Hang laundering out to dry

The dirty work of dictators and drug lords would be harder if they weren't able to launder their dirty money through the world's financial institutions. Exposing and removing this dark side of banking is a global law-enforcement priority. It's also a complex, step-by-step task.

So a recent step taken by a group of international banks is welcome. These banks, giants ranging from Switzerland's UBS to Britain's Barclays to America's Citibank and Chase Manhattan, announced new guidelines to discourage the laundering of ill-gotten gains.

One important measure, for instance, would hold the banks' offshore subsidiaries to the tougher international standards recently developed to help stop laundering.

Those standards have been promoted by the Organization for Economic Cooperation and Development and its affiliated Financial Action Task Force. The OECD is urging its membership of developed nations to abolish banking secrecy practices that ease the hiding of questionable funds. It's also calling for economic sanctions against nations known to be havens for dirty money.

Also important are anti-laundering initiatives undertaken by Transparency International, a private advocacy group that battles corruption. TI was instrumental in helping the big banks draw up their new guidelines.

The more nations who join in this effort the better. The laundering problem is ingrained, with billions of dollars involved. But the losses to government and industry from graft, organized crime, and drug running dwarf any financial gains skimmed by countries or banks that host money laundering.

With influential banks themselves taking a larger hand in the fight - and in effect admitting they've long been a part of the problem - the global flow of dirty money may yet be stemmed.

(c) Copyright 2000. The Christian Science Publishing Society