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afrol.com / AENS, 19 January - Bill Clinton's final presidential legacy to the world will make it much harder for corrupt foreign officials to stash their ill-gotten wealth in the United States. The Clinton administration announced new banking guidelines on the eve of its departure from office on Friday requiring financial institutions to scrutinise the accounts of foreign political officials. The initiative is part of a growing US strategy to deprive corrupt officials of access to established financial markets in the West. While the guidelines are not legally binding, leading US financial institutions such as Citigroup and JP Morgan have indicated they will adopt the procedures. The guidelines were issued by a number of federal agencies including the Treasury Department, the Federal Reserve Board and the Department of State this week. The intention, outgoing Treasury secretary Lawrence Summers said, is to keep US financial institutions from "providing unintended assistance to corrupt foreign officials seeking to hide their ill-gotten gains". Anyone opening high-value dollar accounts in the US will have to disclose the purpose of the account, anticipated activity, their source of wealth, estimated net worth and references to corroborate the reputation of the depositor. The guidelines also warn banks to watch for potentially suspicious transactions that warrant enhanced scrutiny, such as channelling funds through several destinations to hide their origin. Banks will watch for requests by clients to establish a relationship with, or route a transaction through a financial institution that is unaccustomed to doing business with foreign persons. Any form of secrecy being attached to an account such as booking transactions in the name of another person or efforts to disguise the nature, source, ownership or control of the funds will be scrutinized. Banks have long been criticized for turning a blind eye to potential corruption and for possessing lax detection controls. Last year, allegations emerged that Moscow-based Sobinbank illegally funnelled about US$ 7 billion in Russian aid out of the country via The Bank of New York. While it is difficult to put a finger on the exact amounts of money that illegally find their way around the international banking system, some estimates put the figure as high as US$ 590 billion per year. "While government officials and the public at large in developing countries are increasingly embracing these initiatives, there is a widespread sense in these countries that the efforts of the international community lack balance," notes Frank Vogl of Transparency International. - Too often the new anticorruption zeal appears uniquely directed at public officials who take bribes and at corrupt systems in the developing countries and the countries in transition. Meanwhile, bribe givers appear to remain undisturbed. Many bribes paid in the course of international commerce originate in firms headquartered in the same industrial countries whose governments are now, more than ever, calling for new anticorruption campaigns in developing countries. Transparency International says that only the US has a law that specifically makes it a criminal offence for a company to pay bribes abroad. Last October, 11 major international banks: ABN AMRO, Citibank, J.P. Morgan, Barclays, Credit Suisse, Societe Generale, Deutsche Bank, UBS, HSBC, Chase Manhattan and Banco Santander adopted measures similar to the US guidelines aimed at corrupt businessmen, government officials and narcotic dealers. Investigations by the US Congress have found that Citigroup has held assets for the sons of the late Nigerian dictator Sani Abacha and Raśl Salinas de Gortari, a brother of the former president of Mexico, who is in prison for masterminding a murder. It also kept accounts for Asif Ali Zardari, husband of a former prime minister of Pakistan, who is in jail for corruption and President Omar Bongo of Gabon. - We have already put in place measures that meet the requirements of the new guidelines and we applaud efforts by the treasury department to curb money laundering," said Richard Howe, spokesman for Citigroup. An official of JP Morgan also said the institution has already been operating under similar conditions since the Bank was party to the decision adopted by major international banks in Geneva, last October. Under US law, a financial institution that engages in a financial transaction, knowing that the property involved in the transaction represents the proceeds of foreign official corruption can be charged. By Gumisai Mutume, African Eye News Service (AENS)
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