Sorry to fall asleep at the switch, but Gary Jeffers posts on The Privacy Digest and those of Black Unicorn and Critias jogged me to note that The New York Times had two articles on Friday about a UN conference on control of money laundering and the flight of German capital to Luxembourg banks to escape high taxes. Both articles describe the resistance of banks to government snooping, and how laws are being modified to try to keep up with increasing demand for cash havens and/or laundering. ------------------- Here's an excerpt from the first, "Laundering of Crime Cash Troubles U.N.": ". . . the skillful manipulation of dirty street money through former Soviet replublics, offshore banks and major stock exchanges, until it emerged as legitimate cash for buying and selling of a hotel in Bogota. As outlined today by officials in Naples at a major United Nations conference on organized crime, it is not just the growers, smugglers and assassins who make the worldwide drug trade a scourge, but a new breed of skilled money-managers, lawyers and other professionals in the pay of the mob. Devising ever more complex ways of laundering money, they handle an estimated $750 billion every year. . . . By long tradition, banking secrecy and numbered accounts were associated primarily with such financial bastions as Zurich, Vienna and Luxembourg, and the money came mainly from the drug trade. But, United Nations officials say, as these banking centers slowly yield a few secrets to narcotics investigators, a whole new array of less reputable banks are springing up across the former Soviet Union . . . . . . The world's increasingly coordinated and sophisticated crime syndicates, by contrast, now deal in everything from organs for transplant to nuclear materials; with their money laundered, they put their investments into legal business." For an e-mail copy of this article send blank message with subject: UN_nab -------------------
From the second article, "Germans in Tax Revolt Embrace Luxembourg", these excerpts:
"Since 1993, when the Finance Ministry in Bonn imposed a 30 percent withholding tax on interest income for residents, Germans by the thousands have used Luxembourg to carry out a quiet but powerful tax revolt. Carrying suitcases and plastic bags of cash, they have deposited $150 billion in Luxembourg bank accounts, placing it beyond the reach of the tax authorities in Bonn, and behind the screen of Luxembourg's rigid bank secrecy laws. . . . [Description of Germany's proposal that all European Union banks agree to withhold taxes on interest income for the various governments and the banks' demurs.] 'People think they are overtaxed and so they are looking at every way possible to avoid paying taxes,' said a banking lobbyist in Bonn who insisted on anonymity. 'We assume that if people deposit their money in Luxembourg, they will pay taxes. If they don't, that is a political problem for the government, not the banks. We are not policemen.' " For an e-mail copy of this article send blank message with subject: LUX_out