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2004-08-19 16:07:41

Chinese Officials Reportedly Hid Money In Bahamas

The report says that Chinese companies and individuals have registered tens of thousands of firms in such offshore financial centres as the Bahamas.

A newly released report in China has raised concerns over the use of The Bahamas to launder money. The report coincidentally comes as Prime Minister Perry Christie and Chinese officials work to strengthen bilateral relations.

Researchers in the Chinese Ministry of Commerce estimate that about 4,000 corrupt officials who have fled China in the past two decades transferred US$50 billion out of the country, according to the Shenzhen Daily, a Chinese newspaper.

Dr. Mei Xinyu from the Institute of the Ministry of Commerce, lead writer of the report, has reportedly said that corrupt officials and some private firms were using companies registered in offshore financial centres, such as the Bahamas and the British Virgin Islands, to transfer capital and illicit gains out of China illegally.

The report says that Chinese companies and individuals have registered tens of thousands of firms in such offshore financial centres as the Bahamas.

China reportedly has the world's fourth most serious problem with capital flight, and the annual figure has been rising at half the speed of its foreign debt growth since 1985, the Shenzhen Daily reported.

Mei also reported that Chinese authorities are planning to set up a joint task force to deal with these matters, the paper said.

The researcher in June reportedly expressed concern at the number of Chinese companies that are choosing to register in offshore centres.

Mei is concerned that Chinese state officials could be using such jurisdictions to illegally dispose of state assets, according to Tax-News.com, Hong Kong.

This is precisely the kind of activity the Bahamas government has said it is seeking to discourage.

In fact, in 2000, parliament passed a package of financial services legislation that put in place tighter controls and requires financial institutions to know the customers they are dealing with.

This action was prompted by the blacklisting of the Bahamas by the Organization for Economic Cooperation and Development and the Financial Action Task Force.

But the Bahamas continues to be linked to shady dealings of the nature that is raising concerns among Chinese officials.

Only recently, the Bahama Journal reported that media establishments around the world in recent times have been carrying these reports, which threaten to tarnish the Bahamas' reputation as a jurisdiction with zero-tolerance for money laundering.

The Bahama Journal

 
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