An historic moment in the development of a global community that investigates money laundering and suspicious financial transactions has been reached in Bermuda.

The Egmont Group, an informal international gathering of financial intelligence units, has come of age and become a fully-fledged formal body after an agreement was made on the Island by delegates from 92 countries and 12 international organisations.

Governor Sir John Vereker, opening the 15th Plenary Session of the Egmont Group at the Fairmont Hamilton Princess Hotel, said: "The work of the group is paramount in the continuing international effort to ensure that financial investigations are carried out effectively.

"It is not often that one can be sure of being present at a truly historic moment, but this really does seem to be such an occasion. After years of hard and effective work, and after the careful deliberations of the heads of financial investigation units here in Bermuda over the last few days, the Egmont Group is now about to embark on its new role as a fully-fledged international organisation with a permanent secretariat.

"No one could be prouder than we in Bermuda that this agreement is being reached here, and perhaps I will be permitted to say that I hope it will be called the Bermuda Charter."

Because of the nature of the work and the inherent threat of danger connected with rooting out big money criminal activity, members of the various financial investigation units from 104 countries and organisations such as the World Bank were given special security during their May 28-June 1 gathering.

Sir John said global capital markets and financial services had led to great prosperity for Bermuda and others, but it had also brought global threats from organised crime, money launderers, counterfeiters, drug smugglers and terrorists.

"Underlying many of these threats are financial transactions, and our collective capacity to identify and investigate such transactions is one of the main instruments we can deploy to keep our communities safe and to enable them to become prosperous," he said.

More than 100 countries, including Bermuda, have created national financial investigation units since 1990 to collect information on suspicious or unusual financial activity from the financial industry and other entities or professions required to report transactions suspicious of being money laundering.

In 1995 the Egmont Group was formed in Brussels and one of its most important achievements was to identify essential features needed to ensure that financial investigation units (FIUs) work as they are intended.

Outling the three basic features, Sir John said: "First, their staffing and resourcing must be adequate to the task. The FIUs or agencies established under the Egmont umbrella must have the capacity to receive, collate, analyse and disseminate information in a timely manner. They are entitled to expect the support of their financial communities but they must be able to display their muscle on occasion.

"Second, the institutions must be established in accordance with Egmont Group best practice, that is, on a statutory basis, with a ring fenced budget and independent of political control. This basic standard will ensure that they are operationally independent, within a framework of accountability that ensures there can be no interference in their role, whether directly or through budgetary pressure."

The Governor said the third requirement was for all the individual institutions to work collectively, and that sharing of information was something the Egmont Group helped to do.

"The principles set out in your meeting in The Hague in 2001 are standing the test of time very well. Two weeks ago, Bermuda hosted an equally successful Customs Law Enforcement Conference, and in that context too it was recognised that only a fully joined up response to cross border threats would be fully effective," he said.

"International standards are not set in concrete. They evolve with the evolution of the financial service industry, and with the evolution of threats to the stability and probity of that industry. I am pleased that the recent IMF financial sector mission to visit Bermuda, a few weeks ago, applied the latest methodology of the Financial Action Task Force. All of us, and all of our FIUs, now have to measure up to stricter standards."

Sir John said that, while he is responsible for matters effecting external affairs, internal security, and therefore international co-operation on investigations of suspicious financial transactions, he needed to work side-by-side with Government ministers to ensure necessary legislation is put in place to match the standards set by the International Monetary Fund, the OCED, the Financial Action Task Force, and the Financial Services Authority in London.

"I am happy to say that we are working closely together in this area, as in many others, to ensure that Bermuda will be able to take its place with confidence among the signatories to the Bermuda Charter," said Sir John.