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US tags ‘dirty’ money launderers in the Pacific
US tags ‘dirty’ money launderers in the Pacific
Australia and seven other Pacific islands nations are being placed under the United States government’s microscope for being dirty money launderers.
They are being described as “Jurisdictions of Primary Concern” and “Jurisdictions of Concern” which means countries vulnerable to money laundering schemes by rogue elements. Jurisdictions in this categories receive priority attention from the United States.
According to the laundry comparative table published in the Economic Perspective, an electronic journal of the US State Department, Australia and Nauru are placed with a group of countries labelled as ‘Jurisdictions of Primary Concern’. Countries include the United States, United Kingdom, Japan, Canada.
Six other Pacific nations including the Cook Islands, Marshall Islands, Niue, Palau, Samoa and Vanuatu are being placed in the second category known as “Jurisdictions of Concern”.
Papua New Guinea, Fiji, Solomon Islands, New Zealand, and the Federated States of Micronesia are in a much lesser “Jurisdictions Monitored” category. Money laundering has a corrosive effect on a country’s economy, government, and social well-being, two US State Department officials say.
Senior policy adviser, John McDowell and programme analyst, Gary Novis of the Bureau of International Narcotics and Law Enforcement Affairs, reported in the Economic Perspectives that the practice distorts business decisions, increases the risk of bank failures, takes control of economic policy away from the government, harms a country’s reputation, and exposes its people to drug trafficking, smuggling, and other criminal activity.
A high level of international cooperation is vital to keep them in check due to technological advances money launderers employ. It is necessitated by the criminals’ need to disguise the origin of their money to avoid detection and the risk of prosecution when they use it.
Money laundering involves a series of multiple transactions used to disguise the sources of financial assets so that those assets may be used without compromising the criminals who are seeking to use them.
Through these processes, a criminal tries to transform the monetary proceeds derived from illicit activities into funds with an apparently legal source. This has the potential of devastating economic, security and social consequences.
Excerpts from a State Department report titled, “Money Laundering and Financial Crimes” state that each year US officials from agencies with anti-money laundering responsibilities meet to assess money laundering situations in more than 175 jurisdictions.
The review includes an assessment of the significance of financial transactions in the country’s financial institutions that involve proceeds of serious crime, steps taken to address financial crime and money laundering, each jurisdiction’s vulnerability to money laundering, the conformance of its laws and policies to international standards, the effectiveness with which the government has acted, and the government’s political will to take needed actions. They assign priorities to jurisdictions using a classification system consisting of three categories—Jurisdictions of Primary Concern, Jurisdictions of Concern, and Other Jurisdictions Monitored as per the 2000 INCSR (International Narcotics Control Strategy Report).
INCSR priorities draw upon a number of factors, which include, whether the country’s financial institutions engage in transactions involving significant amounts of proceeds from serious crime; the extent to which the jurisdiction is or remains vulnerable to money laundering; the nature and extent of the money laundering situation in each jurisdiction (for example, whether it involves drugs or other contraband); the ways in which the United States regards the situation as having international ramifications; the situation’s impact on US interests; whether the jurisdiction has taken appropriate legislative actions to address specific problems; whether there is a lack of licensing and oversight of offshore financial centers and businesses; whether the jurisdiction’s laws are being effectively implemented; and where US interests are involved, the degree of cooperation between the foreign government and US government agencies. Other factors are also considered.
The United States or the United Kingdom has comprehensive laws and conducts aggressive anti-money-laundering enforcement efforts but still classified as “Primary Concern” jurisdictions due to the size of their economies. Primary Concern jurisdictions therefore receive priority attention from the United States.
While the threat from jurisdictions classified under “Concern” is not as acute, they must undertake efforts to develop or enhance their anti-money-laundering regimes.
Finally, while jurisdictions in the “Other” category do not pose an immediate concern, it will nevertheless be important to monitor their money laundering situations because, under the right circumstances, virtually any jurisdiction of any size can develop into a significant money laundering center. Impacts of this on the jurisdictions concerned would be immense.
Meanwhile. in PNG, the Central Bank has again warned the public to avoid doing business with fast money schemes.
