corresp
Confidential
March 15, 2007
Cecelia D. Blye, Chief
Office of Global Security Risk
United States Securities and Exchange Commission
Washington, D.C.
20549-5546
Dear Ms. Blye:
Re: The Bank of Nova Scotia
Form 40-F for the period ended October 31, 2005
File No. 001-31316
On behalf of The Bank of Nova Scotia (together with its subsidiaries, Scotiabank or the Bank),
I am writing in response to the request for information contained in the Staffs comment letter
dated December 6, 2006 and received by the Bank on January 11, 2007 (the Comment Letter)
regarding the Banks Form 40-F for the period ending October 31, 2005. For the convenience of the
Staffs review, set forth below are the comments contained in the Comment Letter along with the
responses of the Bank.
We note for the information of the Staff that concurrent with the submission of this redacted
letter via EDGAR, confidential treatment of portions of this response letter is being requested
under the Commissions rules. This letter contains the portions of the response letter to the
Staffs comments for which we do not seek confidential treatment.
In preparing this response to the Comment Letter, the Bank has engaged in a due diligence process
to accumulate necessary data and supporting documentation. This included accessing various systems
as well as formally requesting information on operations and activities from business lines,
countries where the Bank operates, major operating subsidiaries and specialist departments
including our trade finance and correspondent banking operations and the global money transfer
operations located in Toronto. Notwithstanding the due diligence conducted, while the Bank
acknowledges its responsibility for the adequacy and accuracy of the information contained in this
letter, it is not possible to be certain that every relationship or transaction has been captured
given the size and breadth of the Banks operations, and the multiplicity of systems that the Bank
employs which were not generally designed to automatically capture the information in the form that
the Staff has requested.
The numbers used herein in relation to such things as numbers of accounts, account balances and
present exposures were as at the date the information was obtained during the review which was
conducted over the last two months. All financial information provided in this response letter
consists of internally generated numbers that are not in accordance with Canadian GAAP, are
unaudited and have not been reviewed by Scotiabanks auditors. Scotiabank reports its financial
information in Canadian dollars and all monetary amounts set forth herein are expressed in
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Canadian dollars, unless otherwise stated. In an effort to provide the Commission with the Banks
most current information in respect of transactions relating to Cuba, Iran, Syria and Sudan (the
Jurisdictions), information has been compared to the Banks financial results for its most
recently completed financial year which were filed with the Commission on December 19, 2006.
1. We note from public media sources and your website that you may have operations in, or accounts
associated with, Cuba, Iran, Syria and Sudan, countries identified as state sponsors of terrorism
by the U.S. State Department and subject to sanctions administered by the U.S. Commerce
Departments Bureau of Industry and Security and the U.S. Treasury Departments Office of Foreign
Assets Control. We note that the Form 40-F does not contain any information relating to operations
in, or ties to, Cuba, Iran, Syria or Sudan. Please describe your operations in and contacts with
these countries, if any, and discuss their materiality to you in light of the countries status as
state sponsors of terrorism. Please also discuss whether the operations, either individually or in
the aggregate, constitute a material investment risk to your security holders. Your response should
describe your current, past and anticipated operations in, and contacts with, Cuba, Iran, Syria and
Sudan, including through subsidiaries, affiliates, correspondent banks and other direct and
indirect arrangements.
Response:
A. Introduction:
The Bank is one of North Americas premier financial institutions and Canadas most international
bank. Scotiabank and its affiliates serve approximately 12 million customers through approximately
2,100 branches in some 50 countries around the world, offering a diverse range of financial
products and services. As a Canadian bank with global operations, investors and customers have
certain expectations about the type and breadth of services that the Bank will offer.
The Banks 40-F does not contain any information relating to its operations in, or ties to the
Jurisdictions because, as will be more fully described, the Banks activities related to and
contacts with these countries are minimal, immaterial to the Banks operations and do not
constitute a material investment risk to the Banks security holders. Accordingly, the Bank does
not believe that any specific disclosure in its Form 40-F regarding the Jurisdictions is warranted.
