and territories from around the world were on hand for the opening session here of the United Nations (UN) Offshore Forum Plenary on Thursday morning.

The two-day confab was officially opened by the Governor of the Cayman Island, Peter Smith, who detailed Cayman's growth over the past 30 years to become "it is said, the world's fifth largest financial centre.'' The UN conference is hosted by the Government of the Cayman Islands.

Pino Arlacchi, Executive Director of the UN Office for Drug Control and Crime Prevention (ODCCP), addressed the opening session and told delegates that "the resolve of the international community to combine political will and concrete action was reaffirmed at the highest level by a special session of the General Assembly (of the UN) in June 1998''. Heads of State, Heads of Government and Ministers from around the world unanimously adopted a Political Declaration and Action Plan against Money Laundering. All states were given a target of the year 2003 for adopting adequate national legislation and programmes.

The UN Offshore Forum is intended to help states meet that target.

"International financial crime is not a new phenomenon,'' Mr. Arlacchi told the delegates. However, "we might usefully consider why it has become a matter of such urgency right now. The answer is essentially that of volume,'' he answered. "There can be several answers, but what is clear is that the number of cases and the amounts involved have gone beyond what the world community is prepared to tolerate,'' he said.

He noted a single case in Russia last year which involved as much as $10 to 12 billion US dollars, illegally obtained, then moved to a New York bank for laundering.

"Hardly a day now goes by without another case appearing in the press,'' Arlacchi told the audience. "Figures in the tens of millions of dollars are routine. And,'' he cautioned, "we are only hearing about those cases that are caught.'' The United Nations Under Secretary General then illustrated the point with some interesting numbers. "Let us take the figure of $10 to 12 billion from the Russian case and see how much it really is,'' he posited. "One comparison will tell us. The entire annual Gross Domestic Product of Jamaica was $9.5 billion in 1997. A single case of money laundering involved more than the GDP of Jamaica,'' he concluded.

The amounts of money involved have become so large that they are beginning to have devastation impact on the economies of whole countries, he said. He pointed out the case of Nigeria as being striking. "The new Government is untangling one by one the schemes and scams that bilked billions from that potentially rich country and brought its economy to its knees. Much of that money found its way abroad to banks that chose not to ask questions,'' he said.

However, pointed out Mr. Arlacchi, "the Forum is not intended to design new standards or to promote the abolishment of legal offshore banking. It emerges,'' he said, "from a perception that one side of the triangle has not yet been addressed to an adequate degree. The first side is the political commitment now broadly developing. The second is the set of regulatory frameworks now largely designed and available. The third side of the triangle,'' he emphasised, "is the application in all 55 offshore financial centres. This has not yet happened in far too many cases.'' Mr. Arlacchi explained the Cayman/UN Forum will aim to promote the political will and regulatory standards into day-to-day operations. The fact the United Nations is sponsoring the Forum gives it universality and neutrality, he averred.

Work will be carried out through the provision of advice and assistance to jurisdictions prepared to cooperate. "Events like this gathering should help convince all jurisdictions that it is no longer acceptable to aid and abet international organised crime,'' he continued. "They must be made to understand that it is also no longer in their interest.'' "Success is possible,'' Mr. Arlacchi promised. "It will require the same unanimity at the operational level that has already emerged at the political level. All offshore jurisdictions must ultimately apply the same standards,'' he concluded.

BUSINESS BUC