|
▼
ILLICIT-7
ILLICIT
CHAPTER 7: THE MONEY WASHERS
131–32 [9/11 finance] “Bankrolling bin Laden,” Financial Times, November 29, 2001; “Trail of Terrorist Dollars That Spans the World,” Financial Times, November 29, 2001.
132 [“Money sets Osama bin Laden apart” quote] Jim Hoagland, “Dry Up the Money Train,” Washington Post, September 30, 2001, p. B7.
132 [Charities and terrorist finance] “The Iceberg beneath the Charity,” The Economist, March 15, 2003.
MORE MONEY, MORE WAYS TO HIDE
134 [Scale of financial liberalization] BIS Reporting Banks: Summary of International Positions. http://www.bis.org/publ/qcsv/anx1.csv
135 [Plummeting banking costs] Saleh M. Nsouli and Andrea Schaechter, “Challenges of the E-Banking Revolution,” Finance & Development, September 2002, p. 48.
135 [Currency transactions, $1.88 trillion in 2004] Gabriele Galati and Michael Melvin, “Why Has FX Trading Surged? Explaining the 2004 Triennial Survey,” BIS Quarterly Review, December 2004; Tom Abate, “Banking’s Soldiers of Fortune,” San Francisco Chronicle, December 7, 2004.
136 [International Portfolio Investment] International Finance Corporation, Emerging Stock Markets Factbook (Washington, DC: IFC, several years).
136 [FDI Worldwide] United Nations Conference on Trade and Development, World Investment Report, 2004 (Geneva: UNCTAD Press Unit, September 22, 2004).
Discretion in Demand
137 [Global money-laundering estimates] “Fighting the Dirt,” The Economist, June 23, 2001; “IRS Says Offshore Tax Evasion Is Widespread,” New York Times, March 26, 2002; Nigel Morris-Cotterill, “Think Again: Money Laundering,” Foreign Policy, May–June 2001, pp. 16–22, Peter Reuter and Edwin M. Truman, Chasing Dirty Money: The Fight Against Money Laundering, (Washington, DC: Institute for International Economics, 2004) p. 13. For higher estimates of money laundering, see Friedrich Schneider and Dominik Enste, “Shadow Economies: Size, Causes, and Consequences,” Journal of Economic Literature 38, no. 1 (2000): pp. 77–114. See also Vito Tanzi, Policies, Institutions, and the Dark Side of Economics (Cheltenham, UK: Edward Elgar, 2000).
137 [Mexican drug interests/Hezbollah partnership in pseudo-ephedrin] “Drug Money for Hezbollah?” CBS News, September 1, 2002, online at http://www.cbsnews.com/stories/2002/09/01/attack/main520457.shtml
138 [Sheik Omar Abdel Rahman associates’ use of cigarette, coupon scams, etc.] John Mintz and Douglas Farah, “Small Scams Probed for Terror Ties,” Washington Post, August 12, 2002, p. A1.
138 [Madrid bombing perpetrators funding through counterfeit CDs] “Militants Turn To Crime to Fund Terrorism,” Associated Press, August 12, 2004.
139 [Walter C. Anderson] David S. Hilzenrath, “$200,000,000 Telecom Tycoon Used International Financial Labyrinth,” Washington Post, April 18, 2005, p. E1.
140 [Estimate of risk faced by money-launderers] Peter Reuter and Edwin M Truman, Chasing Dirty Money: The Fight against Money Laundering (Washington, DC: Institute for International Economics, 2004), p. 5.
The New Offshore
140 [New offshore: marketing national sovereignty] William Wechsler, “Follow the Money,” Foreign Affairs 80, no. 4, pp. 40–57; “OECD Attacks Tax Havens over Law Changes,” Financial Times, June 12, 2001, p. 4; “U.S. Companies File in Bermuda to Slash Tax Bills,” New York Times, February 18, 2002.
141 [Nauru] Jack Hitt, “The Billion-Dollar Shack,” New York Times Magazine, December 10, 2000.
