A crackdown on the estimated £2.5bn that is fraudulently laundered through black-market bureaux de change was announced by Tony Blair yesterday as part of efforts to starve terrorists of funds.
The assault on unscrupulous currency shops is aimed at what the Government views as the "soft underbelly" of efforts to shut down terrorist networks. Up to £4bn leaves Britain every year through exchange facilities, which currently do not need to be licensed in the UK.
Ministers estimate that 65 per cent of the money passing through bureaux de change comes from illegal sources, such as terrorist groups and drug dealers. Holidaymakers buying foreign currency represent just 8 per cent of transactions.
Money-laundering through bureaux de change is known to be a popular way for criminals to disguise the source of their funds and yet Britain is the only country in Europe that does not regulate moneychangers.
A Downing Street spokesman said: "Seventy-five per cent of heroin and opium comes from Afghanistan. There are clear links with bin Laden and there are concerns that he and his associates may be profiting from that."
The advent of the euro, which will become the currency of much of Europe from January, will make bureaux de change even more attractive to criminals, not least because of its high denomination notes.
Under counter-terrorism measures bureaux will have to report, as banks do now, suspicions about cash transactions that may be linked to terrorist groups. Police will get extra powers to investigate currency shops suspected of handling "dirty" money.
Emergency legislation will be brought before the Commons after MPs return this month, with a view to rushing the moves into law in weeks. A skeleton Bill is expected to be published when the Commons is recalled for its emergency debate on Thursday.
Mr Blair said the package would include the power to indefinitely detain asylum-seekers suspected of terrorist links and to deport them automatically and without the right of appeal. "I hope in this new situation people realise we have got to act," he told BBC1's Breakfast with Frost. "I hope that we will get support from all the political parties.
"I think our first duty has got to be to protect our citizens. We cannot have a situation in which it takes years to extradite people. We cannot have a situation in which people come in and abuse our asylum procedures and are then allowed to remain in this country claiming asylum. And we cannot have a situation where if we know someone is a suspected terrorist, we do not have the legal power to detain them indefinitely until we find a country to deport them to. Those are basic things that we need to be able to do to protect the security of our own citizens," he said.
In other moves, the assets of terrorist suspects will be confiscated and the Inland Revenue and Customs and Excise will gain extra powers to swap information with police. Although the Treasury insists Britain has strong measures on tracking down terrorist income, because of its experiences in Northern Ireland, further measures to combat money-laundering are being considered.
The police are likely to be given the power to monitor suspect bank accounts, instead of relying on financial institutions; and to freeze accounts at the start of an inquiry, rather than after evidence has been secured by which time much of the money may have vanished. The new legislation, not expected to include the immediate introduction of an identity card scheme, will allow money believed to be destined for terrorist activities to be sequestered even if it is clean.
Meanwhile, the Treasury said yesterday, another London bank account with suspected links to the Taliban had been frozen, bringing the total of suspected Taliban funds put on ice to £60m.
The Chancellor, Gordon Brown, is expected formally to announce the seizure of Taliban assets today. He is expected to use the announcement at the Labour Party conference in Brighton to call on all nations to ensure that there should not be any safe hiding place for terrorist funds.
Legislation concerning identity cards is expected to go before parliament next year but would probably take two or even three years to come into force. Carrying an ID card would become compulsory and they could replace both driving licences and passports.
Opponents of the scheme claim they would be of little use in the fight against terrorism but supporters believe they would give everyone an immediate and authoritative way of proving their identity and would also aid the fights against illegal immigration and social security fraud.
Other anticipated legislation will focus on racial discrimination and will attempt to outlaw discrimination against religious groups and incitement of hatred against them.Reuse content