Albion Monitor /News

U.S. Rejects Conference to Fight Money Laundering

by Thalif Deen

(IPS) UNITED NATIONS -- The United States has rejected a proposal for a new U.N. global convention against money laundering.

The proposal, made before the current session of the U.N. Economic and Social Council (ECOSOC), was initiated by Mexico and Colombia and backed by Portugal and Germany.

"It would be more productive to concentrate on the fulfilment of existing regional initiatives than to set up a global convention," Ambassador Jane Becker of the U.S. delegation told the ECOSOC meeting in late June. "The development of a new convention may overburden governments struggling to comply with existing agreements."

"The monetary value of traffic in drugs now exceeded the value of the international trade in arms and in oil"

Last year, Washington also shot down a proposal by Mexico for a U.N. summit to combat the illicit production and sale of narcotic drugs. The United States, which is seeking a moratorium on all U.N. conferences, said a summit meeting on drug trafficking could not be justified, particularly as a cash-strapped United Nations was facing its worst financial crisis ever.

Robert Gelbard, U.S. Assistant Secretary of State for International Narcotics and Law Enforcement Affairs, said that U.N. conferences or summits that lacked "clear justification have very limited utility." The money "should be spent on fighting the problem, not talking about it."

Ambassador Ahmad Kamal of Pakistan today challenged a U.N. estimate that drug trafficking amounts to about $120 billion a year. "That figure is not credible and is outdated," Kamal told the ECOSOC meeting.

Nora Owen, Irish Minister of Justice, said money laundering undermined legitimate economic structures and distorted the world trading system. Ireland, which assumes presidency of the 15-member European Union next week, plans to make drug control a high priority. Owen placed estimates of illegal drug profits at $300 billion.

But both Mexico and Australia said that profits from the drug trade may be greater than those of the oil and arms industries.

The world's arms trade alone is estimated at more than $800 billion annually.

"There is a nexus between narcotics and clandestine arms trade, international crime, corruption and money laundering," Ambassador Richard Butler of Australia told delegates. "The monetary value of traffic in drugs now exceeded the value of the international trade in arms and in oil."

Estimates are in the order of several hundred billions of dollars a year

In a report released in February, the Vienna-based International Narcotics Control Board (INCB) said that rising profits from the global drug trade are outstripping the national wealth of both rich and poor nations.

The INCB said the amounts of money involved in drug trafficking were assuming such proportions they are now capable of tainting or destabilizing global financial markets.

"Estimates are in the order of several hundred billions of dollars a year and exceed the gross national product (GNP) of most countries," the INCB said in its 70-page annual report.

The spoils from the global drug trade are also endangering the economic, political, and social foundations of economically weak states and ultimately pose a real threat to democracy, the study notes.

"No country, rich or poor, large or small, equipped with sophisticated machinery to fight money-laundering or not, can consider itself safe from money-laundering activities," the report says.

Meanwhile, a proposal before ECOSOC calls for a Special Session of the U.N. General Assembly in 1998 to discuss the global drug problem.

While most developing countries at the ECOSOC meeting complained they did not possess the financial, material, and technical capacity to fight the sophisticated and high-tech methods deployed by the world's drug trade, Singapore said that because of its laws, the drug situation in the city state was under control.

"If we have been relatively successful in meeting this challenge, it is because of our tough laws and vigorous enforcement action against drug trafficking syndicates," Ambassador Bilhari Kausikan of Singapore told delegates.

In Singapore, the law provides for the death penalty for trafficking more than 15 grams of heroin. Addicts who are arrested may be detained for a period of six months to three years in rehabilitation centers run by the Police Department.

Comments? Send a letter to the editor.

Albion Monitor July 7, 1996 (

All Rights Reserved.

Contact for permission to reproduce.

Front Page