U.S. TARGETS MONEY-LAUNDERING ZONES

The Clinton administration, seeking to crack down on money laundering, is
designating Los Angeles, New York and northern New Jersey, San Juan, Puerto
Rico, and the Southwest border as high-intensity zones for increased
law-enforcement activities.

Teams of federal, state and local law enforcement officers will be formed
in those high-risk money laundering and financial crime areas designated by
the Treasury Department.

The administration, seeking to stem the flow through U.S. banks of billions
of dollars from drug trafficking and other illegal activities, also is
seeking new powers from Congress.

A legislative proposal outlined last week by Treasury Secretary Lawrence H.
Summers would give the government the authority to ban financial
transactions between offshore financial havens and U.S. banks and brokerage
firms. Storefront check cashers, brokerage firms and casinos would be
required to notify authorities of suspicious transactions, as banks now
must do.

Money laundering is estimated to absorb up to 5 percent of the world's
gross domestic product. Profits from drug trafficking, prostitution and
other criminal activities are moved through a series of bank or brokerage
accounts to make them appear to be legitimate business proceeds.

Treasury is seeking the power to ask U.S. financial institutions to collect
data on all kinds of transactions with an offshore bank or financial
company. In cases where foreign governments shield banks from
investigation, Treasury wants the authority to cut them off from the U.S.
financial system without seeking congressional approval.