The Bank does not have any employees, offices, assets, branches or other premises located in the
Jurisdictions. The Bank does not engage any third parties or agents to solicit business in the
Jurisdictions. The Bank does not make investments in entities organized in the Jurisdictions. [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] other than as
may be required to ensure compliance with The United Nations Act: Regulations
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Implementing the United Nations Resolution on Iran, which was recently enacted in
Canada.1
The most significant type of business that the Bank does, in relation to the Jurisdictions, is to
send and receive, via correspondent banks, wire transfers of funds to and from the Jurisdictions on
behalf of customers. The Bank also engages in issuing, advising and confirming letters of credit on
behalf of customers, as well as providing documentary collections services, and may thus acquire
limited credit exposure to a bank in one of the Jurisdictions. The Bank also maintains some deposit
accounts, some investment accounts and in a very few cases, has extended some form of credit to
customers who live in one of the Jurisdictions and in some cases are citizens of one of the
Jurisdictions. The business is overwhelmingly retail (save for the Trade Finance business) and
inconsequential. None of the businesses described below, either individually or in the aggregate,
are material to Scotiabank nor constitute a material investment risk to the Banks security
holders. As discussed below, our analysis of the materiality of the Banks activities associated
with the Jurisdictions also included consideration of the qualitative factors that a reasonable
investor would deem important in making an investment decision, including the potential impact of
our corporate activities on the Banks reputation and share value.
B. Analysis
1. Wire Payments
The Bank has retail, commercial and corporate customers who either send or receive payments via
wire transfer to and from persons or entities with whom they have either personal or business
relationships. A small number of these persons and entities are located in the Jurisdictions. This
business is conducted via SWIFT utilizing the Banks correspondent banks located in the
Jurisdictions. The Bank has a small number of correspondent banks in each of Cuba [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION], Iran [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] and
Syria [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] and none in Sudan2.
The Bank estimates that it processes [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED
SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] wire payment transactions with a dollar
value of approximately [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] per day through its global
money transfer operations located in
Toronto. These transactions are estimated to constitute [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION] of the Banks total wire
payment transfer volumes. In all of 2006, the Toronto global money transfer operations sent/received a
total of [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] with addresses in
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On February 22, 2007, the Canadian government
implemented UN Resolution 1737 on the Islamic Republic of Irans nuclear
program, which is intended to bring about the verifiable suspension of
Irans uranium enrichment program. Together with existing legislation,
these regulations will enable Canada to fully implement in Canadian law the
sanctions mandated by Resolution 1737 of the United Nations Security Council.
The regulations impose an embargo on certain goods and services that could
contribute to Irans activities linked to enrichment, reprocessing, heavy
water or the development of nuclear weapons delivery systems. They also
address an assets freeze and a travel notification requirement in respect of a
person designated by the United Nations as subject to the assets freeze. |
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Note that all banks in Cuba are ultimately
government-owned and [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] of the Banks Iranian correspondent
banks are government-owned. |
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the Jurisdictions or, assuming 256 working days in a year, on average [CONFIDENTIAL INFORMATION HAS
BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] to/from
the Jurisdictions per day. This would constitute approximately [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION] of the
number of daily wire
payments. In the 2006 financial year, the dollar value (based on January 31, 2007 exchange rates)
of payments sent/received to/from the Jurisdictions approximated [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES
AND EXCHANGE COMMISSION] (of which [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION] was in Canadian currency and the bulk of the remaining balance was in
Euros) or, assuming 256 working days in a year, an average of [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION] per day.
This would constitute [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] of the
dollar value of the Banks daily wire payments.
The numbers/volumes of transfers to/from the Jurisdictions in 2004 and 2005 processed through our
global money transfer operations located in Toronto were similarly immaterial relative to the
totality of the wire payments effected. The Banks wire transfer screening processes are described
on page 10.
