Gulf Bankers Urge More Information Sharing To Combat Money Laundering

by Lorys Charalambous, Tax-News.com, Cyprus

13 November 2001

Speaking at a conference on financial crime last week, a number of banking experts and senior officials called for greater inter-bank co-operation and information sharing in an attempt to rid the Gulf of its reputation as an easy target for money launderers and tax evaders.

The Gulf region, and in particular the offshore financial centre of Dubai, has come under criticism recently, viewed by the United States and other western countries as vulnerable to terrorist money laundering and large scale tax evasion due to a relatively large expatriate population, central location, laissez-faire economic policies, and sophisticated banking system.

Although a number of anti-money laundering and evasion measures have been hurried through since the September 11th terrorist attacks, banking experts feel that without co-operation between the region's financial services providers, the new provisions will prove ineffective.

'If as an industry we want to make progress we cannot continue working in isolation,' explained Andrew Duff, head of corporate banking for Standard Chartered Bank in the Gulf. 'We have to try and create a framework where people can talk to each other. If we don't, these efforts risk being compromised.'

According to speakers at the conference, one of the main flaws in the region's regulatory regime at present is that if banks or other institutions have concerns regarding suspect transactions and individuals, they can only really share them with the regulator.

It was therefore suggested that an information sharing framework, similar to those employed in the jurisdiction by the oil and telecommunications industries, should be established, although the bankers noted that this would involve the curbing of competitive instincts in the banking sector. 'We have to remind ourselves that banks do not compete on money laundering,' observed Mr Duff.

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