ST. JOHN'S, Antigua (AP) -- The government has launched a complete overhaul of offshore banking regulations to try to erase the island nation's image as an easy place to launder money.

In a four-page letter delivered by hand this week to each of the island's 51 licenced offshore banks, Wrenford Ferrance, director of the International Business Corporations office, instructed bank officers to submit detailed information about their operations.

By September 29, each offshore bank must provide to the government a complete disclosure of its ownership, branch offices, auditing procedures, corresponding banks, insurance coverage, advertising, use of the World Wide Web and internal policies to prevent money-laundering.

Banks must also disclose the professional background of every officer, director and any person who holds more than a five percent interest in the bank.

To make sure the banks comply, two task forces have been established, including computer experts, lawyers, and former agents of the US Federal Bureau of Investigation and Drug Enforcement Administration, Ferrance said.

These experts will train Antiguan regulators, who will take over the job.

While the offshore banking industry in this former British colony of Antigua is much smaller than in the Bahamas, Bermuda, the Cayman Islands and other Caribbean islands, it has drawn special criticism from the United States and Britain, among other nations, which said that lax laws allowed organised crime to launder their proceeds.

"The government realises we have problems and we are taking all the steps necessary to correct those problems immediately,'' Ferrance said.

"We intend to weed out every undesirable offshore bank in the country and to develop an offshore industry that we can then advertise to the world as the best on earth, bar none.'' The collapse two weeks ago of the European Union Bank, which had billed itself as the first offshore bank on the Internet, added to the bad press for the country. The two Russian-born principals of the bank were being sought by authorities.

Ferrance said the key to preventing money-laundering will be a "know your customer'' policy by the banks that is backed up by a computer system that will track the activities of the offshore operations. Banks must determine the true identity of their clients and the source of their money without compromising secrecy, Ferrance said.

Ferrance predicted some of the offshore operations would close because of the regulations.

"We will establish regular and routine inspection of the surviving banks to make absolutely certain they are cooperating.''