Wrong Signal on Money Laundering
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If Americans doubted the extent to which the country’s banking system is being used to launder the profits of global criminals, they received fresh evidence this week with the arrest of the former Peruvian spy chief, Vladimiro Montesinos. His hiding place in Venezuela reportedly was exposed when he sent an emissary to Miami to withdraw $38 million he had sequestered in various American bank accounts. But now the Bush administration seems intent on weakening a worldwide campaign to clamp down on money laundering. If it does, coordinated global efforts to combat narcotics trafficking, arms smuggling, terrorism and other forms of organized crime will suffer a serious setback. Ever since the first Bush administration, the United States has been a leader in international efforts to crack down on money laundering — the main device by which criminals profit from and finance their activities. Among the most important weapons are longstanding rules that require banks to report any suspicious transactions to the government, as well as cash deposits over $10,000 — a figure that Treasury Secretary Paul O’Neill might raise to $25,000. The requirement that banks report suspicious activities has been an especially effective deterrent to money launderers and a valuable evidentiary tool for prosecutors. Mr. O’Neill, however, says that these and other laws impose ‘’significant cost on society,” an apparent reference to the paperwork required of banks. He has also questioned the value of the $700 million the government spends annually to fight laundering. More : query.nytimes.com |