Canada checks the post

Canada’s banks have declared themselves willing to assist the US authorities crack down on illicit cashing of US postal orders but they have also asked for further information that will help them to assess whether money laundering is involved. There is no suggestion that the banks have broken any Canadian laws. Representatives from the Canadian Bankers Association, the leading banks and the Royal Canadian Mounted Police met recently with officials from the US Postal Service and the US Department of Justice. The Canadians requested details of the volumes of money orders that have been cashed on Canadian territory and the locations in order to identify potential target branches. The orders, which are marked “negotiable only in the US”, cost 80 cents each; they are sold in denominations of up to US$700 and US$3000-worth may be purchased without the need to show identification. Typically such laundering involves a team of “mules” or “smurfs”. In order to avoid the customer identification checks they will make numerous visits to large numbers of post offices, often over several days, and gradually build up or “structure” a batch of orders with a high total value. The US authorities say that they cannot explain why Canadian bank clerks have been prepared to cash the orders and are keen to halt the practice. The banks insist that the US Postal Service must ensure that its staff also work to prevent the abuse, for example, by actively checking with purchasers whether they intend to send an order outside the US. However some observers have suggested that any clampdown on the US orders will only serve only to increase the criminal use of US international money orders which are not much more expensive.