APEC ministers unveil plan to cut off terror funds

Finance ministers from around the world unveiled a plan to cut off funds to extremists, pledging to boost efforts to investigate money launderers and the financing of terror.

The ministers of the Asia-Pacific Economic Cooperation forum also said the global economic recovery was under way, but acknowledged that doubts about the strength and speed of the recovery remained.

"It is the view of the finance ministers that we should pursue and continue the prosecution of the financial war on terrorism," US Treasury Secretary Paul O'Neill told a news conference after a joint ministerial statement was released in this plush seaside resort.

The drive to crack down on terror financing is directly aimed at al Qaeda, the organisation of Saudi-born militant Osama bin Laden that Washington blames for the September 11 attacks on the United States that killed about 3,000 people. The United States has moved to cut al Qaeda's funding sources.

Finance ministers, who were joined by Mexican President Vicente Fox, hammered out the plan in a second day behind closed doors and under heavy guard.

The ministers did not disclose many details of the plan but said it included clamping down on the hawala money-exchange system used widely in the Middle East and elsewhere for transferring funds in a hard-to-trace way. The proposals will be ready for political leaders, including US President George W. Bush, to endorse at a summit in Los Cabos late next month.

"We have agreed to put forward to the leaders who meet here next month a second phase agenda which will include going after hawalas and other money-change sectors," O'Neill said.

O'Neill said as many as 9,500 people had been arrested globally since last September on suspicion of activities supporting terror and he hinted more were coming.

"It's an important fact that lots of people have been identified and action taken and that process goes on," O'Neill said. "You will see more of it in coming weeks."

After the September 11 attacks, the United States and other nations froze more than $112 million in assets Washington said were tied to funding terrorism worldwide. But in the past eight months, only $10 million in additional funds had been blocked, according to a UN report critical of the effort.

Some of the money has been linked to charitable and nongovernmental organisations, a fact recognised by the APEC ministers.

"We note the importance of preventing terrorists from misusing alternative remittance systems and non-profit organisations, including charities, as a source of or mechanism to move funds," the joint ministerial statement said.

The two-day finance ministers' meeting was dominated by the discussion about curbing terror finances, although concerns about the global economic expansion came up.

"We recognise that the majority of the indicators suggest that the global economic recovery is underway," the statement said. "Nevertheless, uncertainties regarding the strength and pace of the expansion remain."

"Although, most APEC economies are enjoying stronger economic performance, some still face structural, fiscal and financial challenges," the plan added, without identifying any specific nations.

The APEC quest to deal a blow to money laundering was questioned, given that three members of the group - Russia, the Philippines and Indonesia - are all on a blacklist from the G-7 sponsored and Paris-based Financial Action Task Force for being laggards in stopping money laundering.

Mexican Finance Minister Francisco Gil said the apparent contradiction did not mean there was no will to fight money laundering.

"I think there is money laundering going on everywhere, in every single country. Our goal is to find where it is occurring and combat it," Gil said.

APEC comprises Australia, Brunei, Canada, Chile, China, Hong Kong, Indonesia, Japan, South Korea, Malaysia, Mexico, New Zealand, Papua New Guinea, Peru, the Philippines, Russia, Singapore, Taiwan, Thailand, the United States and Vietnam.