WASHINGTON -- The United States and its economic allies are giving Russia, the Philippines and the Pacific island nation of Nauru until Sept. 30 to crack down on money laundering or face new, tighter sanctions.
The 26-nation financial task force that includes Britain, Japan and other industrial powers issued a report Friday singling out the three countries as having failed to make progress in fighting money laundering over the past year, when they were named on a new "blacklist" with 12 other countries and territories.
The new punishments could include requiring U.S. and other banks to gather detailed information before doing business with companies or individuals from the three countries, or warning international companies away from them. Measures will take effect Sept. 30 unless the Russian, Philippines and Nauru governments "enact significant legislation before then to address these problems," the Treasury Department said in a statement Friday.
Treasury said it supports such sanctions against countries that refuse to make "constructive legal reforms" to combat money laundering and said the Bush administration "remains firmly committed to this global battle."
Several Democratic lawmakers expressed concern recently after the Bush administration disclosed it is reviewing federal rules designed to fight money laundering, saying they may be burdensome for U.S. banks without achieving their goal. The lawmakers are pushing legislation to give the government new authority over U.S. banks that do business with foreign banks and customers.
The U.S. banking industry has been shaken in recent years by several high-profile scandals involving the funneling of illicit profits from drug trafficking, foreign political corruption or other criminal activities through accounts in major banks. In money laundering, such dirty money is moved through a series of bank or brokerage accounts to make it appear to be proceeds of legitimate business activity.
Treasury Secretary Paul O'Neill ordered the major review of anti-money-laundering regulations as part of a study of all department functions aimed at finding out whether taxpayers get value for the money being spent.
The international task force, part of the Organization for Economic Cooperation and Development, also issued a revised "blacklist" of countries and territories deemed uncooperative in fighting money laundering. The designation is considered a major embarrassment for countries on the list.
Removed from the original list, on grounds they made significant progress over the year, were the Bahamas and the Cayman Islands in the Caribbean, Liechtenstein in Europe and Panama.
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