-Caveat Lector- from: http://www.zolatimes.com/V5.21/tyranny_laundering.html Click Here: <A HREF="http://www.zolatimes.com/V5.21/tyranny_laundering.html";> Tyranny Laundering, by Pierre Lemieux</A> ----- Tyranny Laundering Why Big Brother Attacks "Money Laundering" by Pierre Lemieux Crime is criminal, but why make a second crime of "the processing of criminal proceeds in order to disguise their illegal origin," i.e., so-called "money laundering" (the definition is from the Financial Action Task Force on Money Laundering, The Forty Recommendations, at www.oecd.org//fatf/pdf/40Rec_en.pdf )? And what counts as "crime"? Under the excuse of fighting "organized crime," the U.S. government was the first one to criminalize money laundering. Under the Money Laundering Control Act of 1986, explains Bob Bauman, a lawyer and the editor of the Sovereign Society's A-Letter, Currency Transaction Reports (CRTs, on Internal Revenue Service Form 4789) must be filed for all cash transactions of $10,000 or more, or by any individual buying more than $3,000 in money orders. Failure to file Form 4789 is a felony. "Any person or organization that attempts to circumvent these regulations by completing a series of smaller transactions that in total exceeds the given limit is guilty of a crime known as 'structuring'," adds Mr. Bauman. U.S. customs laws also require the reporting of any sum of $10,000 or more in cash or equivalent negotiable instruments being transported into, or out of, the country. Moreover, American banks – and soon other financial intermediaries – have to file a Suspicious Activities Report (SAR) if a customer's transactions look suspicious, whatever that means. The International Monetary Fund estimates money laundering at 2 percent to 5 percent of world gross domestic product. Although money laundering also relates to such crimes as embezzlement and fraud, it is mostly associated with the drug trade, arm sales, smuggling, and prostitution. Thus, most laundered money has been earned in committing "victimless crimes," i.e., in peaceful activities that have been forbidden by the state. The cost of the money laundering legislation is higher than whatever benefits some might think of. Writes Richard Rahn: "[I]f you look at the results of this so-called war on money laundering, you find that it has failed to produce the advertised results and, in fact, has not been cost effective, has resulted in wholesale violations of individual civil liberties." Between 1987 and 1995, 77 million CTRs were collected, which lead to 580 convictions for money laundering, i.e., less than one conviction for every 100,000 reports filled ("Why the War on Money Laundering is Counterproductive," at www.freedomandprosperity.org/Papers/rahn01-30-01/rahn01-30-01.shtml). International state cartels have been active co-conspirators in the strengthening of surveillance and control of financial transactions. The 1989 G-7 Summit established the Financial Action Task Force on Money Laundering (FATF) with the objective of coordinating the international hunt on the money launderers. Although not formally part of the Organization for Economic Cooperation and Development (OECD), FATF is lodged in the Organization's Paris headquarters. FATF designed 40 recommendations which include proposals to "criminalize money laundering as set forth in the [1988] Vienna Convention," and to extend it to other "serious offenses" besides drugs. FATF lists bribery and insider trading among these other so-called crimes ("Money Laundering," at www.oecd.org/fatf/pdf/PB9906_en.pdf). The definition of money laundering is not closed, as explained in the Forty Recommendations: "Each country would determine which serious crimes would be designated as money laundering predicate offences." For example, the state of Singapore, a member of FATF and one of the most repressive regimes in the world, could decide that the proceeds of anti-government writings fall under its definition of money laundering. Once you get a tyrannical idea going in international government circles, it is rapidly picked up by different state cartels. The first Summit of the Americas, held in Miami in 1994, officially aimed at creating a Free Trade Area of the Americas (FTAA), but the "Plan of Action" it designed included many other state agendas. "Governments," states the document, "will [e]nact legislation to permit the freezing and forfeiture of the proceeds of money laundering and consider the sharing of forfeited assets among government," and "[e]ncourage financial institutions to report large and suspicious tran sactions to appropriate authorities and develop effective procedures that would allow the collection of relevant information from financial institutions." The Organization for Economic Cooperation and Development (OECD), a club of rich-country governments, used to be a friendly, innocuous research organization which provided useful data to economists. During the 80s and 90s, its research had a favorable impact on mild libertarian causes like challenging state growth and promoting free trade. It has now become a despicable cartel intent on monitoring financial transactions for reasons of state. Tax Havens What if countries at the periphery become "tax havens" where money can flow without much taxes, administrative burdens, or