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Saturday, 1 April, 2000, 08:46 GMT 09:46 UK
Crackdown on money laundering

By Peter Greste

Thirty six offshore banking centres have agreed to a set of standards aimed at stopping money laundering.

Financial regulators from the states that operate offshore banks pledged their commitment to the document at the end of a two-day conference in the Cayman Islands.

The agreement came after the multi-national Financial Action Task Force threatened to publish a blacklist of countries believed to be turning a blind eye to money laundering.

The activity is big business. No one knows for sure just how big, but it is widely believed to run to hundreds of billions of dollars - a huge amount of which gets scrubbed on its way through the world's offshore banking havens.

After two days of negotiations hosted by the United Nations, the representatives of 36 offshore centres finally agreed to a wide-ranging set of standards designed to deny criminal organisations access to the world's financial markets.

Among the new measures are a better flow of information between the centres, the tightening of systems to report suspicious transactions and improved enforcement of money laundering laws.

Watching closely

Some of the smaller countries represented at the conference welcomed the initiative. "We feel it's absolutely necessary to impose minimum standards," said the attorney-general for Antigua and Barbuda, Doctor Errol Cort.

But those countries also welcomed the chance to avoid the threat of highly damaging blacklists.

Organisations like the Financial Action Task Force, the Organisation for Economic Development and Co-operation and the US Congress are all considering naming countries they think are soft on money laundering.

The standards list holds that prospect back for the time being, but those organisations will be watching closely to see just how well the new rules are applied, and the temptation to let them slip is high.

Offshore banking is all that keeps some of these tiny island economies afloat, and the greater the flow of cash through those institutions, legal or otherwise, the better off they will be.

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31 Oct 99 | Americas
US seeks money-laundering suspects
16 Feb 00 | Americas
Money launderers plead guilty
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