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American Morning

Target: Terrorism - Money Laundry

Aired October 01, 2001 - 09:33   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
PAULA ZAHN, CNN ANCHOR: Britain has frozen some $90 million in assets linked to the ruling Taliban regime, and in the aftermath of the terrorist attacks, the British government is working on legislation to crack down on money laundering.

Other nations are also trying to help cut off funds for terrorists, but in some places it is an uphill struggle; as CNN's Lisa Barron reports from Hong Kong.

(BEGIN VIDEOTAPE)

LISA BARRON, CNN CORRESPONDENT (voice-over): In an area of the world where money can move in many mysterious ways, the United States may find good intentions are not enough to pinch off the flow of funds to terrorism.

In Asia, money laundering laws often are lax, and under the table transactions are common. Take the Philippines as one example.

UNIDENTIFIED FEMALE: As far as money laundering is concerned, that would be the worst case, would be the Philippines. And we're not just talking here terrorist from the Middle East. I mean, money is being laundered here by public officials.

BARRON: Until now, the lack of a law against money laundering has prevented the Philippines from investigating potentially shady transactions. Hong Kong may offer more hope.

SAMUEL PORTEOUS, KROLL ASSOCIATES: Hong Kong is the financial out for Asia, so to the extent there's terrorist activity and fronts moving through the region, it's very likely they're coming through Hong Kong. Bin Laden has been said to have outlets in Philippines, Indonesia and Malaysia.

BARRON: Hong Kong officials say the territory is ready to freeze any of bin Laden's or his associates' assets it finds, once new regulations are drawn up in October.

(on camera): But, regulations can't govern the underground banking system prevalent in south Asia and the Middle East, it's called the Huala (ph), a trust based system involving local brokers in different countries. Money never crosses borders, instructions to pay and receive do. BARRY RIDER, INSTITUTE OF LEGAL STUDIES: The only agency really in the world that's had any great success is the Director for Revenue Intelligence in India. And frankly, there's not the expertise in traditional law enforcement agencies to pursue these inquiries.

BARRON (voice-over): Extraordinary times, say experts, require extraordinary measures.

STEPHEN VICKERS, PRICEWATERHOUSECOOPERS: This is, in fact, an attempt to cut off the oxygen, as it were, to organizations. So, that bride I think needs probably to be attacked from two ends: One is the traditional follow the money, and the other is through the investigative and intelligence aspect.

NEIL MALONEY, HILL & ASSOCIATES: Intelligence is a key to it. Intelligence and long term planning, and long term targeting of the right people. But it takes -- it's a very expensive process to go through, and you need to put -- it's not a question of when you think of an undercover operation, sending somebody in and that's it, and he comes back a month later with all the evidence. It doesn't work like that.

BARRON: But, with the cooperation and the will, say experts, it's possible to make significant advances in the economic war on terrorism. Hopes that from these ashes, the evil acts perpetrated here will never again come to be.

Lisa Barron, CNN, Hong Kong.

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