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Caymans to tackle dirty money

Peter Rodgers Financial Editor
Monday 23 September 1996 18:02 EDT
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The Cayman Islands, the secretive Caribbean financial centre, said yesterday it had taken new powers to stamp out money laundering and seize the proceeds of crime.

The campaign to clean up the image of the British dependency follows sustained pressure since the 1980s from the US and the UK government, and is being carried out with the help of British officials.

It includes the establishment next January of a new Monetary Authority to combine the functions of the present currency board and financial supervision department.

The Monetary Authority, modelled on those in Hong Kong, Singapore, Bahrain and Bermuda, is being set up with the advice of Richard Chalmers, a Bank of England supervision official responsible for liaison with overseas financial centres.

The staff of 26 is to be built up to 40 and John Flemming, the inspector of financial services, will take over as head of the authority. His predecessor, Jennifer Dilbert, is now managing director of Morgan Grenfell in the Cayman Islands.

The tougher stance was welcomed by the Foreign Office, which said: "This decision marks an important step in the Caymans' fight against international money laundering and will help to ensure that the islands are not used to hide or launder illicit proceeds."

Although the Caymans have been a notorious centre for money laundering and brass-plate companies, bankers say their record has improved since the late 1980s, when a Misuse of Drugs Law was passed.

In future it will be a criminal offence if a financial services provider fails to report suspicions that a client has been engaged in or benefited from crime.

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