A two-day conference on money laundering and tax dodging starts today in the Cayman Islands.

The United Nations Offshore Forum is a move by the UN to mediate a growing controversy between wealthy countries alarmed by the proliferation of offshore businesses and other nations profiting from them.

It will bid to address claims by the United States and European countries that lax regulation in many nations is attracting money launderers and tax dodgers.

The meeting is being organised by the UN Office for Drug Control and Crime Prevention, and representatives from 19 countries and territories are expected to attend.

Representing Bermuda at the conference will be Government's assistant financial secretary for international business Ifor Hughes.

The conference follows a number of high-profile legal cases against offshore businesses, including the conviction of Texas banker John M. Mathewson last year on charges of helping US citizens evade taxes in the Cayman Islands.

Smaller countries and territories say they want to crack down on crime without hurting an industry that has brought wealth to resource-poor nations.

"In recent years the offshore concept has been seized upon by impoverished micro-economies as an assured means of wealth,'' the UN crime prevention office said in a written statement this week.

It said many countries are "unable to fund a programme of regulation strong enough to prevent criminal abuse of their sovereignty''.

Offshore centres in Africa, Asia, the Caribbean, Latin America and Europe held $4 trillion in assets in 1997, up $500 billion from 1992, the UN office said.

A 1998 report by the Organisation for Economic Cooperation and Development estimated $200 billion in businesses leave annually for offshore tax havens.

International experts have warned that banking secrecy laws in many countries have attracted money launderers.

Earlier this year, the Caribbean Financial Action Task Force estimated $60 billion is laundered in the Caribbean alone.

BUSINESS BUC