Anti-money laundering campaign continues

Legislation to combat money laundering still inadequate - 12-8-97

 Yet significantly there is still an omission in that the Manx government, along with others in off-shore dependent territories which service the international finance business, will not name banks caught with "funny money".

 A recent UN. report estimated (conservatively) that drug trafficking, fraud, pornography, prostitution, smuggling and corruption generate global revenue of up to £1000 bn. Given the quantity of money to be dispersed and cleaned no off shore jurisdiction can claim to be devoid of the problem.

 Legislation, constantly updated, to deal with money laundering is necessary but legislation in itself is not a solution. At best it makes more difficult and expensive the operations to launder the £1000 bn the UN estimate circulates yearly.

 Can the Banking trade itself be relied upon to go that extra mile to avoid this money, whilst free of the ultimate stigma of exposure? The Celtic League re-iterate its call for Banks in the money centresfound to contain laundered funds to be named either by their own enforcement authorities or International agencies.

 J. B. Moffatt
pp. Celtic League 12/8/97

Irish Government Initiative on Money Laundering Undermined - 28-12-96

 The Irish government's Minister for Justice has responded to concerns expressed by the Celtic League over lime use of Tax havens to launder the profits of crime, particularly drug related crime.

 The Celtic League wrote to both flie British and Irish governments in July alleging that there was evidence that the Financial Services Centres in Dublin, the Isle of Man and Channel Isles were being used to conceal and launder the income from the drug barons.

 In a press-statement issued at the time, we specifically cited the refusal of the Manx authorities to name a Bank via which criminal elements had laundered millions of pounds of drug money which was subsequently seized by United States Drugs Enforcement Argency officials.

 In coorrespondence to the Celtic League (attached) Irish Justice Minister Nora Owen TD sets out a comprehensive package of legislation, some adopted only in recent months, aimed at combatting the problem. The Irish government's positive attitude contrasts sharply with thc United Kingdom's. In a reply from the British Home Office in August the Constitutional Policy Directorate, which handles relations with the Channel Isles and Manx dependencies, would only say that the respective islands were being asked to give consideration to "passing all-crimes money laundering legislation." However in the same week (early August) that this statement was received, Home Office official Baroness Blatch on a visit to the Isle of Man said that the British had "no intention of intervening with the governents of the Channel Isles and Isle of Man over money laundering."

 As the Irish government attempts to make life tough for the bankers of the drug barons, the United Kingdom still shows no inclination to plug loopholes in jurisdictions within which it has interests.

 The Celtic League intends to write to the Finance Ministers of all EU countries and the European Commission highlighting this dangerous anomaly between member States.

 J.B. Moffatt,
General Secretary

Response to General Secretary from Irish Minister for Justice re - money laundering.

 Dear Mr. Moffat,

 I am directed by the Minister of Justice, Mrs. Nora Owen, T.D., to reply to your letter. A package of tough Legislation including measures to seize and deny the so-called drug barons of their assets and tackle their networks head-on has recently been passed in our Parliament. Examples of these legislative measures are:

 The Criminal Justice (Drug Trafficking) Act 1996 which provides for detention of up to 7 days for drug trafficking offences, allows for the presence of Customs Officers at interviews of suspects and allows inferences to be drawn by a Court from the failure of an accused to mention particular facts when being questioned by a Garda.

 The Proceeds of Crime Act, 1996 which provides a powerful new mechanism for the freezing and forfeiture of the proceeds of crime.

 The Disclosure of Certain information for Taxation and Other Purposes Act 1990 provides for more effective exchange of information between the Gardai (National Police Force) and the Revenue Commissioners.

 A number of measures to prevent money laundering have been taken under the Criminal Justice Act 1994. A specific offence of money laundering has been created and financial institutions are now required to report any suspicious financial transactions to the Money Laundering Investigation Unit in the Garda Bureau of Fraud Investigation. There have been 300 reports of such transactions made to the Gardai by Financial Institutions and these are currently being investigated.

 A major development in recent months has been the establishment by the Government of the Criminal Assets Bureau. This new body, which has staff drawn from the Gardai, the Revenue Commissioners and the Department of Social Welfare, will ensure closer co-operation between State agencies in dealing with money laundering as a result ot drug trafficking and organised crime. The Criminal Assets Bureau Act, 1996 has put the Bureau on a statutory footing.

 On the 3rd September this year, Ireland ratified the UN Convention Against Illicit Traffic in Narcotic Drugs and Psychotropic Substances. As a party to this convention, Ireland will bo able to play a full part in international co-operation against drug-trafficking, ranging from practical co-operation on drug trafficking at sea to judicial co-operation in obtaining evidence and confiscating the proceeds of drug trafficking.

 Further recent initiatives include the establishment of a Garda National Drugs Unit, a review of dance and pub licences to minimise drug dealing and abuse in such venues, measures to deal with the use of drugs in prisons. The Ministerial Task Force on Demand Reduction have announced new treatment, education prevention and rehabilitative measures. The provision of additional powers allows the Naval Service, Customs and Excise personnel and the Gardai to deal with drug trafficking at sea.

 Taken together the measures outlined will greatly enhance the powers of the State in tackling the problem of money laundering. The Minister has asked me to assure you of the Government's total commitment in the fight against crime.

 Yours sincerely,

 Private secretary

Laundering Concerns Vindicated - 16-10-96

 A scandal currently rocking the Channel Islands dependency of Jersey seems set to involve figures in senior political positions the Observer article states that, "Jersey's effective 'prime minister', Senator Reg Jeune OBE, its Chancellor Pierre Horsfall, and its Chief Judge Bailiff Sir Phillip Bailhache, have been embroiled in the Cantrade scandal involving allegations of racketeering, non disclosure of interest and suppression of parliamentary free speech"

 It seems unlikely given the close ties between the financial services centres particularly the Isle of Man and the Channel Isles that some of the "fall-out" from the affair will not land on Manx shores. The new revelations are particularly damaging as senior figures from both the USA and UK are quoted criticising the tax havens.

