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U.S. DEPARTMENT OF STATE
INTERNATIONAL NARCOTICS CONTROL STRATEGY REPORT MARCH 1996:
FINANCIAL CRIMES AND MONEY LAUNDERING
THE PRESIDENTIAL INITIATIVE
In a speech to the United Nations in October 22, 1995, President
Clinton announced a new US initiative against money laundering. The
President declared that those governments which were identified by the
US as being egregious centers for money laundering, and not taking
corrective action, could be subjected to sanctions. The initiative,
which is known by its authorization, Presidential Decision Directive 42,
or simply PDD 42, includes within its scope not only drug related but
other types of money laundering, and also financial crimes associated
with arms smuggling, nuclear proliferation, financing of terrorist
groups, organized crime activities, contraband smuggling, and violations
of UN/US sanctions.
As a follow up to the President's speech, the US government has
developed and is implementing the following two complementary analytical
processes: (1) the categorization of each country s money laundering
vulnerabilities (based on generally accepted standards of judging anti
money laundering laws, the adequacy and level of enforcement of these
laws, and the degree of international cooperation); and (2) an
assessment of the threat to US national security that the money
laundering poses related to certain key criminal activities, including
narcotics trafficking.
The process yields for the US a list of priority countries to approach
about specific shortcomings in their anti-money laundering laws and
enforcement efforts. The initial work with these countries will be
based on diplomatic negotiation. The President stated at the time of
his UN speech that failure to change one's status as an egregious money
laundering haven could result in the imposition of sanctions, up to
denial of access to the US banking system.
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