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US Banks Place Blanket Ban on Vanuatu

Tax-news.com

31 January 2000


Concerned about recent allegations of money laundering for the Russian mafia, US banks have placed a blanket ban on transfers with financial institutions in the South Pacific region. The main jurisdictions affected are Nauru, Western Samoa and Vanuatu - where two major Australian banks, Westpac and ANZ, have been unwittingly caught out by the knee jerk reaction of the US banks because they have offshore subsidiaries there.

The ban is a result of concerns over a report issued last year by the OECD's Financial Action Task Force which said that Vanuatu is a "jurisdiction of prime concern" for money-laundering based on allegations by the US Government that there was a heavy concentration of financial activity linked to Russian crime syndicates in the South Pacific.

The head of ANZ Bank's Pacific division, Bob Lyon, told an Australian newspaper last week that he was extremely concerned about the impact of the ban. "Our concern is that the blanket ban by the US banks is affecting day-to-day trade finance with Vanuatu. They are affecting the livelihood of ordinary business people - importers, exporters and tourists - and I think it will affect our profitability if the bans gather momentum," Mr Lyon said.

The Vanuatu Financial Services Commission was also quick to criticise the ban, pointing out that Vanuatu was one of the first offshore jurisdictions to criminalise money laundering in 1989. "The US Government is well aware of this... We believe it is being purposely done, because it does not suit foreign authorities to have any offshore jurisdictions that they don't control," said Thomas Bayer, the Chairman of the Vanuatu Financial Services Commission.

Both of the Australian banks have offered their support to the Vanuatu Government, who have sent a delegation to New York to convince the US banks to rescind the ban pending the outcome of an audit of Vanuatu's banking practices and regulation by the Financial Action Task Force in March.

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US IRS condemn Vanuatu Offshore bank. Audit and prosecute the illegal practice of Vanuatu offshore bank practice in the US.

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