Trillions Ron, Trillions.

New Zealand First MP Ron Mark today (Sept 13) released an email alleging that gangs were highly valued corporate customers of big banks, getting preferential treatment and good interest rates with no questions asked about where the money came from.

Hardly surprising news Ron, The USA banking boondoggle and taxpayer welfare to Wall Street pales beside the revelations that a Trillion dollars a year* is laundered in India primarily ‘drug money’. What self respecting bank manager wouldn’t welcome that liquidity. (*from the 2008 International Narcotics Control Strategy Report, prepared by the US Department of State)

Mr Mark gave details in Parliament of the allegations. Cabinet Minister Phil Goff responded he would be willing to investigate the claims. “I would be very concerned if the information contained in that email is correct; that corporate people are facilitating the laundering and banking of money by gang members.”

The email released to NZPA was written by a man who said he used to be a corporate banker.
“It’s not common knowledge but most of the major gangs are corporate customers (the biggest and best) of the trading banks, with their own managers, exchange and money market dealers, enjoying risk grade A (the best) interest rates. And their key staff enjoy preferential services and interest rates too.”

The man said that in the late 1980s and early 1990s when only major companies could afford financial information services such as Reuters, which gives up to the minute foreign exchange and shares information, “the Mongrel Mob was so equipped”.

“Of course gangs run legitimate operations, which presumably are fantastic ways to launder money.”

He said far tougher measures were needed to get at the money behind organised crime. Mr Mark said life should be made difficult for gangs by outlawing them and have high level investigations into the money side of organised crime. Mr Goff said the Government was watching closely how effective the serious and organised crime legislation that had just come into effect in Australia was.

He said the Government had tightened controls on financial institutions to clamp down on money laundering and taken other measures. The email writer said he had had to move his business because of a Headhunters gang pad next door. Source: Stuff

However, consider…..

Financial institutions are facing costs in the “hundreds of millions” to comply with new money laundering legislation, but the effort will have little effect and cost IT organisations dearly, according to Kiwibank CEO Sam Knowles.

The laws, aimed at preventing money-laundering and the financing of terrorism, and other regulations governing big-money transactions have yet to be finalised. It is proposed that the regime apply not just to financial institutions but to other big-money businesses such as real-estate and jewellery sales.

However, speaking at the government’s Managing Identity conference, held in Wellington last month, Knowles said that policing such transactions will cost hundreds of millions of dollars and will have “little result”. The task of checking the provenance of large transactions is likely to rebound on bank ICT departments as well as on other business units.

The Ministry of Justice has commissioned a report from consultancy Deloitte on the financial impact of complying with the proposed regime, but this will likely lead to just minor tweaks to the regulations, according to the department’s spokesman, Gregor Allen.

The ministry has consulted fully with industry over more than a year so any amendment to the core legislation is unlikely, he says.

“The banks understand that a lot of this is mandated by international agreement,” says Allen. And for a New Zealand bank to decline to “follow in the slipstream” would be to risk being cast adrift from vital international banking links.

The anti-laundering push is being coordinated by an inter-governmental body called the Financial Action Task Force (FATF).

Most New Zealand based banks are already coming under pressure from their Australian owners to quickly put in place policies that the Australians have implemented since about 2005, says Allen.

Kiwibank is, of course, New Zealand-owned and, coincidentally, is running an advertising campaign depicting the bank as part of a resistance movement against foreign domination. (Yahoo! A Republican Bank / Blair)

Deloitte’s report is expected to be completed in a week or two, says Allen.

This will then set in motion the time-frame for policy to be approved by Cabinet around mid-year and legislation to be passed before the end of the year.

http://computerworld.co.nz/news.nsf/scrt/7A7BB9A1918F0357CC257447006E1546

Blair Anderson ‹(•¿•)›

MildGreens's Backup Blog