Many industrialised countries will have to tighten laws on money laundering under new international standards adopted yesterday.

The Financial Action Task Force (FATF), the group of advanced countries that has led the fight against money laundering and terrorism financing, agreed at a conference in Berlin to extend money laundering measures from banks to casinos, lawyers, accountants, real estate agents and other sectors.

They now face stricter due diligence processes and closer examination of their book-keeping and business records.

The taskforce agreed on the inclusion of smuggling, organised crime and human trafficking in laws that underpin the offence of money laundering, as well as controls on correspondence banking and shell banks.

Mr Jochen Sanio, the taskforce president, said members were obliged to begin immediately to implement the changes with external assessments of each country's progress starting late next year.

The agreement on revisions to the taskforce's 40 core recommendations represents a hard-fought compromise, papering over significant differences, especially between the US and Europe.

Mr Sanio, president of Germany's BaFin financial regulator, said the changes to the recommendations - the most sweeping since their initial adoption in 1990 - were a quantum leap forward.

Mr Daniel Glazer, head of the US delegation, said many of the changes were already part of the new Patriot Act to tighten internal security, but other measures might be needed.

Mr Simon Moyse, of the UK finance ministry, said Britain would review what legal changes were needed but that several aspects were included in a draft European Union directive.

German officials said modest legal alterations would be required.

Mr Glazer said the two years of talks had been difficult at times. There were genuine differences of approach between the US and other countries. The US preferred recommendations limited to flexible principles, while others preferred more detailed standards.

The meeting also adopted anti-terrorism best practices to control underground banks.

Mr Glazer rejected criticism by Germany that the US was hindering efforts to limit the flow of terrorist funds through these banks.

"Our system is fully compliant with the FATF terrorism recommendations," he said, adding the US preferred to regulate such enterprises - such as travel agents and export/import companies - with a soft touch, via a registration system. - (Financial Times Service)