From: John Young <jya@pipeline.com>
Date: Sat, 26 Nov 94 15:44:10 PST
To: cypherpunks@toad.com
Subject: NYT on Hiding Cash (Re: Privacy Digest)
Message-ID: <199411262343.SAA24904@pipe2.pipeline.com>
MIME-Version: 1.0
Content-Type: text/plain


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