Speaking on the BBC, the chancellor said there was a need to deal with the ‘weakest link’ – those financial institutions with no international reporting obligation.
He said it was ‘necessary to create a wider obligation on financial institutions to have a system of reporting so that there is no safe haven for terrorists’. This, he said, would be the UK’s proposal to the EU and G7.
The announcement comes as the UK treasury steps up its own efforts to track down suspicious bank accounts. It has already closed down one account at a Barclays Bank branch in Notting Hill as well circulating a list of suspicious individuals to financial institutions.
In addition, the National Criminal Intelligence Service is to receive more powers and money to track terrorist funds.
The UK has joined a growing global campaign, spearheaded by the US Treasury, to fight international money laundering. Terrorists involved in the bombing of the World Trade Centre and the Pentagon last week, which killed an estimated 5,000 people, and other criminal networks are funded by monies hidden in bank accounts around the world.
Furthermore, law enforcement officials believe that by following the ‘money trail’ they will be lead directly to the terrorists themselves.
In Washington, bank regulators have asked all US banks to check their accounts for transactions that might involve any of the 21 people believed to be behind the attack, as well as all known associates of Osama Bin Laden, the suspected mastermind of the bombings.
Bin Laden reportedly withdraws $50m (Pounds 34m) a year from investments made in Saudi Arabia dating back to his youth.
International watchdogs like OECD and the Financial Action Task Force have been campaigning for greater transparency in offshore financial institutions and tougher anti-money laundering measures. Both have compiled blacklists of those countries that have insufficient procedures in place.
The UK has, in turn, pressurised the FATF to push all countries to report transactions suspected of being linked to terrorism, even when the money comes from legitimate sources.
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