LONDON Ñ The International Monetary Fund has warned that offshore
financial institutions have not done enough to stop the flow of funds to
Islamic insurgency groups.
The IMF said in a report that offshore centers were not taking seriously
the prospect of insurgency financing. The report said the offshore
institutions were taking a more cautious approach to the prevention of
"Supervision and regulation of the non-banking sector in particular
needed to be strengthened in many offshore financial centers," the report
Several offshore financial centers have been wooing Saudi Arabia and
other Gulf Cooperation Council countries as a venue for holding assets of
prominent Arab princes, Middle East Newsline reported. Bahrain has also been touted as a leading offshore
Saudi Arabia has been searching for a venue to invest the nearly $100
billion withdrawn from the United States in the wake of the Al Qaida suicide
attacks on New York and Washington in 2001.
The IMF report sought to review 44 offshore centers as to their
compliance with international counter-insurgency regulations. So far, the
report said, a third of the institutions examined complied with basic
principles of international banking.