INTERVIEW-Expert warns of money laundering on Internet
By Melanie Cheary
FRANKFURT, June 27 (Reuters) - The Internet offers fresh opportunities for criminals to launder dirty money through e-business, a fraud prevention expert warned on Tuesday.
Rowan Bosworth-Davies, a former London detective, praised the OECD and G7's recent campaign against tax havens launched with the publication of blacklists of financial centres deemed genial to ``hot money.''
But he told Reuters in an interview that e-business offered ``laundrymen'' new cover and easier passage.
The Organisation for Economic Cooperation and Development on Monday named 35 territories, from Europe to the Caribbean and South Pacific, guilty of providing tax dodgers with bank accounts and a no-questions-asked policy on the origin of money.
The OECD has warned of sanctions a year from now if these havens fail to change their ways.
``It is inevitable that the OECD had to do this. There is too little support given by financial organisations to prevent money laundering,'' Bosworth-Davies said ahead of an international conference on money laundering opening in Frankfurt on Tuesday.
``The OECD and FATF see the bigger picture -- this is not just about crime. Al Capone was nailed by a taxman,'' he said, adding that the outcry from a number of countries fingered by these organisations could see some taxation changes soon.
The G7's Financial Action Task Force (FATF) last week published its own blacklist of 15 tax havens it considered uncooperative in the fight against money laundering.
But information technology and the Internet have compounded the problem and call for software that can spot dirty money on the anonymous and global cyberwaves.
This issue was to be addressed at the money laundering conference opening in Frankfurt on Tuesday, hosted by the International Bankers Forum and computer services supplier Unisys Corp.
KNOW YOUR CUSTOMER AND YOUR CRIMINAL
When business was personal and bankers met clients, vetting of depositors offered some measure of security and a starting point for those fighting money laundering and fraud with only tax havens providing anonymity thanks to their legislation.
Now, however, the speed and ease of electronic banking and global online trading cloud transactions and offer legitimate financial opportunities for the honest and dishonest alike.
``In e-business there is a big problem in identifying who the customer is. The Internet brings a greater degree of risk,'' said Bosworth-Davies, who is the special consultant of Unisys on anti-laundering software.
``Financial markets have always offered an easy way to launder money. Buy shares, sell at a loss. Money laundering does not seek to be profitable,'' he said.
He emphasised the need for software which can monitor banking transactions in order to identify suspicious movements of money.
TAXATION IS THE KEY
The OECD classifies tax havens as those with nominal or no taxes and which either openly or implicitly sell themselves as a place where foreigners can avoid any awkward questions or risk of information on their investments being disclosed.
``Criminal money will always follow the tax route. Tax channels offer quasi respectability. Dirty money follows these channels too and nobody has the ability to differentiate. The issue is as much to do with tax,'' Bosworth-Davies said.
A striking feature of the OECD's list of 35 tax havens was the large number of islands linked to Britain which has raised eyebrows about the protection of dirty backyards.
While Bosworth-Davies said the British government had done all it could to encourage its dependencies to fight money enforce tax laws, he admitted that little had been achieved so far.
``It would be hard to think of a reason why, after all these years, such territories would be instantly persuaded of the need to change the habits of a lifetime,'' he said.
06:01 06-27-00 |