 New York District Attorney John Moscow is quoted as saying,"It is unseemly that these dependencies should be acting as havens for transactions that would not even be protected by Swiss bank secrecy laws. One has to wonder why Swiss banks would set up subsidiaries in these jurisdictions"

 Like the Channel Islands, the Isle of Man government has actively courted Swiss Banks and in September 1994 Manx nationalists who picketed a function for a visiting delegation of Swiss bankers came in for swingeing criticism. In hindsight the nationalist warnings were prophetic as subsidiaries of Swiss banks seem to be at the centre of the current Channel Islands scandal.

 More worrying for the Manx authorities are quotes attributed to the Secretary of the Bank of England, Sue Thornhill, who said last week, "unless we clean up and keep clean our offshore centres then we endanger the reputation of the United Kingdom"

 Scandals of the type now unfolding coming so close to a possible change of government in the United Kingdom are sure to fuel uncertainties about the future of the finance sector. In an aside to the main point of the Observer article its author, John Sweeney, places on record the Masonic Links of Jersey's Chief Minister, Reg Jeune. In this respect the Channel Isles seem to parallel the Isle of Man where many senior figures, including outgoing Chief Minister, are members of the, not so secret, society of Freemasons.

 J. B. Moffatt

CRUSADE AGAINST MONEY LAUNDERING WILL NOT BE DEFLECTED - 01-08-96

 The Celtic League, to a degree, has had warnings it issued in the past echoed by the regulatory and enforcement authorities - Manx Independent Oct. 6 1995 - "He (FSC Chief Executive) agreed with press comments by Celtic League spokesman Bernard Moffatt that detection of money laundering by Eastern Europe mafiosi could bring violent punishment for all involved". In the same article, D.I. Geoff Allen was quoted as saying "Russian criminal money had infiltrated the financial system of both the UK and the Isle of Man."Also, the Manx regulatory agencies were crass when they refused to release details of banks which had held the accounts through which the moneys recovered recently by the US DEA had passed. This blanket of secrecy was certain to cause concern.

 It is with a degree of satisfaction we note that within days of our comments about the need for greater European Police co-operation and our publishing the text of a resolution to go before the August meeting of the League, in Brittany, these comments were being echoed by the Irish government.

 The Celtic League will certainly not be deflected from pursuing this issue, either by the surprising tone of remarks, some provocative others more restrained, from spokespersons for the sector. It is a mark of the sector's sensitivity over the issue that such negative and intolerant attitudes to our expressions of concern is forthcoming. However, as an organisation we will not be drawn into trading insults over what is a very serious issue. The steps put in place to address this issue will be pursued. Contacts have already been established with sympathetic Parliamentarians in Britain and Ireland. It is likely that on the Breton visit, the host branch will arrange meetings with Breton based deputies of the French Assembly. In addition, a steady programme of dissemination of information continues.

 Enquiries have been received from various sources and information exchanged with journalistic contacts. The financial services sector will ultimately do itself nothing but damage if it continues to rubbish the growing concerns about money laundering articulated by the League and others. As usual, it doth protest to much - why is there something to hide?

 J.B. Moffatt, General Secretary

CALL FOR CRACKDOWN ON MONEY LAUNDERING

Celtic League Press Information - 08-05-96

 The answer of course is that they launder it and fortunately for them Ireland, with its own financial services zone connected to the easily accessible offshore tax havens in the Isle of Man and Channel Isles, is well placed to service these crooks. The Celtic League is a seasoned critic of the financial services sector now established in Dublin and the Isle of Man. In February of 1991 we specifically raised with the Manx Government's Chief Minister the question of the laundering of monies from para-military sources in Ulster through the Island. Our concerns were brushed aside only to see later in that year confirmation when Ulster newspapers indicated RUC concerns that accounts in Manx and Channel Isles Banks were suspected of being used by these groups. The Manx government remained complacent about shady transactions within its jurisdiction even when the doubts of its own regulatory body the FSC, and its lack of staff, were exposed in an article in Private Eye magazine on 24/5/91.

 The Manx government proudly proclaimed that "the world will get the message the Island is a no go area for money launderers" as it enacted amendments to its domestic Prevention of Terrorism Bill in 1992. The Celtic League remained critical, however, and its criticism was echoed by the Manx Nationalist Party, Mec Vannin, produced a detailed report on the Finance Sector in 1994. This contained the cryptic comment that there was, "evidence that the smiling face of the finance sector masks a deeper layer of out and out criminal activities," and went on, "no authority, least of all the Manx Government has systematically investigated the underworld of the Isle of Man finance sector".

 Heady stuff!; but in the view of some undoubtedly coloured by the fierce opposition of nationalists to the sector. Unfortunately for the Manx government, the next critique was to come from an establisment source. In October of 1995 the head of the Island's fraud squad, Det. Insp. Geoff Allen confirmed that money from criminal sources had infiltrated the Manx financial system. Speaking at a conference on money laundering held on the Isle of Man in October of 1995 he confirmed that illegal funds from both Europe and Latin America had passed through the Island. Meanwhile the head of the Island's FSC, Jim Noakes, was quoted as saying at the same conference, "Criminal business is already embedded in the financial system and some of us may already be working for criminals without knowing it. It's our problem - if we claim to be an international centre we are involved".