Finance Committee on March 31st, 2015

[Prof. Bill Tupman]

It's exactly the same; it's just very difficult to access.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you very much.

My next question is for Mr. Kumar.

Can you explain the difference between dealing with ISIL and dealing with al Qaeda? How has financing changed, and how does dealing with these two groups differ?

[Dr. Amit Kumar]

Thank you, sir, for your question. It's an excellent question. We keep on wrestling with this day in and day out.

ISIS' origins are with al Qaeda in Iraq. ISIS is the new name of al Qaeda in Iraq, as a matter of fact.

We've had problems dealing with al Qaeda financing. Obviously, the U.S. and Canada and all the international partners have been attacking al Qaeda central and trying to choke off its finances with a good degree of success. But what that led to was the splintering of al Qaeda, the rise of al Qaeda affiliates, cells, and smaller groups, and so on which to a large extent were self-sustaining. We were just on the verge of dealing with that problem, and then we had ISIS, formerly called al Qaeda in Iraq, spring up.

What is happening within the financial and logistical relationships among affiliates, thanks to technology in a great measure and to YouTube and social media and so on, is that there has been an increasing level of interaction between affiliates. Our measures of targeted sanctions, while they may have been successful in some measure against al Qaeda central, are difficult to apply against al Qaeda affiliates and ISIS, which is an al Qaeda affiliate of sorts but has relationships across the board with many affiliates.

That's why you see Boko Haram aligning with ISIS, and a segment of the Tehreek-e-Taliban in Pakistan and Afghanistan aligning with ISIS. ISIS is in a way the new al Qaeda, but in my research and my sense of this terrorist organization, they are not too different. It's just that, going with the times, ISIS has adopted, as one of the witnesses said, a more outsourced financing paradigm.

One thing that I want to mention and bring to the committee's attention is the shift, whether in FATF or at the national level, and even within the UN, to risk-based application of anti-money laundering and countering the financing of terrorism, and also the stress on effectiveness.

I think Ms. Duhaime very rightly said that we lack convictions and lack prosecutions. What has to happen really is.... The banks need information from the government also. It can't be a one-way track, whereby the financial sector has to give information to the government.

As I mentioned, one of my recommendations is that, if there is a two-way information flow, the banks are better informed to look for what is suspicious and what is not. Going by the risk-based modelling, banks know their vulnerabilities and the government knows the threats, and risk is a function of vulnerabilities, threats, and consequences. If the public and private sectors come together, risks can be, I would say, compared with vulnerabilities. We can have a risk mapping, a vulnerability mapping, and a threat mapping. That way a risk-based, more informed, and more focused effort could ensue.

Thank you.

[Andrew Saxton, Conservative, North Vancouver, BC]

Thank you very much.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Saxton.

Mr. Dionne Labelle, go ahead.

[Pierre Dionne Labelle, NDP, Rivière-du-Nord, QC]

Thank you, Mr. Chair.

Several layers of crime are involved. We have organized crime, tax evasion and, now, we are dealing with another layer—terrorist financing.

I noted a few of your recommendations, which are very relevant. For instance, you recommended creating a review committee for FINTRAC and a centre of excellence for anything that has to do with technology and money transfers on technological platforms, such as analytical grids and so on.

I think the boldest suggestion came from Mr. Kennedy, who proposed a complete overhaul of Canadian police services. Is that pretty much what you are asking us to do?

[Paul Kennedy]

Yes, definitely. There is a famous expression, I think by Will Rogers, which says that you might be on the right track, but if you don't start moving, you're going to get run over.

What we had was a model from the 1950s with the RCMP out west. The western provinces at that time, as they were lightly populated, were not necessarily prosperous. Ontario and certainly Quebec have their own policing. You have to ask yourself, why, in a prosperous province such as British Columbia, do we still have 7,000 RCMP officers out there doing this kind of work? Some of the unfortunate problems the RCMP has had are due to the poor financing that is there.

As chairman of the commission dealing with public complaints against the RCMP, I dealt with a shooting case that resulted in a fatality. Mr. Cullen, I am sure you are very familiar with the Ian Bush case. When the officer went into his station, there was no one there at that time, not a soul. The officer had somebody he had arrested, and he was talking to him. To record what happened, he had to take, at the time, a video cassette recorder, put it in, and activate it, which hadn't been done. It only looked one way.

