An unprecedented campaign to track down and eliminate the sources of funding for global violence is underway. But banking experts caution that funds for terrorism are a drop in a global sea of money being laundered in banking centres around the world.
Bank secrecy laws and privacy rules set up by the banks to gain customers will have to be overcome, say experts. Many of the customers of off-shore banks are attempting to hide assets from various nations’ income taxes. Thus 47 of the world’s top 50 banks are operating in the Cayman Islands, where bank secrecy protects customers from the scrutiny of tax collectors. With 500 banks in total on the islands, the Caymans are the de facto fifth largest banking centre in the world.
A report on money laundering sponsored by Senator. Carl Levin (Democrat, Michigan), published in February, found enormous lapses in controls at some of the biggest U.S. banks, particularly in their relationships with international financial institutions.
Source: Emily Church, Tracking the terror paper trail, September 28, 2001, CBS.MarketWatch.com; Report on Correspondent Banking: A Gateway For Money Laundering, February 2001, Minority Staff of the Permanent Subcommittee on Investigations, U.S. Senate.
For text http://cbs.marketwatch.com/news/story.asp?siteID=mktw&guid=%7B0D58914F%2D8F1 F%2D41F3%2D8014%2DFFEC2040BA49%7D
For Levin report http://www.senate.gov/~gov_affairs/020501_psi_minority_report.htm
For more on terrorism http://www.ncpa.org/extra/terrorism/
FMF\9 October 2001
