A war of words on 'dirty money'

By Vaiju Naravane

PARIS, OCT. 10. After Monaco, Liechtenstein and Switzerland, Great Britain and its territories of Gibraltar, Jersey and Guernsey are now being accused of money laundering by French Parliamentarians. In a report published today, the French Parliament and the money laundering committee denounced loopholes in the banking and judicial regulations of the British system.

``Tony Blair and his Government preach around the world against terrorism. He would be well advised to preach to his own bankers and oblige them to go after dirty money,'' said Mr. Arnaud Montebourg, main author of the 400-page report.

The British government has rejected all charges of laxness.

The French Members of Parliament have demanded that the British Prime Minister, Mr. Tony Blair, force British banks to fight money laundering and that Britain cooperate much more with other countries in the war on crime and terrorism.

This 400-page report was written by a cross-party committee of the French Parliament and had accused Britain of not tackling the question of recycling dirty money which travels through off-shore tax havens like Jersey and Gibraltar. Mr. Montebourg said ``the right to a bank account is not a human right. It is a right for rich persons and for those who commit violations. Even the Swiss cooperates more than the English.''

In July 2000, the agencies of foreign banks in London handled approximately half of all money transactions deposited in the United Kingdom or roughly 12,000 billion francs. The gross domestic product of the City, London's financial district is estimated at 3 per cent of the entire country's gross domestic product. London is the world's largest financial hub offering low taxes, less than 30 per cent as compared to other European countries and has totally deregulated markets and financial services. But despite the size of this market the number of judicial cases and penal convictions for money laundering remains extremely low.

There were 100 legal complaints between 1986 and 1996 in Britain compared 538 in Italy and 2034 in the United States. Banks in Britain, the report said were far too secretive, its political leaders far too forgiving, and police agencies powerless to respond to complaints. ``The city is an impenetrable fortress with a status, rights and customs of its own, a closed universe where every financier, banker, or businessman chooses silence above all else.''

The report was prepared after a year's investigation and included hearings with agencies like Britain's Financial Services Authority (FSA), discussions with several investigators and the follow-up of several drug trafficking cases.

Mr. Arnaud Montebourg is a young member of France's ruling Socialist Party who has won himself a reputation as a relentless pursuer of corrupt business practices. He compiled the report after making similar exposes on banking malpractices in Switzerland, Monaco and Liechtenstein.

A spokesman for the British Treasury in London dismissed the allegations. ``The U.K. has one of the most comprehensive systems of controls and laws to combat money laundering and the financing of terrorism in the world,'' he said.

Send this article to Friends by E-Mail

Section  : International
Previous : Khaleda Zia sworn in as PM
Next     : Petrodollars fuelling terrorism: Russia