Commentary: Fighting crime calls for co-operation

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The Independent Online
To the hundreds of experts in fighting financial crime who are meeting this week at Jesus College, Cambridge, our parochial interest in the Maxwell affair and BCCI are just a couple of new incidents in a depressing worldwide pattern. Most years over the past decade the money launderers, thieves and swindlers have provided some new extravaganza as a backdrop to the conference.

Richard Blum, a Californian criminologist, listed some of the biggest - the Credit Suisse Chiasso operation, when hundreds of millions of pounds worth of illicit Italian capital flows were diverted and stolen; Banco Ambrosiano, a billion- dollar theft; the Australian Nugan Hand Bank, which embarrassed Australian and US intelligence agencies and police; a bank looting scandal in the Bahamas; the US savings and loans collapse. There were Panama and General Manuel Noriega; the disappearance of dollars 260m from a Polish government agency; the illegal channelling of dollars 4bn to Iraq through an Italian bank in Georgia; and the shooting of an African central bank official who refused to use IMF money to build palaces.

Faced with this flood of wrongdoing, police and regulators tend to feel under- funded and poorly staffed and their first reaction is to ask for more resources, a plea heard again in Cambridge this week.

But, if there have been successes recently in fighting economic crime, the evidence is that they are often more to do with improving international co-operation than with swelling the payrolls.

A decade of intense economic pressure from the US on Caribbean offshore centres removed many of the worst abuses. The pressure has been economic, through threats to withdraw business or ban US financial institutions from the countries concerned. Only Panama and Colombia are now regarded as serious problems. The same pressures have been at work in Europe, where Swiss banking secrecy has been breached and even Liechtenstein is being rattled into slightly more openness by the Maxwell affair, a change of heart likely to scare away some of its more criminal customers.

Real results in fighting financial crime depend on high-level political commitment and arm-twisting as well as liaison between regulators and a constant attack on secrecy. And for the next few years the most important target of this process should be Eastern Europe, where bank regulation has not kept up with free markets, providing a fertile breeding ground for the next BCCI.