French MP attacks City for lax money laundering rules

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The Independent Online

A French parliamentary committee has castigated the City and offshore Crown Dependencies for having controls so lax they invite money laundering.

A report by the group, led by the French MP Arnaud Montebourg, was accompanied by a dossier that found up to 40 British banks, companies and individuals were suspected of having links with Osama bin Laden, who is accused of masterminding last month's attacks in the US. It said that Mr bin Laden could have links to more than 500 banks, businesses and charities across the globe.

Mr Montebourg, a member of French Prime Minister Lionel Jospin's Socialist party, demanded Britain crack down on money laundering. "Tony Blair, and his government, preaches around the world against terrorism. He would be well advised to preach to his own bankers and oblige them to go after dirty money," he said.

The 400-page report accused the City of ignoring its money-laundering regulations, such as the obligation to report suspicious transactions, and of having a culture of secrecy. "The City is an impenetrable fortress with a status, rights and customs of its own, a closed universe where every financier, banker or businessman chooses silence above all else," it said.

The French study said it had taken too long for the Financial Services Authority to be given real powers and added that the National Criminal Intelligence Service had insufficient resources to tackle the problem.

The report was dismissed by the Treasury, the FSA and Downing Street, as out-of-date and full of errors. The Prime Minister's official spokesman said: "We reject this report.... It was inaccurate ... before 11 September, and it is even more inaccurate now."

Government sources said the information on Mr bin Laden and his network contained nothing new and appeared to confuse the legitimate business interests of the wider bin Laden family and those of Mr bin Laden.

Mr Montebourg's broadside said the British authorities were unacceptably slow in responding to other countries, citing a tardy response to a request to freeze the British accounts of Sani Abacha, the former Nigerian dictator. "Even the Swiss cooperate more than the English," Mr Montebourg said.

The report condemned the role it said Britain's Crown Dependencies played in handling dirty money, including Gibraltar, Jersey, Guernsey and the Isle of Man. "It is high time that Europe got worried about sheltering in its midst these veritable machines that launder criminal money," it said, blaming Britain's common law system for many of the failings.

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