myself, the Privacy Commissioner, and my mandate is limited to determining whether privacy laws are being respected.

For instance, on the question of the effectiveness of the gathering of information and whether it leads to true enforcement action, there is no review body to consider these issues.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

So we don't have the review body now. What is being proposed is to greatly expand the powers of CSIS, and it has been suggested that we lower the limit for an investigation, and some are saying to zero dollars. I'm not sure who raised the point—I think it was Mr. Leuprecht—about lowering it to such a point that the net is cast widely, particularly as the definition of terrorism is also going to be expanded to inhibiting economic interests. What will be the net impact with no oversight of expanding the power and the information sharing of privacy information on what we're trying to get done here, which is stop international terrorism?

[The Chair, Conservative, James Rajotte]

Just a brief response on that, please.

[Daniel Therrien]

I guess my concern is that in gathering massive amounts of information to identify suspicious transactions, government receives, analyzes, and retains for long periods a lot of information about law-abiding citizens.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Thank you.