NCPA - National Center for Policy Analysis

Money- Laundering Countries

June 26, 2000

A group of representatives of 26 countries, including the U.S., has produced a report naming 15 countries as potential havens for the proceeds of crime. The list, issued by a group called the Financial Action Task Force on Money Laundering, named Israel, Russia and the Cayman Islands among countries receiving questionable transfers of funds.

  • The others were the Bahamas, the Cook Islands, Dominica, Lebanon, Liechtenstein, the Marshall Islands, Nauru, Niue, Panama, the Philippines, St. Kitts and Nevis, and St. Vincent and the Grenadines.
  • By U.S. estimates money being laundered all over the world amounts to at least $600 billion annually.
  • However, experts argue the U.S. financial system is host to more money being laundered than any other country.

The aim of the task force is to encourage a global tightening of banking laws, and the U.S. intends to follow up with other forms of pressure if the list does not produce the desired effect, government officials say.

Congress is working on a bill that would authorize the suspension of banking relations with individual countries, among other steps.

The task force often targets tiny countries that have courted foreign funds through banking laws that provide near-impenetrable secrecy for depositors. In many cases, no real bank exists in countries on the list -- with their role being limited to collecting fees.

U.S. officials stress that its presence on the list does not mean that a country is a money-laundering center -- only that its banking laws make it possible.

Source: John Burgess, "15 Nations Cited as Havens for Possible Money Laundering," Washington Post, June 23, 2000.


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