11th September and revelations from the Enron collapse add to the mounting pressure on offshore financial centres

Offshore financial centres (OFCs) have again come under the spotlight. They have been accused of aiding terrorists by laundering their financial resources, allowing the funding of terrorism to go undetected. Their role as tax havens have also been highlighted in the collapse of Enron, a company that used OFCs to avoid paying millions of dollars in US tax. In response many OFCs have agreed to freeze terrorists’ assets, tighten money laundering legislation, provide a more open tax system and share information. There are, however, some OFCs that are resisting the mounting pressure to conform to international standards. These will become targets once more in June, 2002, when the Financial Action Task Force starts the process of identifying jurisdictions that ‘lack appropriate measures to combat terrorist financing’.