surveillance? What if some states, in non-tax-haven countries, impose lower taxes or protect financial privacy? The international state establishment was not long to discover that there was a way to both fight money laundering and simultaneously increase their hold on their taxpayers. Isn't tax evasion a crime, anyway? An 1996 OECD meeting thus launched a campaign against "harmful tax competition." An official report was published, and approved, in 1998, under the title of Harmful Tax Competition: An Emerging Global Issue (available at www.oecd.org/daf/fa/harm_tax/harmfultax_eng.pdf). Any country that does not have an income tax is ipso facto considered as a dangerous tax haven. Protection of privacy is another criteria for blacklisting: "Beyond no or only nominal taxation," the report states, "other key factors in identifying a tax haven are the lack of transparency in the operation of the jurisdiction's administrative tax practices and the existence of provisions – whether legislative, legal, or administrative – that prevent (or would prevent) effective exchange of information." Observe how money laundering and tax evasion are united in justifying the repression of privacy: "Because non-transparent administrative practices as well as an inability or unwillingness to provide information not only allow investors to avoid their taxes but also facilitate illegal activities, such as tax evasion and money laundering, these factors are particularly troublesome." The authors hit again the two-face enemy: "The most obvious consequence of the failure to provide information is that it facilitates tax evasion and money laundering." The OECD is after not only 35 "tax havens" like Monaco, Liechtenstein, or the Channel Islands, but also "harmful preferential tax regimes that drive the effective tax rate levied on income from the mobile activities significantly below rates in other countries." They call this "poaching other countries' tax bases," as if taxpayers were state property. In refusing to approve the report, the Luxembourg government declared that it "gives the impression that its purpose is not so much to counter harmful tax competition where it exists as to abolish bank secrecy." The Swiss government also dissented, explaining that "a certain degree of competition in tax matters … discourages governments from adopting confiscatory regimes, and it avoids alignment of tax burdens at the highest level." One should remember that Swiss bank secrecy was convenient when German Jews wanted to hide their money from the Nazi tyrant. Or course, New Age Newspeak makes the renewed possibility of such tyranny literally unthinkable. The economic argument is the same in favor of both tax competition and tax evasion. These two methods of escape provide a built-in restraint against tax exploitation by the state. Tax havens and "harmful tax regimes" don't protect only the rich who take advantage of them, but all other taxpayers who would be more exploited if nobody could escape the golden jail. The OECD has proposed a host of measures for more consistent and invasive surveillance and control by its member states against their own taxpayers, while bullying governments presiding over "tax havens" or "harmful tax regimes." Sanctions threatened against renegade countries go from refusing to sign tax treaties to imposing protectionist taxes on transactions with their residents. Resistance has organized under the Center for Freedom and Prosperity ( www.freedomandprosperity.org/), other private organizations like the Sovereign Society (www.sovereignsociety.com/), and U.S. Congressional Representative Dick Armey. Last week, a U.S. Treasury official declared that, although more international tax information is needed ("We cannot tolerate those who cheat on their U.S. taxes by hiding behind a cloak of secrecy"), "[i]n its current form, the [OECD] project is too broad and it is not in line with this administration's tax and economic priorities" (Washington Times, May 10, 2001, at www.washtimes.com/commentary/20010510-3235964.htm). This will certainly slow down the OECD momentum. But never underestimate tyrants. The concerted effort of the most powerful states in the world to fight victimless crimes and crimes against the state, like tax evasion, is nothing but an effort to hide an increase in their taxing and surveillance powers. It is nothing but tyranny laundering. ------------------------------------------------------------------------ Pierre Lemieux is an economist at the Universit? du Qu?bec ˆ Hull. E-mail: [EMAIL PROTECTED] -30- from The Laissez Faire City Times, Vol 5, No 21, May 21, 2001 ------------------------------------------------------------------------ Click Image to Jump to Next Article Back to Home Page Quick Menu ------------------------------------------------------------------------ Interactive Forum Tyranny Laundering E-mail the Editor For a Free e-mail Subscription Click the City Times Image ----- Aloha, He'Ping, Om, Shalom, Salaam. Em Hotep, Peace Be, Omnia Bona Bonis, All My Relations. Adieu, Adios, Aloha. Amen. Roads End <A HREF="http://www.ctrl.org/";>www.ctrl.org</A> DECLARATION & DISCLAIMER =========CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are unwelcomed. Substance—not soap-boxing—please! 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