Berlusconi Marching To Different Drummer Over Money Laundering

by Ulrika Lomas, Tax-News.com, Brussels

16 October 2001

As the rest of the world re-examined their banking secrecy and anti-money laundering rules and found them wanting in the face of the terrorist activity in America, Italian Prime Minister Silvio Berlusconi looked at his country's legislation and came to an entirely different conclusion.

Earlier this month, after a heated two day debate, the government approved a law which will make it more difficult for Italian magistrates to investigate suspicious cross-border transactions, and in September, a bill was passed partially decriminalizing false accounting, shortening the statute of limitations in such cases, and reducing the penalties for those found guilty.

Cynical observers have suggested that in introducing these measures, which fly in the face of current international opinion, the Prime Minister may have more than the interests of the Italian people at heart. Although Mr Berlusconi's supporters claim that the new rules will protect individuals from prosecution based on false documents, critics feel that the fact that the Prime Minister is himself being investigated for tax fraud, false accounting, and bribery, may have something to do with the new developments.

European authorities are worried about the effect that Italian defiance will have on the international crackdown on terrorist funding, and feel that in pursuing his own interests, Mr Berlusconi may be inadvertently aiding terrorist groups, international tax evaders, and money launderers. 'We are worried that the application of the Italian law could slow international judicial cooperation,' confirmed Heinrich Koller, director of the Swiss Federal Office of Justice.

Mr Berlusconi has claimed that his country is America's biggest European ally in the war on terrorism, but so far, has spent too much time with his foot in his mouth to be of any real use to Dubya - just 15 days after the attacks in New York and Washington he elicited widespread condemnation by claiming that Western civilisation was inherently superior to that of Islam.

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