BRAZIL'S CARDOSO APPROVES MONEY LAUNDERING LAW

BRASILIA (Reuters) - President Fernando Henrique Cardoso on Tuesday signed
into law a bill criminalizing money laundering, in an attempt to end
Brazil's reputation as a clearing house for the proceeds of organized crime.

The bill, approved by the Senate last month, provides for prison terms of
three to 10 years for the crime.

The United States had long urged Brazil to introduce laws fighting money
laundering.

Brazil's location close to cocaine-producing countries and its strict bank
secrecy laws are believed to have attracted drug gangs, gun-runners,
smugglers and corrupt officials seeking to disguise their cash.

``We think it's a very positive development and that it will be important
too to fight drug trafficking,'' said a spokeswoman for the U.S. Embassy in
Brasilia.

Before the law was introduced, it was virtually impossible to prosecute
banks and financial institutions suspected of handling hot money.

A probe by Brazil's Senate last year into municipal debt fraud found
evidence of $1 billion in illegal trades carried out by banks and
brokerages. No one was charged because there was no adequate legislation.