News/ CAYMAN ISLANDS: HUMAN SLAVE TRADERS JOIN MONEY-LAUNDERING FLOOD.

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Subject: News/ CAYMAN ISLANDS: HUMAN SLAVE TRADERS JOIN MONEY-LAUNDERING FLOOD.
From: Melanie Orhant (morhant@igc.org)
Date: Wed May 31 2000 - 06:50:00 EDT


3-30-00 CAYMAN ISLANDS: HUMAN SLAVE TRADERS JOIN MONEY-LAUNDERING FLOOD.
By Jim Loney
GEORGE TOWN, Cayman Islands, March 30 (Reuters) - Drug smugglers, corrupt
officials and profiteers in the burgeoning human slave trade are washing
hundreds of millions of dollars in dirty money through the world's
financial markets, delegates to a United Nations money laundering
conference were told on Thursday.
The U.N. Offshore Forum Plenary gathering offshore finance regulators from
more than 30 countries and colonies, including many of the world's tiny but
powerful offshore banking centres, comes as the United States considers
stiff new measures to halt money laundering and the U.S. banking industry
grapples with fallout from the Bank of New York laundering scandal.
Money laundering refers to the practice of transferring the proceeds of
crime through a series of financial institutions to disguise their origins.
Pino Arlacchi of Italy, executive director of the U.N. Office for Drug
Control and Crime Prevention, told delegates that the fight against money
laundering has taken on new urgency because of the enormous flow of
criminal cash inundating the world banking system.
"The number of cases and the amounts involved have gone beyond what the
world community is prepared to tolerate," he said in a speech opening the
two-day session in the Cayman Islands, one of the world's largest offshore
banking centres.
Arlacchi cited the Bank of New York scandal, in which Russians allegedly
moved some $7 billion through the bank, and Nigeria's efforts to untangle
scams that "milked billions from that potentially rich country and brought
its economy to its knees."
"Much of that money found its way to banks that chose not to ask
questions," he said.
HUMAN SLAVE TRADERS
Offshore banking centres have long been havens for individuals trying to
evade taxes in their homelands, corrupt politicians and government
officials stashing money skimmed from aid programmes and drug cartels
washing cash from America's streets. They are now seeing more money from
human slave traders who arrange transport for migrants and force them to
pay long after they arrive in new countries, Arlacchi said.
"It is estimated that there are at present up to 10 million people who are
international migrants subjected to illegal practices of this type,"
Arlacchi said. "This traffic has become so profitable that even drug
traffickers are beginning to switch to it. And these profits must usually
be laundered."
U.S. officials, who have estimated some $600 billion in dirty money passes
through the global financial system each year, introduced a wide-ranging
new money laundering strategy this month, asking Congress to give the U.S.
Treasury Department power to target foreign countries or banks deemed to
pose particular threats.
The regulations would force U.S. banks to keep more detailed records of
transactions with foreign institutions or jurisdictions, or cut ties to
them.
The Bank of New York scandal last fall hardened global resolve. The bank
was investigated amid allegations that Russians laundered some $7 billion
through accounts at its branches. A former bank executive and her husband
pleaded guilty in connection with the case.
Following global banking trends, Arlacchi said criminal entrepreneurs are
using increasingly sophisticated technology to move money, shifting from
disconnected regional markets to an integrated worldwide cash-cleansing
apparatus.
HAVEN FOR DRUG LORDS AND CROOKS
The U.N. meeting is being held in a British territory long reputed to be a
haven for drug lords and crooks who flew to George Town with suitcases full
of cash.
The Cayman Islands, with 590 banks and trust companies and more than $500
billion in assets the fifth largest banking centre in the world, has sought
to clean up its image in recent years, allowing U.N. review of its
financial systems.
Ronald Ranochak, coordinator of the U.N. forum, said many Caribbean
offshore havens have taken measures to stem the flow of dirty money,
causing it to shift elsewhere.
"There is a substantial movement of the marginal businesses," he said.
"Most of it is moving out to the Pacific."
U.N. officials said they hoped to get many of the nations and territories
represented, including such tiny offshore havens as Vanuatu, St. Kitts and
Nevis, the Cook Islands and the Marshall Islands, to sign on by Friday to a
package of minimum performance standards for regulating their offshore
financial industries.

Reuters Limited 2000.
REUTERS NEWS SERVICE


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