Europe South Asia Asia Pacific Americas Middle East Africa BBC Homepage World Service Education



Front Page

World

UK

UK Politics

Business

Sci/Tech

Health

Education

Sport

Entertainment

Talking Point

In Depth

On Air

Archive
Feedback
Low Graphics
Help

Tuesday, September 21, 1999 Published at 20:45 GMT 21:45 UK


World: Americas

Call to tighten Russian cash controls

The issue has been a flashpoint between Russian and US officials

The White House has told Congress the US must continue to support Russia despite allegations of massive money laundering by Russian officials and business leaders.


[ image: The Bank of New York has co-operated in the US investigation]
The Bank of New York has co-operated in the US investigation
However, Treasury Secretary Lawrence Summers said tighter controls must be imposed on Moscow to account for how it spends international aid.

His comments follow allegations that Russian gangsters illegally channelled billions of dollars in loans and mafia money through the Bank of New York.

Mr Summers said failure to help Russia overcome its economic problems would jeopardise the country's recovery and the process of democracy.

"To quarantine, contain or write off Russia as too corrupt would ill serve our national interest," he told a congressional committee.

But he said the International Monetary Fund (IMF) and the World Bank should apply strict conditions of financial integrity so that Russia used future assistance solely for its intended purpose.

He added that American laws would be strengthened making it harder for foreigners to use their illegally-gained money through American banks.

Swiss freeze accounts

Mr Summers was speaking as the first witness at a House of Representatives banking committee investigating the money laundering claims.

The start of the hearing coincided with news that the Swiss authorities had frozen $16.8m on Russian accounts suspected of being linked to the scandal.

Meanwhile, US newspaper reports have for the first time implicated Russian officials, as well as gangsters and businessmen, in the case.

Russian Foreign Minister Igor Ivanov said on Monday that Moscow supported all efforts to get to the bottom of the allegations - the people of Russia, he said, were the victims.

IMF loans

Press reports in Moscow said IMF credits to Russia may have been involved in the alleged scandal.

Mr Summers said the IMF, at Washington's insistence, had already acted to ensure its billions of dollars in loans were used for legitimate purposes.


[ image: Russian leaders have tried to play down the money laundering crisis]
Russian leaders have tried to play down the money laundering crisis
Russia's current $4.8bn loan programme to Russia is being provided in such a way that Moscow can only use the money to pay back previous IMF loans, he said.

Russia still owes $16bn out of the $22bn lent by the IMF since 1992.

On Monday, Russian Prime Minister Vladimir Putin said investigators sent to the US by Moscow were given no proof of Russian involvement in the money laundering.

But the head of the Russian delegation was reported to have said the Americans did have material suggesting businesses might have diverted money through the bank.



Advanced options | Search tips




Back to top | BBC News Home | BBC Homepage | ©




Africa | Americas | Asia-Pacific | Europe | Middle East | South Asia



Relevant Stories

20 Sep 99 | Europe
'No proof' of Russian money-laundering

14 Sep 99 | The Economy
US, Russia meet over laundering claims

12 Sep 99 | Europe
Clinton says corruption could destroy Russia

08 Sep 99 | The Economy
Yeltsin linked to bribe scandal

20 Aug 99 | The Company File
Bank helps inquiry into Mafia





Internet Links


Bank of New York

House of Representatives Banking Committee


The BBC is not responsible for the content of external internet sites.




In this section

From Business
Microsoft trial mediator appointed

Safety chief deplores crash speculation

From Entertainment
Taxman scoops a million

Violence greets Clinton visit

Bush outlines foreign policy

Boy held after US school shooting

Memorial for bonfire dead

Senate passes US budget

New constitution for Venezuela

North Korea expels US 'spy'

Hurricane Lenny abates

UN welcomes US paying dues

Chavez praises 'advanced' constitution

In pictures: Castro strikes out Chavez

WTO: arbitration in EU-Ecuador banana dispute

Colombian army chief says rebels defeated

Colombian president lambasts rebels