Finance Ministry Issues Dictate in response to North Korean money laundering Worries

OTTAWA _ Canadian financial institutions are ordered to treat what few transactions they run with North Korea with greater diligence since the federal government attempts to boost stress on the nuclear-armed country.

Finance Minister Bill Morneau softly issued the directive past month after concerns that the North Korean authorities was skirting international sanctions through money laundering and other illicit financial activity.

The amount of monetary transactions between Canada and North Korea is very small due to these sanctions, and also the federal government enforced in August 2011.

But financial institutions will finally have to treat those who are allowed, which include remittances worth significantly less than $1,000 and legal assistance, as possible instances of money laundering and report them to the authorities.

The move comes as Canada prepares to get a meeting with allies in Vancouver a week, even in which the main issue is finding ways to further squeeze the Korean authorities and also get it to give up its own atomic program.

The talks will set a significant emphasis on stopping North Korean money laundering as well as smuggling by sea, ” which U.S. officials have suggested could involve taking actions against North Korean shipping.

Finance Canada deputy spokeswoman Jocelyn Sweet explained the directive came after the Financial Action Task Force raised concerns about _ and advocated that a tougher line against _ North Korean money laundering in November.

The task force is an worldwide body of 35 countries, including Canada, the U.S., both China and Russia, that is tasked with analyzing and developing steps to combat money-laundering and terrorist funding.

Analysts have cautioned that the North Korean government uses money laundering and other illicit financial activity to develop its own nuclear-weapons program, that has been resisted from the Paris-based job force.

“The directive complements Canada’s strong sanctions regime set up against (North Korea) and reinforces Canada’s public statements identifying North Korea as a empowerment of concern,” Sweet said in an email.

Morneau’s order is largely symbolic, said Garry Clement, a retired RCMP officer and current vice-president of the Association of Accredited Financial Crime Specialists, and seems designed more for other nations on board.

Not only does Canada have restricted financial ties to North Korea, ” Clement said, however Canadian banks and other associations are closely scrutinizing any trades with the Asian nation for decades.

The issue therefore isn’t with Canada, but states like China that have been considerably less strict _ and in some cases already implicated _ in money laundering with North Korea.

“That’s the only way you’re likely to tighten up this,” Clement said. “So unless nations like China, like Iran and everyone came on the same page, it is quite hard to shut down global flows”

The U.S. recently sanctioned several companies and individuals in China, after years of complaints about money-laundering and illicit commerce with North Korea.

China, that wasn’t invited to next week’s Vancouver assembly, has begun to crack down on illicit North Korean funding along with smuggling, Brian Hook, director of policy to U.S. Secretary of State Rex Tillerson, told reporters on Thursday, however more is expected.

“We have been very clear with them about the actions we want them to carry against individuals or entities under management that are … assisting or facilitating or supporting North Korea’s nuclear and missile program,” he explained.

“We’ve asked them to take action. They’ve taken actions in some regions.”

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