Governor Wilson Kamit said the bank strongly advised the public against putting money in the schemes as they are illegal. People who invest their money with promoters or agents of these schemes will always lose their hard-earned cash. It is not clear if these schemes are “money laundering front” operations, but the bank named the illegal money schemes as U-Vistract, Papalain Association (or Bulolo Forest Products Ex-employees Association), National Federation of Foundation, Money Rain (also known as JR Creative Networks), Windfall, Hosava Stocks, Bonanza 99, PNG Gold Limited, Millenium Corporation, Gold Money Investments Limited, and a new one known as Christian.
Kamit also added there are some smaller schemes disguised as non-government organisations operating throughout PNG. It said members of public continue to get robbed of their savings by these illegal schemes and scams in spite of the various educational awareness programmes conducted by the bank.
He said money put in these schemes are lost for ever and people become the losers. The bank can only prevent these money schemes from operating but it is the prerogative of the investors to refrain from putting money in them. He said that onus is on individuals not to be foolish to place their money with any of these schemes. “You are warned and reminded that you may never see your money and whatever you are promised in return.
—By Brian Tobia
Niue moves to ease crisis
A raft of cuts has been approved by the Niue Government as it tries to ease financial crisis. The cuts include cutting the salaries of public servants by 10 percent.
A Radio New Zealand report said the salary cuts would also apply to MPs and may be lifted at the end of the financial year.
Other cuts include village councils grants being halved, while those for church pastors and community development assistance have been frozen. Niue’s finance minister Fisa Pihigia said they expect to save about US$1million through the changes which came after an outcry over earlier plans to reduce the hours of some public servants by 20 percent. Pihigia said the 10 percent reductions would not lead to workers getting a day off each fortnight but they might work fewer hours each day.
“That’s what we are thinking of. One thing I don’t want to jeopardise at the moment is the contribution of the workers to the super fund because of the deductions from their gross salary of 10 percent. We want to retain those benefits for the workers, rather than extra hours off or extra days off.”
Budget cut forces drastic measures
A decision by the Solomon Islands government to suspend yearly subvention to statutory bodies has put the islands’ tourism bureau in a difficult situation. The government decided not to allocate the yearly subvention because “statutory bodies” failed to submit “yearly audited accounts to parliament.”
Solomon Islands Visitors Bureau (SIVB) general manager, Michael Tokuru said such action is unfair to his organisation because SIVB is dealing with an emerging industry and does not have any source to generate its own revenue for expensive international promotions. He said as a result of the funding suspension, SIVB has to take “drastic and painful measures.” This, he says, will mean a reduction in the bureau’s 2007 budget by 11 percent, cutting back on marketing and promotional activities for 2007 and putting pressure on government to increase the hotel bed tax, which will have a negative impact on existing hotels businesses.
More exposure for Vanuatu
Vanuatu is receiving added exposure with the debut of the first Internet-based television station to broadcast from the area. Vanuatu TV is introducing Vanuatu’s customs, tourism and businesses to the world via professionally produced television programming via the Internet. According to Grant Abbott, CEO of Vanuatu TV, he and his brother Chris decided to create Vanuatu TV after spending a holiday there in 2006. “We found plenty of Vanuatu information on sites featuring lots of inactive words and pictures. Having spent over eight years developing TV programmes for Internet, we decided to use our skills to showcase Vanuatu, ‘the happiest place on earth and our home’,” Abbott stated.
Aust assists Tongan businesses
Australia will provide up to A$1.5 million to assist business in Tonga recover in the wake of last year’s civil unrest. The commitment is expected to benefit over 130 businesses which were looted and damaged during the upheaval in November..
US travel crisis
Millions of people are choosing not to visit the United States because they believe foreigners are unwelcome, says the Discover America Partnership (DAP) in its ground-breaking A Blueprint to Discover America. As a consequence, the United States economy is missing out on US$16.4 billion in new expenditure, 189,000 new jobs and US$2.6 billion in federal, state and local tax revenues. The DAP Blueprint offers a US$300 million plan to fix the country’s travel “crisis” through the following measures:
• Create a 21st century visa system.
• Modernise and secure ports of entry.
• Change perceptions through co-ordinated communications.
US$1.2bn hydropower for PNG
Russian Aluminum (Rusal), the world’s biggest aluminium smelter, is keen to develop a K3.7 billion (US$1.2 billion) hydro-power plant in Papua New Guinea (PNG) harnessing the Purari River in Gulf province, PNG Sustainable Energy Ltd chief executive Peter Martin said.
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