Financial surveillance:
Paris-based plot alters world

Paris-based FATF claims their surveillance regime targets money launderers. It does not. The real target is you.

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Working hand-in-hand with the OECD in its effort to dismantle financial privacy worldwide is the Financial Action Task Force on Money Laundering (FATF).

Where the OECD's efforts concentrate on so-called "unfair tax competition", the FATF has apparently set out to deal with the issue of money laundering. According to the FATF, the cure for this menace is global financial surveillance and the ending of bank secrecy worldwide.

It should be noted that whilst the FATF claims to be totally independent, it is based at the OECD's Paris headquarters. Just as the OECD, it uses media smear campaigns and publishes blacklists of offshore havens that are supposedly inviting to money laundering. This again serves to put undue pressure on offshore financial centres with the intention to force them to comply with the FATF's dictat and throw bank secrecy out of their national legislation.

FATF's tactics ineffective
against global crime

Many criminologists disagree with the FATF core belief that financial surveillance is the key to combating money laundering. Sophisticated criminals and professional money launders are well aware of the tactics of the Parisian bureaucrat and can avoid detection.

			FATF's campaign of financial surveillance is putting more money in the pockets of professional money launderers.

Some have gone yet further and suggested that the FATF has created a profitable new enterprise for organised criminal networks. Pino Arlacchi, a United Nations official, reports: "Criminals now pay around 20 percent in laundering commissions. Just a few years ago, they were paying only 5 to 6 percent."

As the FATF is "succeeding" in driving money laundering underground and making it harder to detect, law-abiding society is paying a heavy price in terms of increased surveillance and loss of the ancient right to financial privacy.

The phoney "Recommendations"

Central to the FATF mission is a dictat along the lines of a papal decree, disarmingly entitled "The Forty Recommendations to Combat Money Laundering".

In fact, the Recommendations are a rigid set of rules expressing the FATF's false notion that identification and surveillance must become an integral part of our financial systems if we are to combat money laundering.

The FATF urges all sovereign states -- and offshore havens in particular -- to incorporate the Recommendations into national legal systems. The FATF monitors the progress of implementation, and those nations that are unwilling to submit to the FATF's bullying are labeled "uncooperative" and blacklisted as such.

The use of the term "recommendations" is deceitful in itself, as non-compliance with the Recommendations carries the threat of economic sanctions.

In addition, appearing on the list of "wrongdoers" means seeing the country's financial reputation ripped to shreds in the international press. This can result in capital flight and loss of investor confidence for the country concerned, and so directly affect its economy.

Due diligence or
the snooper's charter?

In practical terms, the FATF Recommendations seek to establish structures within which bank clerks and other financial professionals are turned into unpaid spies and informants of the state. Bank staff, real estate agents, lawyers, and just about anybody who handles money is now being told:

"Always suspect your client might be a money launderer. Investigate and report, even if in doubt, but don't tell the client you've done so. Nothing will happen to you, even if you get it wrong and report an innocent person."

			FATF seeks to establish structures within which bank clerks and other financial professionals are turned into unpaid spies and informants of the state.

Sounds far-fetched? Here it is, in the FATF's own words, taken straight from the Recommendations that have been -- or are being -- incorporated into law around the globe:

"Increased Diligence of Financial Institutions

"14. Financial institutions should pay special attention to all complex, unusual large transactions, and all unusual patterns of transactions ... The background ... of such transactions should ... be examined, the findings established in writing, and be available to help supervisors, auditors and law enforcement agencies.

"15. If financial institutions suspect that funds stem from a criminal activity, they should be required to report promptly their suspicions to the competent authorities.

"16. Financial institutions ... should be protected ... from criminal or civil liability for breach of any restriction on disclosure of information ... if they report their suspicions ... even if they did not know precisely what the underlying criminal activity was, and regardless of whether illegal activity actually occurred.

"17. Financial institutions ... should not be allowed to warn their customers when information relating to them is being reported ... "

Offshore tax havens and bank secrecy
the real target, not money laundering

The fight against money laundering is but a useful cloak used to obscure the true intentions of the FATF. The real target are offshore financial centres and the overtaxed corporations and individuals who are attracted to them.

Despite its claims of independence, the FATF is in fact an extension of the OECD's Fiscal Affairs Committee, an organisation that would like to see an end to any form of financial tax planning.

			FATF is providing the OECD with additional ammunition with which to shell "uncooperative" offshore tax havens.

To help reveal the FATF's true intentions to those still naively trusting that the organisation might in fact be fighting international crime on behalf of all the good citizens of the world, let's turn our attention to a July 1999 meeting, where the Paris-based conspirators sought to carve the world's financial systems in their own image.

Recommendation 15 originally read as follows:

"15. If financial institutions suspect that funds stem from a criminal activity, they should be required to report promptly their suspicions to the competent authorities."

At the July 1999 meeting, the following fascinating footnote was added:

"In implementing Recommendation 15, suspicious transactions should be reported ... regardless of whether they are also thought to involve tax matters. Countries should take into account that, in order to deter financial institutions from reporting a suspicious transaction, money launderers may seek to state inter alia that their transactions relate to tax matters."

So the crook is now pretending to be a tax cheat, is he? We think not.

The crux of the issue lies in the fact that most offshore financial centres and banking havens -- including Switzerland -- consider foreign tax evasion as non-criminal behaviour. Offshore bank accounts have traditionally been protected from any legal action to verify the existence of, or attempts to seize, any assets in relation to tax offenses.

At a time when the OECD is trying to blur the line between legal tax avoidance and criminal tax evasion, the FATF is attempting to convince offshore bankers that international money launderers might in fact be disguising themselves as tax cheats!

The "independent" FATF is providing the OECD with additional ammunition with which to shell those offshore financial centres that might have put up sufficient resistance against the initial "unfair tax competition" campaign. Who wants to be seen as harbouring money launderers, after all?

Next document  >>  How it affects you: Financial surveillance in action

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