141 [Cayman Islands] Nigel Morris-Cottrill, “Think Again: Money Laundering.”
141 [Tuvalu leasing of domain name and country code] Wechsler, “Follow the Money.”
142 [Flags of convenience] Kerry Lynn Nankivell, “Troubled Waters,” Foreign Policy, November–December 2004, pp. 30–31.
142–43 [Ciudad del Este] William W. Mendel, “Paraguay’s Ciudad del Este and the New Centers of Gravity,” Military Review, March–April 2002; Kevin Gray, “Paraguay Tri-Border Area Is Terror Haven,” Associated Press, October 3, 2004.
Big Bank, Little Bank, Bogus Bank
143–44 [E-banking] Saleh M. Nsouli and Andrea Schaechter, “Challenges of the E-Banking Revolution,” Finance & Development, September 2002, pp. 48–51.
144 [$36 million money-launderer] “Money Laundering,” UNODC online document, May 1998, at http://www.unodc.org/adhoc/gass/ga/20special/featur/launder.htm
145 [Correspondent banking] “Through the Wringer,” The Economist, April 14, 2001; “U.S. Banks Admit To Shortfall in Monitoring,” Financial Times, March 2, 2001, p. 12.
145 [Bank of New York scandal] Celestine Bohlen, “Bank Inquiry’s Trail Leads To Top Levels of Power in Russia,” New York Times, February 18, 2000, p. A1; [160 correspondent banks] Thomas A. Fogarty, “Bank Chief Says Workers Used Poor Judgment,” USA Today, September 23, 1999, p. 7A.
145–46 [Bin Laden money movements via al-Shamal Bank] John Willman, “Trail of Terrorist Dollars That Spans the World,” Financial Times, November 29, 2001, p. 7.
146 [Buying/opening banks] Thomas Azzara, Tax Havens of the World, 7th ed. (Nassau, Bahamas: New Providence Press, 1999). Jack Hitt, “The Billion-Dollar Shack”. U.S. Department of State, Bureau for International Narcotics and Law Enforcement Affairs, “International Narcotics Control Strategy Report, 2005,” March 2005.
Layers and Fronts
147 [Front companies, layering, “could do worse”] Nigel Morris-Cottrill, “Think Again: Money Laundering”; Financial Action Task Force on Money Laundering website, online at http://www1.oecd.org/fatf/
147 [Weaknesses in European company law] Ernesto U. Savona, “Obstacles in Company Law To Anti–Money Laundering International Cooperation in European Union Member States,” in Mark Pieth, ed., Financing Terrorism (London: Kluwer Academic Publishers, 2002).
147 [London as money laundering center] “London’s Dirty Secret,” Financial Times, October 29, 2004, p. 14.
147 [Abacha anecdote and numbers] “Britain Goes after Abacha Billions,” BBC News online, October 18, 2001.
148 [Online gaming and laundering] Rod Smith, “Online Betting Growth Called Threat To Nevada,” Las Vegas Review-Journal, January 24, 2004, p. 1D; Peter Spiegel, “U.S. to Stop Net Becoming an Offshore Tax Haven,” Financial Times, July 11, 2000, p. 13.
148–49 [“Offshore world”] Ronen Palan, The Offshore World: Sovereign Markets, Virtual Places, and Nomad Millionaires (Ithaca and London: Cornell University Press, 2003). See also Vito Tanzi, Policies, Institutions, and the Dark Side of Economics (Cheltenham, UK: Edward Elgar, 2000), and R. T. Naylor, Wages of Crime: Black Markets, Illegal Finance, and the Underworld Economy (Ithaca, NY: Cornell University Press, 2002 and 2004, rev. ed.).
Cash and Carry
149 [Bull semen shipments and other concealment strategies] Patricia Hurtado, “Drugs and Money at the Crossroads,” Newsday, June 23, 1997, p. 3.
149 [How hawalas work] Douglas Frantz, “Ancient Secret System Moves Money Globally,” New York Times, October 3, 2001, p. B5.
