Exempted companies and insurance companies incorporated in Bermuda can provide a window of opportunity to crooks trying to launder money, according to the acting Director of Public Prosecutions, Kulandra Ratneser.

And he warned that if professionals hid behind confidentiality laws they would "emasculate" the law enforcement agency - and his department will leave no stone unturned to prosecute and punish offenders.

The head of the Crown's prosecution service said that accountants, financial advisors and brokers had a social responsibility and a legal duty to report on any suspicious clients - with criminals both from at home and abroad trying to get dirty money through the system.

Speaking to accountants and lawyers at the Second Annual Anti-Money Laundering Conference, he said: "Without your vigilance and co-operation, enforcing the Proceeds of Crime Legislation will be a futile exercise."

Mr. Ratneser said that as regulators in Bermuda, they had to be careful not only about dirty money generated by drug trafficking, but of the use of Bermuda's institutions by those generating dirty money overseas.

"I am referring to the use of exempt companies and insurance laws.

"The facility that Bermuda provides of having companies incorporated in Bermuda with the capacity, capability and legality of conducting business overseas certainly offers a window of opportunity for those who wish to launder money through these companies, particularly those companies that are incorporated for single transactions.

"Companies that have a very short life."

He said that regulators had to be pro-active in their approach to stop criminals in their tracks. Mr. Ratneser said: "Lawyers and accountants today in Bermuda play an essential role in the incorporation of companies, the preparation of business plans and making recommendations to regulatory authorities.

"It is well-known that in most banking and non-banking commercial activity, money launderers use the services of law firms and accountants who inadvertently and more often unknowingly assist in the process of money laundering."

And while a regulatory framework could be put in place he said the onus was on companies that were used to clean the dirty money to stop the money laundering as they alone had the evidence to stop and convict criminals.

He added: "For these reasons, lawyers in private practice, accountants in accounting firms, financial advisers, brokers and the like, in fact all persons involved in large money transactions have a social responsibility and a legal duty to be vigilant in their dealings with persons who are anxious to penetrate the white economy for their own ends."

Mr. Ratneser said: "We on the other hand as a law enforcement agency will be sterile and emasculated in the performance of our function as prosecutors, if professionals hide behind legal privilege, client privilege and the like to frustrate our attempts to successfully prosecute and punish criminals who by money laundering hold our social and economic structure at the crossroads to a successful future."

Mr. Ratneser warned that fear of reprisals - the cause of many prosecutions being lost on the Island - must not spread to professionals in Bermuda, or it will make enforcing the law on anti-money laundering extremely difficult.

"As we know money cannot be moved without the intervention of banks, lawyers, accountants, financial advisors and all those financial entities that deal with money," Mr. Ratneser told the conference during a lunchtime speech on Wednesday.

"Whether it is done knowingly or innocently these persons become the tools by which money is laundered. It is in these people's hands that lie the evidence that will ultimately lead to the successful enforcement of any money laundering legislation. Will they cooperate? Will they be prepared to stand up to the threats from organised criminals? Will they be prepared to place their professionalism at stake and be counted? Or will they surrender their responsibility to society and the general well-being of the community as a whole?"

He quoted Justice Howe, of the Supreme Court in the US, stating that as long as there is the human brain, man will find ways for dishonestly using other people's money for his own benefit, i.e. fraud. And he said that money laundering was just an extension of man's ingenuity to disguise the source of funds obtained from criminal conduct. "It is now such a large problem that it has become a threat to our civilised way of life," he added. "We are now dealing with organised crimes committed by organised criminals who use not only their human ingenuity to find newer and better ways of cleansing black money, but they will also find newer and better ways of hiding evidence that will disclose the methods used in laundering money."

Mr. Ratneser said that in his short stay in Bermuda he had come across two attempts to use Bermuda to launder money.

One of these, he explained, happened two years ago, when he was working in private practice when he was asked to set up a Class 3 insurance company. But it turned out that one of the men, who was purporting to be from a wealthy Greek family, was in fact a crook as was his partner. Both had been convicted of fraud in the UK.

Mr. Ratneser said: "Had it not been for the vigilance of the BMA, these crooks would have slipped through the system and brought disgrace to Bermuda."