STRASBOURG, Nov 13: The European Parliament on Tuesday approved by a large majority tougher anti-money laundering legislation, seen as the cornerstone of the European Union’s war on the financing of crime.

Jolted by the September 11 attacks on the United States, EU leaders pledged at a summit in Ghent last month that Europe would rapidly adopt new laws to help stifle financial support for terrorist organisations.

The vote paves the way for ratification and implementation of the new legislation in the 15 European Union countries.

It will set a new international benchmark for the fight against money-laundering, European Commission spokesman Jonathan Todd told Reuters.

A breakdown of the vote was not immediately available.

The new laws extend the obligation to report on money laundering activities to all non-financial professionals likely to come across large sums, from lawyers to luxury good dealers to casino operators.

EU governments will widen the prohibition of money laundering in relation to all form of organised crime, and not only when related to drug trafficking, as in the past.

The new laws had been held up for weeks by a dispute between Parliament and EU governments on whether to oblige lawyers — often believed to glean vital evidence of money laundering — to disclose confidential information about the financial position of their clients.

Under a compromise hammered out between representatives of the Parliament, member states and the European Commission, lawyers will have a duty to disclose information when participating in financial or corporate transactions.

They will be barred from taking part in money laundering activities and will have to report on requests by clients to carry out unlawful acts.

But to preserve traditional lawer-client confidentiality, they will be exempted from reporting information obtained in conjunction with judicial proceedings or when giving general legal advice.

Although the new laws are seen as a major step in the fight against the financing of crime, much still has to be done to strenghten the fight against terrorism, expert say.

In cooperation with the international crime-fighting Financial Action Task Force, the EU is seeking to extend strict reporting requirements to countries that have so far failed to embrace effective anti-money laundering legislation.

The FATF, which has drafted a list of non-cooperative countries, agreed at a meeting earlier this month to start assessing states against measures taken to combat the financing of terrorism in the second half of 2002.—Reuters