FROM THE OFFICE OF PUBLIC AFFAIRS

The Treasury Department on Wednesday advised U.S. banks and other financial institutions to give enhanced scrutiny to all financial transactions routed into or out of Antigua and Barbuda.

The advisory, issued by Treasury's Financial Crimes Enforcement Network, stems from heightened concerns over recent actions by the government of Antigua and Barbuda that significantly weaken its anti-money laundering laws and supervision of its offshore banks. U.S. regulators and enforcement officials, concerned for some time with the operation of Antigua and Barbuda's offshore financial sector, believe these changes further erode supervision, stiffen bank secrecy and weaken international law enforcement and judicial cooperation.

"We believe that recent actions taken by Antigua and Barbuda will undermine U.S. efforts to crack down on international money laundering through its offshore accounts," said Under Secretary for Enforcement James E. Johnson. "It is important for U.S. financial institutions to give enhanced scrutiny to all transactions into or out of Antigua and Barbuda to guard against the laundering of criminal proceeds."

In November 1998, the government of Antigua and Barbuda amended its Money Laundering (Prevention) Act in a manner that significantly weakened that Act. The amendments had the effect of strengthening bank secrecy, inhibiting the scope of investigations and infringing on international cooperation. In addition, the government changed the supervision of its offshore financial services sector by vesting authority in a new International Financial Sector Authority, whose board includes representatives from the offshore banks the Authority is supposed to regulate. This violates the "Basle Principles," the generally accepted international principles for bank supervision.

The Treasury advisory is available through the Internet at www.treas.gov/press.