2. Trade Finance
The Bank provides trade finance services to customers. With respect to the Jurisdictions, the
Banks business dealings and activities are, and have been, on a limited and restricted basis,
primarily trade-related transactions that have originated from our commercial and corporate
customers located in Canada and/or an international jurisdiction where the Bank is located (i.e.
has a branch or office), who are exporting to one of the Jurisdictions. The Bank may act at a
number of levels in the trade transaction to support our exporter customers when they sell goods
into one of these countries.
These transactions represent the bulk of our trade finance activities relating to these markets and
the Banks transaction volumes, exposure and earnings in the Jurisdictions have not been material
(approximately [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]). More information for each
country is summarized below.
Note that while our primary relationship is with the Banks exporter clients, the Bank does call on
its correspondent banks located in the Jurisdictions for due diligence purposes. The Bank needs to
exchange SWIFT or Test keys to conduct Letters of Credit (L/C) or payment transactions and this
requires the completion of the Banks standard correspondent bank due diligence process, which
includes background checks of the bank and its officers and directors to identify whether they are
subject to government sanctions. Additionally, where the Bank is taking credit risk on a bank,
discussions would also include credit related matters to facilitate a full assessment of credit
risks. As well, the Bank will accept deposits, normally overnight or short-term money market
funds, from its correspondent banks organized in the Jurisdictions, but the amount of this business
is immaterial relative to the Banks interbank deposit business.
a. Iran
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
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During 2004 and 2005 the Bank was financing a
larger amount of [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION] with peak exposure on discounted L/Cs or avalized drafts at around
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION]
in late 2005/early 2006. Total revenues from these trade transactions
relating to Iran were [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION].
In addition to these discounting transactions, the Bank has been involved in certain other
activities relating to Iran, including: advising L/Cs from Iranian banks to our exporter
clients, [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION]; and the Bank has had some Bid/Performance and other
guarantees issued in favor of Iranian beneficiaries to support projects its customers have
been doing in Iran. [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION]
All payments received from Iranian banks have been either in currencies other than US$, and
are typically Euro, or US$ payments which qualify under U Turn provisions of the U.S.
sanctions.
b. Cuba
The Banks business activities with Cuba are also restricted and limited. The Bank has a
trade/country limit of [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION] and has been limiting its exposure to that level for
approximately the last 10 years. Present exposure is [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION]. The trade
transactions the Bank is involved in are narrow in scope, as noted below,
generated [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION]. All exports from the US are under an U.S.
government approved program for food and humanitarian aid and include a special export
permit for each shipment. All transactions are with a single correspondent bank in Cuba. [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION]
In addition to these trade
transactions, the Bank also maintains accounts for [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION].
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The Banks 2006 annual financial statements
record a total of $29.4 billion of deposits from banks, therefore deposits of [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION].
c. Syria
The Banks activities relating to this market are minimal with [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION].
d. Sudan
The Bank has no country or trade limits established, nor any correspondent banking
relationships in Sudan.
3. Canadian Retail
A review of Bank records has disclosed approximately [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] accounts in Canada where the account owner, who may or may not be a citizen of one of the
Jurisdictions, indicates an address in one of the Jurisdictions. To the best of our knowledge,
these accounts would have been opened when the account owner was in Canada and subject to the
Banks Know Your Client (KYC) compliance processes. The total value of these [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]. The Banks total personal deposit liabilities as recorded in the Banks
2006 annual financial statements were more than $93 billion, so these few accounts would comprise
approximately [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION].
Our review of information indicates that the Bank has [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] on
record in Canada where the borrower indicates an address in one of the Jurisdictions. These [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] would have been initiated when the borrower was present in Canada. The total
extent of such associated current obligation approximates [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]. The Banks total mortgages,
personal loans and credit cards as recorded in the Banks 2006 annual financial
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statements was more than $128 billion, so these few accounts would comprise [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND
EXCHANGE COMMISSION].
