HomeMy WebLinkAboutThe Citizen, 1988-11-02, Page 4PAGE 4. THE CITIZEN, WEDNESDAY, NOVEMBER 2, 198«.
Opinion
Give us reason
to cairn our passion
Halloween mysteries
J!I The International
Scene
Proponents of the Free Trade Agreement are greatly aggitated
these days over what they consider distortions in the understanding
of the agreement. They deplore the passion that is creeping into the
debate from nationalists and call for more logic and reason. Perhaps
they can apply some reason in answering the questions that are
troubling the doubters who refuse to take the “leep of faith” former
Liberal treasurer Donald MacDonald called for in supporting the
agreement.
Logic, for the doubters, says that the famous “level playing field”
isn’t too level if Canada maintains minimum wage laws while areas of
the U.S. don’t have such laws or have ridiculously low minimums. To
the logic of the doubters, it seems that if a company can locate in a
low-wage area of the U.S. and save on wages and be closer to many
large population areas of the U.S. as well, why would they locate in
Canadawhere they will have higher shipping costs and higher
wages? If, moreover, they can locate parts manufacturing across the
border in Mexico, bring the parts into the U.S. where they are
assembled into products that then bear the “Made in U.S.A.” label
and can send the product duty-free to Canada, why wouldn’t the
plants be moved even further south to Mexico as Fleck
Manufacturing has done?
Supporters of Free Trade say it will have no effect on
environmental concerns in Canada. The logic of the nonbeliever,
however, wonders how Canadian industries can compete with U.S.
industries ifwe expect our industries to spend more money on
environmental protection than U.S. firms do. The U.S. Republican
government has shown little interest in cleaning up the environment
while environmental cleanup is high among the concerns of ordinary
Canadians. If a Canadian government wants to brin-g about higher
standards in Canada, how long will many companies remain here
when they can save money by locating in the U.S. and avoiding the
tougher controls?
Supporters of the Free Trade agreement make a point of saying
supply-managed marketing boards are protected under the
agreement. While even most critics agree that marketing boards are
protected, in many areas importation of finished product will be
allowed. The logic of the non-believer (including many food
processors) says that if Canadian manufacturers have to compete
with imported U.S. food where U.S. processors have cheaper farm
prices, and Canadian companies have to manufacture goods at the
prices marketing boards charge Canadian processors can do one of
three things: they can go broke, they can move to the U.S. or they can
demand marketing boards be abandoned. In any of the three
alternatives farmers in supply-managed commodities seem to have
trouble. If the manufacturers close or go south, the farmers have no
one to sell to and the marketing boards are dead anyway.
The key to many areas of the deal will be the definition of what is a
subsidy and the co-ordination of technical standards between the two
countries that will be negotiated over the next few years. The logic of
the non believer says that when a huge country with a huge industrial
complex (not to mention a huge military complex) is negotiating
common standards with a country one tenth the size, the standards
likely to be agreed upon are those of the bigger country, even if those
standards are not as good as the standards of the smaller country.
Logic says that the definition of a subsidy is more likely to be the
definition favoured by the huge nation rather than the small one.
If the supporters of Free Trade instead of spouting platitudes about
our country being strong enough to stand up without the protection of
tariffs, instead of accusing all the non-believers of being fear
mongers could take the time to put their reason to work explaining
away these concerns they might do something to calm the
nervousness of Canadians which has seen support for the agreement
plummet in recent weeks.
The art of
laundering
money
BY RAYMOND CANON
I think that most of us have heard
of dirty money; this, in effect, refers
to the money which has been earned
illegally, i.e. through the sale of such
things as cocaine, marijuana, and
the like. Since it has been earned in
an unacceptable way, it cannot be
deposited in the banks in the same
way that you and I would deposit our
earnings and, for this reason, some
effective way has to be found for it to
be put into the banking system.
First of all, just how much money
are we talking about? While there is
obviously no precise way of calculat
ing such a figure, it is estimated that
in the United States, the amount
ranges in the vicinity of $10 billion;
world-wide the figure may be as high
as $30 billion.
Whatever the amount the manner
in which it is deposited or laundered
is pretty well the same. One simply
puts the money in small amounts
(from half a million to one million) in
a suitcase and sets out for Switzer
land. It is put in an anonymous,
numbered Swiss bank account and
subsequently invested for the bene
fit of the criminal. In order to keep
the trail as confusing as possible, it is
advisable to switch the money from
one bank account to another. To be
doubly sure, the switching should be
alternated by converting it into cash
from time to time.
Well, you will say; the best way to
control this illegal flow is either to
mount a careful guard at border
crossing points or to maintain a strict
surveillance of cash deposits. Now
andagaintheformerproves tobe
effective; a recent check by Belgian
customs officials resulted in over $1
million being found in a car, money
that had been stolen from a Brink’s
truck. However, as anybody who has
gone through airport customs can
testify, there are extremely few
suitcases that get opened.
As for checking cash at the banks,
police forces are of the opinion that
the most difficult thing in the job of
tracking down laundered money are
the unco-operative bank managers.
Since the rules vary from country to
country, it is difficult to get any
consistency. To cite one example,
the police in Great Britain are unable
to gain access to any suspicious bank
account unless they have firm
evidence that something wrong has
been done.
One way of getting around all of
this is for the money launderers to
own an international trading com
pany whose transactions go in all
directions. The company can make a
deposit in a foreign bank and have
documented proof that the deposit
was in payment for some shipment.
Who is to say that the proof is not as
advertised. Furthermore, the de
posit may be made in a bank in some
such place as Uruguay or Hong Kong
where nobody bothers too much
about the origin of the money. A few
banks later the same money may end
up in a more reputable location such
as Switzerland or Holland.
Another way is for a piece of
property owned by a suspected
criminal to be sold to a mysterious
foreign company. The latter usually
ends up paying about 10 times the
market value of the property. In one
of the recent cases which came to
light, the person who owned the
property also owned the foreign
company; in short, the money
actually went from one pocket to
another.
The world’s biggest customers for
money-laundering services are the
South Americans and they will take
advantage of any mechanism to get
their money to the safest of places.
Given that the customers are
frequently up among the high and
mighty (witness Panama’s General
Noriega), they can frequently use
official channels in order to accom
plish their goal. Noriega, by the way,
was caught not by his efforts to
launder his money but simply
because he was fingered by an
informer. In many casesit is such
informers who provide the best
means of cracking a case.
The Americans have one of the
best systems for preventing money
from finding its way into the banking
system but, until all countries whose
banks receive such money are able to
rival the Americans in tracking such
deposits, I am afraid that not much of
a dent is going to be made in that $30
billion.
The
Citizen
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