Canadian regulator puts Tamil group on watch list

TORONTO, June 16 (Reuters) - Canada's banking regulator added the World Tamil Movement to its list of groups linked to terrorists on Monday, a move that requires Canadian financial institutions to review their records and immediately report any transactions made by the group to federal police.

The directive covers Canadian banks, insurance companies and credit unions and is part of Canada's effort to fight money laundering and terrorist financing.

The World Tamil Movement, based in Toronto, has operated in Canada since the 1980s and Canadian police shut down its Montreal office earlier this year, according to the National Post newspaper.

Canada's counter-intelligence agency has called the World Tamil Movement a front organization for the Tamil Tigers, a rebel group fighting the Sri Lankan government.

Canada passed an anti-terrorism law in 2001 that allows the federal cabinet to name entities and individuals directly involved in terrorist violence in order to curb their activities, and the Tamil Tigers are on that list.

But until now support groups had not been included on the list, the Post said.

The Royal Canadian Mounted Police have been investigating the World Tamil Movement since 2003, and they raided its Toronto and Montreal offices in 2006.

Representatives of the group have said it is sympathetic to the Tigers' cause, but deny that it raises funds for terrorism. (Reporting by Lynne Olver; Editing by Peter Galloway)