A review of the Banks brokerage and mutual funds businesses in Canada has revealed [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]
where the owner indicates having an address in one of the Jurisdictions at some time in the past
three years. Of these, [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]. At the time of this review, the total dollar
amount in investments in these domestic accounts was [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]. Relative to the dollar
value of assets under administration and management held for personal customers of the Bank of
$139.2 billion as recorded in the Banks 2006 annual financial statement, this amount would
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION].
4. International Retail
A review of Bank records has disclosed
approximately [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] accounts throughout our international locations where the account owner, who may or may not be a citizen of one of the
Jurisdictions, indicates an address in one of the Jurisdictions. The total value of these
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]. The Banks total personal deposit liabilities as recorded
in the Banks 2006 annual financial statements were more than $93 billion, so these few accounts
would comprise [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]. Credit obligations associated with these
customers amount to approximately [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] of the more than $128
billion total in mortgages, personal loans and credit cards as recorded in the Banks 2006 annual
financial statements.
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]
5. International Government
We determined that in a very few of our Caribbean and Latin American operations, we hold the
accounts of [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION]:
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2. Your materiality analysis should address materiality in quantitative terms, including the
approximate dollar amount of revenues, assets and liabilities associated with Cuba, Iran, Syria and
Sudan. Please address materiality in terms of qualitative factors that a reasonable investor would
deem important in making an investment decision, including the potential impact of corporate
activities upon a companys reputation and share value.
In this regard, we note that Arizona and Louisiana have adopted legislation requiring their
state retirement systems to prepare reports regarding state pension fund assets invested in, and/or
permitting divestment of state pension fund assets from, companies that do business with countries
identified as state sponsors of terrorism. The Pennsylvania legislature has adopted a resolution
directing its Legislative Budget and Finance Committee to report annually to the General Assembly
regarding state funds invested in companies that have ties to terrorist-sponsoring countries.
Illinois, Oregon and New Jersey have adopted, and other states are considering, legislation
prohibiting the investment of certain state assets in, and/or requiring the divestment of certain
state assets from, companies that do business with Sudan. Harvard University, Stanford University,
the University of California and other academic institutions have adopted policies prohibiting
investment in, and/or requiring divestment from, companies that do business with Sudan. Florida
requires issuers to disclose in their prospectuses any business contacts with Cuba or persons
located in Cuba. Your materiality analysis should address the potential impact of the investor
sentiment evidenced by the referenced legislative actions directed toward companies operating in
Cuba, Iran, Syria and Sudan.
Materiality
The Bank does not believe that its business associated with the Jurisdictions is material from
either a qualitative or quantitative viewpoint. In reaching this conclusion, the Bank has
considered the nature of its contacts relative to the Jurisdictions, as well as the potential
reputational risks and impact on the Banks share value in dealing with the Jurisdictions in
determining whether such transactions should be disclosed in its public disclosure filings,
including its Form 40-F.
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Quantitative Analysis
Please refer to the descriptions of the business provided above. As noted, the Banks exposure to
accounts/transactions associated with persons in the Jurisdictions is primarily via wire payment
transfer and to a lesser extent trade finance where the business done is immaterial relative to the
totality of similar business. There appear to be approximately [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] arrangements in connection with persons who may be living or working in one of the Jurisdictions,
which is immaterial relative to the Banks approximately 12,000,000 customers worldwide. Thus, the
Banks contacts with the Jurisdictions are negligible and by any quantitative measure, immaterial.
Qualitative Analysis:
From a qualitative viewpoint, the Bank believes that its contacts with the Jurisdictions are
completely inconsequential. The Bank does not conduct any business from within any of the
Jurisdictions and does not make a practice of soliciting or initiating business relationships with
persons living in the Jurisdictions (beyond that cited under Trade Finance in order to establish
correspondent banking relationships).
