*EPF210 07/02/2002
IDB Approves Grant to Fight Money Laundering in Latin America
(Fund will fortify intelligence work in eight South American nations) (430)

Washington -- An investment fund administered by the Inter-American Development Bank (IDB) has approved a grant of $1,230,000 to assist eight South American countries in combating a financial crime called money laundering.

The IDB's Multilateral Investment Fund will support national efforts to either create or strengthen Financial Intelligence Units, which track and analyze transactions suspected of being money-laundering operations. The Units cooperate with the courts, and with intelligence and law enforcement agencies in other countries to gather the necessary information to build criminal cases and curb illegal financial activities.

The operation will be carried out by the Inter-American Drug Abuse Control Commission of the Organization of American States and will benefit Financial Intelligence Units in Argentina, Bolivia, Brazil, Chile, Ecuador, Peru, Uruguay, and Venezuela, the IDB said in a formal statement.

Regarding U.S. efforts against money laundering, Treasury Deputy Secretary Kenneth Dam said June 27 that his department combats international financial crime bilaterally through undercover criminal investigations, usually with the cooperation of foreign governments. The United States also works multilaterally through such organizations as the Financial Action Task Force on Money Laundering, which Dam said has been "particularly effective" in combating the problem. This Task Force was established in 1989 to develop a coordinated international response to money laundering.

The State Department's Assistant Secretary of State for Western Hemisphere Affairs, Otto Reich, said in April that the Bush administration is concerned about international terrorists "abusing" the region's financial system to raise funds or launder money. Reich said the administration has encouraged all nations in the Western Hemisphere to ratify the 12 international counter-terrorism treaties in order to "identify and seize the financial assets of terrorism, to punish terrorism in all its forms, and to strengthen border controls."

In simple terms, money laundering is conduct or acts designed in whole or in part to conceal or disguise the nature, location, source, ownership, or control of money to avoid a transaction-reporting requirement under state or federal law. Laundering is used to disguise that the money was acquired by illegal means.

In another development, the IDB also announced that its Multilateral Investment Fund has approved $5,576,000 in grants to promote private investment, strengthen regulatory and financial systems, and assist small business and industry in four Latin American countries.

The grants will go to small businesses and industries in Argentina, Brazil, Mexico, and Paraguay.

The Multilateral Investment Fund promotes private-sector development in Latin America and the Caribbean through grants and investments.

(Distributed by the Office of International Information Programs, U.S. Department of State. Web site: http://usinfo.state.gov)

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