The Canadian government confirmed Thursday that its Navy has boarded a Tamil refugee ship headed toward Vancouver, amid concerns that some on board may be members of the Tamil Tigers terrorist organization.
Public Safety Minister Vic Toews said the vessel has declared the 490 passengers on board to be refugees. But he said the government has concerns there may be members of the Liberation Tigers of Tamil Eelam, or Tamil Tigers, on board. Both the U.S. and Canadian governments consider the group a terrorist organization.
"A vessel carrying 490 individuals claiming refugee status -- including suspected human smugglers and terrorists -- entered our waters and the Canadian Government is taking action," Toews said. "Human smugglers and human traffickers are now watching Canada's response to judge whether or not they can continue to take advantage of us."
The ship is off the coast of Vancouver Island and is traveling at a slow rate of speed. The government has been preparing tents on seaside military facilities to house the people from the ship, and jails have been warned they could receive new inmates.
The U.S. government, meanwhile, has been monitoring the movement of the ship, which appeared to be heading toward Canada since July. U.S. and Canadian government officials would not confirm whether any on board have ties to the Tamil Tigers, but Sri Lankan newspaper reports claimed "hardcore" leaders of the group were among those who left the Gulf of Thailand in July aboard the MV Sun Sea ship.
"We are in close consultation with the government of Canada about contingencies," U.S. State Department spokeswoman Nicole Thompson told FoxNews.com. "We are aware of the vessel and we will monitor its arrival. Should an emergency arise, the United States will respond appropriately."
The Department of Homeland Security is monitoring as well, though Thompson said the ship's arrival is primarily a "matter for the government of Canada."
Canadian officials are prepared to admit those on board into their jails and say the matter will be investigated and prosecuted, but some have raised concerns that the Tamil Tigers are looking to exploit Canada's lax refugee policies to build their network and prepare for a new wave of violence. The Canadian government in 2009 took into custody 76 people said to be Tamil refugees who arrived by boat -- the government is still processing them.
The Sri Lanka United National Association of Canada sent a letter last week to top government officials in Ottawa warning them that Canadian Tamils would "re-group and secretly transfer (the Tigers) to the jungles of Sri Lanka to resume the guerilla warfare in pursuit of a mono-ethnic Tamil separate state."
The group warned that Canadian soil could be used to "export terrorist violence to Sri Lanka or other (parts) of the world."
Sri Lanka's Sunday Observer newspaper first reported in July that the ship was heading toward Canada after being diverted away from Australia. The newspaper reported that the ship was previously used by the Tamil Tigers to smuggle arms to Sri Lanka and that its captain is allegedly a Tigers leader.
However, a group that represents the Tamil population in Canada said the allegations are exaggerated.
David Poopalapillai, spokesman for the Toronto-based Canadian Tamil Congress, called the claims that Tamil Tigers are on board "propaganda" started in Sri Lanka.
"For the Sri Lankan government, every Tamil is a kind of a terrorist," he said.
Poopalapillai said the Canadian Tamil Congress views those on board as refugees seeking asylum from persecution in Sri Lanka.
The Tamil Tigers were founded more than three decades ago and waged one of the longest-running conflicts in Asian history. Fueled by claims that minority Tamils were marginalized and persecuted by the Sri Lankan government, the group used suicide bombings and other tactics to carry out attacks, including the assassinations of top government leaders. The group sought a separate state.
A 2009 report released by the Council on Foreign Relations said that the Tigers do not have a known operational connection with other prominent terror groups, but that its methods for suicide attacks have been widely copied by Al Qaeda, Hezbollah and other organizations. The report noted that the Tamil Tigers were said to have trained with the Palestine Liberation Organization in its early days and may still "interact" with other terror groups through black market arms networks in southeast Asia.
The Tamil Tigers were defeated more than a year ago by the Sri Lankan military after leader Velupillai Prabhakaran was killed.
Poopalapillai said conditions are still bad for Tamils in Sri Lanka. He said that under Canadian policy, the approaching ship could not be turned away and urged the government to treat the passengers "well" and according to national law. If they are found to be legitimate refugees, he said, they should be allowed to stay.
Jess Gunnarson, a spokesman with the British Columbia Corrections Branch, said the passengers could be taken into local jails while they are processed by border officials. Canadian media reported that two prisons near Vancouver were being prepared to receive the immigrants.
The Canadian Department of Foreign Affairs and International Trade said in a statement that the country is "aware" of reports about the ship and suggested the government would have a tough response.
"Those responsible for migrant smuggling will be pursued, investigated and prosecuted to the full extent of Canadian law," the statement said.
The Associated Press contributed to this report.