The Banks Reputation and Share Value
The Banks common shares trade on The Toronto Stock Exchange (the TSX) and The New York Stock
Exchange (the NYSE). The majority of the Banks shares are held by Canadian residents and the
majority of trading in the Banks common shares occurs on the TSX. The average daily trading
volume of the Banks common shares for the first three months of the Banks 2007 financial year was
1,878,427 on the TSX, as compared to 127,775 on the NYSE. The average daily trading volume for the
Banks 2006 financial year was 1,936,612 on the TSX, and 65,319 on the NYSE. Further, as of
January 15, 2007, [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] of the
Banks common shares are held by Canadians, [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE
COMMISSION] are held by
Americans, and [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] are held by other
foreign residents. Of the Banks common shares held by
foreign residents, [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION] of those shares are
held by persons resident in one of the
Jurisdictions.
In your comments, you have directed our attention to investor sentiment evidenced by recent
legislation adopted by certain US states regarding investments of state funds, as well as policies
adopted by certain US universities to divest from or prohibit investment in companies that do
business in Sudan. We have carefully considered these factors and have concluded that the investor
sentiment evidenced by this legislation and these policies is directed toward companies that have
significant business relationships with the Jurisdictions or their governments or that have
investments or operations in the Jurisdictions. As explained above, the Bank does not have any
employees, offices, assets, branches or other premises located in the Jurisdictions. The Bank does
not engage any third parties or agents to solicit business in the Jurisdictions. The Bank does not
make investments in entities organized in the Jurisdictions. Aside from [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE
SECURITIES AND EXCHANGE COMMISSION]
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, the Bank has no business relationships with any of the governments of the
Jurisdictions. The Bank does not believe that the investor sentiment referred to in the Comment
Letter is directed toward organizations, such as the Bank, whose contacts with the Jurisdictions
are negligible and are purely incidental to their normal business activities outside the
Jurisdictions. Accordingly, the Bank does not believe that its incidental contacts with the
Jurisdictions have had or will have any adverse impact on the Banks reputation or share value.
3. Please also address the impact of your regulatory compliance programs, such as programs designed
to prevent terrorism funding, which cover operations and contacts associated with Cuba, Iran, Syria
and Sudan, and any internal risk assessment undertaken in connection with business in those
countries.
Around the world, Scotiabank has established policies, procedures and compliance programs to manage
the risk of involvement in money laundering and terrorist financing activity. Each business line
and geographic location has in place processes to escalate transactions that represent a higher
level of risk and transactions that are unusual for management review and, if appropriate,
approval. Where transactions or activities are considered suspicious, reports are submitted to the
appropriate regulatory authority in accordance with local requirements.
Scotiabank has established an AML/ATF Country Risk Assessment Model as the geographic component in
the assessment of money laundering and terrorist financing risk. The Model identifies the
principal money laundering and terrorist financing risk factors, and includes an independent
assessment from the FATF, IMF or FATF-style regional bodies of the effectiveness of the supervision
in each country, including that of the AML/ATF regime. [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
Scotiabank has implemented processes to screen customer names against certain government issued
sanction lists around the world. [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]. Where
a match is found, a
review is conducted and appropriate action is taken. [CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION].
[CONFIDENTIAL INFORMATION HAS BEEN OMITTED AND FURNISHED SEPARATELY TO THE SECURITIES AND EXCHANGE COMMISSION]
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*****
In addition, the Bank acknowledges as follows:
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the Bank is responsible for the adequacy and accuracy of the disclosure in the filing; |
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staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and |
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the Bank may not assert staff comments as a defense in any proceeding initiated by the
Commission or any person under the federal securities laws of the United States. |
Yours very truly,
Luc Vanneste
Executive Vice-President and Chief Financial Officer
The Bank of Nova Scotia
LV/JCS/LC/JW