Abu-Ghazaleh: Israel Biggest Center for Money Laundering in Region
29 Apr 2003Ever since the “war on terror” has become one of the top international priorities –and particularly American priorities- talk about suspicious funds has come back to the forefront, in conjunction with American pressure on all countries to tighten their preventive money laundering procedures. This reality has imposed a new challenge before banking systems worldwide and in particular on those in the Arab countries, as the USA asks them in particular to tighten the noose on what it calls “terrorism”.
Indeed, Arab states have rushed to modernize strict legislations to control any suspicious transfers or accounts. Lebanon was able to modernize legislations that keep down money laundering activities while at the same time still preserve banking secrecy.
These points and others including the definition of suspicious funds, the challenges and responsibilities of parties concerned with this issue, were the main focal points of a seminar organized by the Preparation and Training Institute of the Bank of Lebanon entitled “Monitoring Systems, Procedures and Responsibilities for Suspicious Funds”.
The seminar took place Saturday. Participating in the seminar was the Deputy Governor of the Bank of Lebanon Fahim Midad, Chairman of the Arab Society of Certified Accountants (ASCA) Talal Abu-Ghazaleh, and President of the Preparation and Training Institute of the Bank of Lebanon Dr. Mohammed Alnafi, in addition to other participants from various departments, branches of the Central Bank, banking and financial institutions’ employees, and guests from abroad Lebanon.
Mr. Midad pointed out to the intense international efforts to fight the proliferation of the phenomenon of dealing in suspected funds, as the G-7 summit convened in Paris in 1989 decided to create the Financial Action Task Force on Money Laundry (FATF) which later became a pioneering institution in the area of combating money laundering.
Its responsibilities include promoting awareness of all countries of the negative aspects of money laundering, issuing recommendations in this regard and reviewing the money laundering tendencies in all nations on a continuous basis. This body includes 29 countries in addition to two regional organizations which are the European committee and the Gulf Cooperation Council (GCC).
On his part, Abu-Ghazaleh emphasized that money laundering is one of the most dangerous financial crimes, and has negative repercussions on the economy and society since it is a common denominator for all types of crime and illegal activity.
He defined money laundering as a group of procedures that aim to obscure the real source of funds and assets resulting from illegal activities and then falsely adding the quality of legitimacy to these funds and pumping them back into the national economy.
Abu-Ghazaleh stressed the importance of the nation’s role in defining and recognizing suspicious funds, saying that money laundering is characterized by constant change and renewal and “contributing to this is the enormous development in available technologies and the introduction of new financial and banking innovations and tools. This, in addition to the deepening integration between financial and banking systems across borders such that those tools and procedures have become so complicated that their users are challenging law enforcement, whether the laws in question were put in place by national bodies or international institutions for combating money laundering.”
As for the role of external auditors in fighting money laundering, Abu-Ghazaleh highlighted that the guidelines and instructions issued from relevant international or domestic parties in the area of battling money laundering emphasized the role of these auditors. These guidelines and instructions state that the role of auditors is limited to disclosure of the extent to which relevant parties apply laws, legislations and instructions relating to money laundering combat, and reporting any suspicious cases they note to the proper authorities till they are resolved. He showed that many countries, and particularly those that have their national income dependent on financial activities, offer facilities for smaller entities that permit the growth of weapons and drug-smuggling.
According to a report by the US State Dept., what is known as “Israel” is considered a major center for money laundering, Abu-Ghazaleh said. He elaborated that the report states –according to confirmations by the government and security officials in this area- that money launderers use the advanced infrastructure in Israeli banks, adding that “ at present, criminals in Israel cannot be taken to court for money laundering, as there is no law specific to this phenomenon. Additionally, the availability of strict secrecy at banks and immigration policies is utilized by those related to organized crime”. These are all factors that encourage the Israeli entity to be a center for money laundering, he added.
He indicated that related governmental parties issued laws, guidelines and instructions that when applied should assist in the contention with money laundering. Accordingly, these mean that certain designated parties need to address the following:
1- Ensuring the extent of adherence of related parties to apply these laws and instructions in their work activities.
2- Informing on cases of non-compliance with above mentioned rules and regulations.
3- Informing on any cases that might contain incidents of money laundering or suspicious funds, to the proper authorities.
The seminar also included feedback by researchers Hussein Shehadeh, Tawfiq Ayoub and Hikmat Salim.
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