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Canada Makes a Grand Escape</A>
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Canada Makes a Grand Escape
Reuters
8:00 a.m. May. 8, 2000 PDT

OTTAWA -- The Bank of Canada said Monday it will stop issuing C$1,000
banknotes effective May 12 and will begin to withdraw them from circulation
in an attempt to fight organized crime and money laundering.

The decision formalizes a proposal made in February by the Finance
Department, the central bank, and the Royal Canadian Mounted Police to do
away with the bills, coveted by criminals looking for an easy way to
transport ill-gotten gains.

The pink-hued, bird-depicting banknotes -- dubbed "pinkies" by criminals --
are the largest denomination in the country. With the C$1,000 bills out of
circulation, stacks of cash will be at least 10 times heavier and bulkier
than before -- because the next largest bill is the C$100.

Police have complained that drug-runners and money launderers were using the
bills to transport spoils by hiding the cash in small shipments of other
goods.

The Mounties investigated one drug-running operation in 1997 and found C$8
million in cash hidden in candles being shipped to Britain. About 90 percent
of the money was in C$1,000 bills.

The bank said the withdrawal of the notes will have little impact on the
currency system because the C$1,000 bill is rarely used for cash
transactions.

"In 1999, for example, there were about 3.8 million C$1,000 notes in
circulation, representing less than 0.3 percent of all notes in circulation,"
the bank said in a statement.

The central bank said the bills, which have been around since 1935, will
remain legal tender as long as they are in circulation, and individuals are
free to hold the notes as long as they want.

But no new bills will be printed and commercial banks have been asked to
return any bills that are in their possession or deposited by the public.

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