CRIME A GROWTH INDUSTRY ON NET, MINISTER WARNS

Rapid growth of the Internet and e-commerce provided criminals with new
opportunities to launder dirty money, Justice and Customs Minister Amanda
Vanstone warned yesterday.

"Cybercrime goes way beyond e-commerce," she told the third annual meeting
of the Asia/Pacific Group on Money Laundering.

"The big-time criminals don't carry the drugs or kill the victims - they pay
others to do their dirty work, but they do sit very close to the cash."

The best way to deal with criminals was to follow the money trail left by
the proceeds of their crimes, she said.

The Internet made following the money trail more complex and thus more
difficult and expensive for law enforcement.

"The Internet enables illicit funds to be transferred around the world at
the touch of a button, virtually without trace and without the criminal
having to put in a personal appearance," she said.

"It makes life easier for drug traffickers, under-the-counter arms dealers
and other criminals."

As financial systems become more electronically accessible, their
vulnerability to money laundering increased.

The International Monetary Fund estimated that $US600 billion ($A1.05
trillion) was laundered annually from the proceeds of illegal
drug-trafficking alone, she said.

Senator Vanstone defended the Federal Government's 12-month ban on Internet
gambling: it took time, she said, to plug the electronic loopholes that
criminals could exploit.

She warned the 17 members from South Pacific nations that allowing money
laundering invited international criminals to corrupt financial and
government systems.

Countries that allowed money laundering also could find themselves
economically and politically isolated.

"We need to remember that money laundered by organised crime represents the
fruits of drug trafficking, arms dealing, prostitution, trade in human
beings, kidnapping and extortion," Senator Vanstone said.

"Tolerating these tainted funds means tolerating the human misery that
generated them in the first instance."

Large inflows and outflows of illicit funds could seriously destabilise
smaller financial systems and open their economies to attacks by organised
crime.

She told reporters that laundered money added nothing to a nation's GDP.

"In fact (it) invites corruption of law enforcement agencies and of
governments and consequently can produce instability."

She warned that small nations were most at risk, but stressed there had been
a "great cooperative effort in (the) Pacific to resist the crime".

Australia had strong anti-laundering legislation and financial tracking
capacity, but it was critical to remain vigilant because the criminals paid
for the best legal, accounting and technological advice.