In another model, in Burnaby, B.C., when you walk into that station, there are motion detector cameras, CCTV, that record everything that transpires. There is a shooting and a lengthy inquiry as to what happened. Why? Because not only are they frequently undermanned there, but they are underfinanced and don't have the latest technology. You'll probably see other comments in terms of shootings that occur where they do not have the proper equipment.

The RCMP's reputation is attacked in many areas. The resources are being rededicated to visible crime, which is crime on the street that people are concerned about. The officer you hire and train to do that is not an officer you can use for the sophisticated crime that I am talking about.

If you can have municipal policing in Edmonton, Calgary, and these places, why is the RCMP in some of these areas? Get them out of there. Don't distract them. Let's have a national police force that deals with complex crime that can't be addressed. It can be done. It has been done. We should be doing more of it. We have to save the RCMP from itself, because it is wedded to this model that, I think, is killing it.

[Pierre Dionne Labelle, NDP, Rivière-du-Nord, QC]

Thank you, Mr. Kennedy.

I would like to wrap up by asking a question about the United Nations.

Mr. Kumar, you question the effectiveness of the UN action in terms of combatting terrorist financing. What kind of a role do you recommend Canada play within the UN to make its counter-terrorism efforts more effective? Does Canada have a clear role to play in that area? Is there somewhere we should be focusing our energy such as a specific committee or framework?

[Dr. Amit Kumar]

Thank you so much, sir, for the question. It's a great question.

I would advocate essentially two committees to look at. One is the 1267 al Qaeda committee and its related Taliban committee, which is the 1988 committee, and the other is the counterterrorism executive directorate, which is the 1373 directorate.

Canada, by virtue of the funds and expertise that it has lent to the UN counterterrorism efforts over many years, and its active support for that, has to be asking the questions. The people of Canada and the people's representatives really deserve answers, and the Government of Canada does, too, from the UN in terms of two metrics.

What are the impact metrics? What impact have the 1373 measures and the 1267 measures had on stemming or controlling terrorist financing? That's one.

The other is in terms of asking the 1267 monitoring team, the al Qaeda-Taliban monitoring team, as well as the counterterrorism executive directorate, for information on the effectiveness of implementation. Effectiveness of implementation and impact are very important. With all these tax dollars spent, the people, as well as the government and the people's representatives, deserve answers to that.

Those are two committees, and two questions to ask of each committee.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Dionne Labelle.

Unfortunately, we are bumping up against time here.

Ms. Duhaime, I want to follow up with you on your comments on sanctions law as the third pillar that is not operating well.

We don't have a lot of time. Can you briefly expand on your criticism there and what should be done? If you want to follow up in writing to me, you can certainly do that as well.

[Christine Duhaime]

I'd be happy to follow up.

The sanctions regime in Canada is its own separate animal, but it's still what we include in our analysis of financial crime with the banks, screened for when they are looking at transactions. Because it's its own separate little animal, for lack of a better word, it isn't heavily scrutinized in terms of compliance with the enforcement agencies and there aren't a lot of prosecutions.

Fortunately though, our sanctions laws are a really effective tool and they too have a listed entity type of regime like we do for terrorist organizations. If we were to actually implement that a bit more effectively, we would see a decrease in terrorist financing and money laundering, quite frankly.

[The Chair, Conservative, James Rajotte]

I appreciate that. If there is anything further you want to add to that, I would be pleased to receive that and distribute it to all the members. That goes to all of our witnesses. If there's anything further, and a number of you mentioned reports, please do submit them to the clerk, and we will ensure that all members do receive copies.

I want to thank you so much for this very interesting session. To the witnesses here in Ottawa, thank you, and to those in the U.S. and the U.K., thank you so much for joining us by video conference.

Colleagues, very briefly, you have a motion in front of you. I'm sorry, I should have given you more notice. We don't have to deal with it today unless it's okay with everybody, but I'm happy to deal with it after the break if members would rather deal with it after the break.

Mr. Saxton.

[Andrew Saxton, Conservative, North Vancouver, BC]

I think the most important thing is that the people who actually gave those statements are okay with it.

[The Chair, Conservative, James Rajotte]

Absolutely, they are okay with it, yes.

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

That was my question as well and if they are, then I think the committee should be fine with this for our report.

[The Chair, Conservative, James Rajotte]

All in favour of this motion?

(Motion agreed to)

The meeting is adjourned.