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KOROR, Palau (March 27, 2001 - Palau Horizon/PINA Nius Online)---Following a U.S. Department of State favorable report, Palau has regained the confidence of the international banking community two years after being implicated as a money laundering haven.

The State Department, in its Year 2000 International Narcotics Control Strategy Report, praises the Palau government, now headed by President Tommy Remengesau, Jr. for drafting anti-money laundering initiatives.

The report reviews current efforts of the worldwide campaign to combat drug trafficking and money laundering.

"Palau is not a major financial center. However, reports that offshore banks in Palau have carried out large-scale money laundering activities prompted a few international banks to ban financial transactions with Palau in late 1999 and early 2000," the report said.

The report added: "In response, Palau established a banking commission that intends to introduce financial control legislation. . . in early 2001."

Palau was praised for seeking assistance to develop anti-money laundering legislation.

The U.S. also commended Palau for participating in international meetings and conferences on financial crime in 2000.

The State Department's report added that Palau took a big step when it became a signatory to the Pacific Island Forum's anti-money laundering initiatives.

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