ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Monday, January 1, 1996 TAG: 9601020176
SECTION: NATIONAL/INTERNATIONAL PAGE: A-4 EDITION: HOLIDAY
DATELINE: WASHINGTON
SOURCE: The Washington Post
The list of countries that give the United States serious grief doesn't usually include Seychelles, a tiny nation of 73,000 people scattered on remote islands in the Indian Ocean.
But the government there got Washington's attention big time in December by enacting a new investment law that officials here describe as a ``Welcome, Criminals'' act.
The law says that anyone who invests $10 million or more in Seychelles - no questions asked as to the source - is entitled to protection from extradition and from seizure of assets and to any other ``concessions and incentives ... commensurate with the investment.''
U.S. officials said they regard this as an open invitation to money launderers and other international criminals to set up shop with impunity. Under the statute, they said, the Seychelles government could grant diplomatic passports and other protections to such people, shielding them from international law-enforcement agencies.
``This is a law that would have made Meyer Lansky proud,'' said Jonathan M. Winer, deputy assistant secretary of state in the Bureau of International Narcotics and Crime, referring to the gangster's claim to have ``bought Cuba'' as a refuge.
``We do have concerns about the law. The results are potentially problematic,'' another State Department official said. ``No one has yet benefitted from the status granted in the law. We will watch very closely to see if people do, and what type of people. We have been assured that it is not a secret process for shady people to come in there in the dark of night.''
One U.S. official, citing intelligence reports, said the first potential beneficiary is a white South African ``who made his fortune as a sanctions-buster'' in the days of international economic sanctions against the apartheid regime there and ``is no longer under the protection of the [South African] government.''
Officials said the United States, Britain and France have made strong protests to France-Albert Rene, president of Seychelles since 1977, who under the law would run an economic development board responsible for approving proposed investment projects and negotiating the concessions to be granted to the investors.
In response, the Seychelles foreign ministry distributed a memo defending the act. According to this document, made available by Seychelles Ambassador to the United States Marc Marengo, the investment law ``does NOT provide a haven for criminals in Seychelles nor a haven for fugitives from justice from anywhere in the world.''
The economic development board to be headed by Rene ``will screen any potential investor prior to any incentives or concessions granted to him/her. This will eliminate the possibility'' that Seychelles would become ``a haven for criminals,'' the memo says.
But U.S. officials said that whatever Rene's intentions, the act as adopted gives the appearance of offering shelter to unsavory characters. It offers ``immunity from prosecution for all criminal proceedings whatsoever'' except those committed in Seychelles.
The Seychelles diplomatic memo said this provision would not conflict with the country's obligations under extradition treaties, but U.S. officials say it would. ``Domestic law always overrides extradition agreements,'' one said.
Tourism is the mainstay of the economy in Seychelles, a 90-island archipelago. The tourism business fell off sharply during the Persian Gulf War five years ago, and the government has been seeking to diversify the economy and entice foreign investment. The new investment law is billed as a legitimate tool of that endeavor.
According to the law, projects that ``will procure a high level of sustainable economic development for Seychelles'' will be welcomed.
U.S. officials said they are troubled by the imprecision of the language, the lack of stated criteria and the broad offer of immunity.
``We are trying to use what tools we have available to work with a friend, which is what Seychelles is, to show them this could be damaging not only to the United States, but to themselves,'' one official said.
LENGTH: Medium: 78 linesby CNB