149 [Chinese “fie chen”] United Nations General Assembly, Special Session on the World Drug Problem, “Money Laundering,” UN Department of Public Information (DPI/1982), May 1998.
149–50 [The trade in honey used to ship drugs and weapons] Judith Miller and Jeff Gerth, “Honey Trade Said to Provide Funds and Cover To bin Laden,” New York Times, October 11, 2001, p. A1.
150 [Farah] Douglas Farah, Blood from Stones: The Secret Financial Network of Terror (New York: Broadway Books, 2004).
150 [Conversion to resources] Jonathan M. Winer and Trifin J. Roule, “The Finance of Illicit Resource Extraction,” photocopy manuscript dated January 13, 2002; “Gold Shampoo Washed Money,” Washington Post, January 9, 2004,
p. E3; “Infighting Slows Hunt for Hidden al-Qaeda Assets: Funds Put in Untraceable Commodities,” Washington Post, June 18, 2002.
Peer Pressure
151 [Basel committee] Basel Committee on Banking Supervision, “International Convergence of Capital Measurement and Capital Standards,” July 1998.
151–152 [FATF first phase] Andrew Parker, “Professions Join Hunt for Dirty Cash,” Financial Times, March 1, 2004, p. 11.
152–53 [FATF sanctions/compliance] Wechsler, “Follow the Money”; “Panama helps Russia Beat Money Laundering,” Financial Times, August 9, 2001; [Caymans] “Tax Haven Tightens Up Its Financial Regulations,” Financial Times special section, July 16, 2001; Canute James, “Offshore Financial Centers Hit at OECD,” Financial Times, November 21, 2001, p. 5; “Doubts over Israeli ‘Dirty Money’ Unit,” Financial Times, November 16, 2001; “Tough Test in Battle to Beat Tax Evasion,” Financial Times, February 20, 2001; “Fighting the Dirt,” The Economist June 1, 2001; Michael Peel, “Bahamas Agrees To Tax Haven Demands,” Financial Times, March 19, 2002, p. 6.
Rude Awakening
153–54 [Post-9/11 terrorist focus] Jonathan M. Winer and Trifin J. Roule, “Fighting Terrorist Finance,” Survival: The IISS Quarterly 44, no. 3 (autumn 2002): pp. 87–104; Jonathan M. Winer, “Globalization, Terrorist Finance, and Global Conflict: Time for a White List?” in Pieth, ed., Financing Terrorism, pp. 5–40; “Terrorists Are Now Targets in Money-Laundering Fight,” Washington Post, July 25, 2002, p. E3; “The Dirty Money That Is Hardest to Clean Up,” Financial Times, November 20, 2001; “G7 Countries to Seek Stiffer Controls on Financial Centers,” Financial Times, December 13, 2001; “Banking on Secrecy,” Time, October 22, 2001; “Money Laundering Targeted in Europe,” Washington Post, October 2, 2001, p. A12; “The Needle in the Haystack,” The Economist, December 14, 2002; Claes Norgren and Jaime Caruana, “Wipe Out the Treasuries of Terror,” Financial Times, April 7, 2004; “Loopholes Undermine Crackdown on Terror Financing,” Financial Times, November 14, 2003.
154 [“The attitude . . . must change”] United States Treasury Department, National Money Laundering Strategy, July 2002, p. 3, online at http://www.treas.gov/offices/enforcement/publications/m12002.pdf
154 [“Like it or not . . .”] “Task force to Discuss Financial Crackdown,” Financial Times, October 23, 2001, p. 4.
154 [Netherlands regulator] Arthur Docters van Leeuwen, “Secrets That Block the War on Terror Financing,” Financial Times, October 7, 2004.
155 [Hommes] Author interview with Rudolf Hommes, former minister of finance of Colombia; Bogota, November 2004.
156 [Koch-Wieser] Author interview with Caio Koch-Wieser, state secretary of the Federal Ministry of Finance, Germany; Davos, Switzerland, January 2005.
156 [Private banker] Author interview with private banker; Zurich, Switzerland, January 2005.
|