BELARUS NEWS AND ANALYSIS

DATE:

23/10/2008

Belarus to ease controls on deposits, banks

MINSK, Oct 23 (Reuters) - President Alexander Lukashenko on Thursday said Belarus would loosen control on foreign deposits and limit oversight of banking activity by security forces in his ex-Soviet state.

Lukashenko, addressing members of the outgoing parliament, said easing restrictions would make Belarus's banks more attractive in conditions of worldwide financial crisis.

He spoke after the International Monetary Fund said it was sending a mission to Minsk to discuss Belarus's request for a credit of $2 billion to help offset the effects of the crisis.

The president's remarks were aimed at eliminating the need for a declaration of income for any deposit exceeding $32,000 to be deposited in a Belarussian bank.

'Foreigners are bringing in large sums to deposit in our banks because Belarus is free of the corruption seen in other countries,' Lukashenko said.

'But when someone goes into a bank he is told to declare where the money came from and how he acquired it. We intend to uphold principles of combatting money laundering. But why should we be so far out in front of the rest of the world?

'The president has already taken a clear decision to do away with obligatory declarations when making a bank deposit.'

Lukashenko said rules allowing security bodies to secure information from banks would also be abandoned.

'They will not have the right to demand information from banks about individuals' deposits if no criminal charges are involved. We will try to keep such procedures to a minimum.'

Bank deposits in Belarus have risen by 25 percent since the beginning of the year and now total $6.5 billion, including $2.1 billion in foreign currency.

Belarus has suffered limited effects from the worldwide financial crisis, but is experiencing difficulty raising credit on foreign markets. The country's foreign exchange reserves were reduced to $4.9 billion from $5.6 billion last month.

In his remarks, Lukashenko blamed the crisis on 'corruption at the highest levels of Western countries'. Westerners, he said, were welcome to invest in Belarus, where his administration was fighting corrupt practices.

In September, Belarus was ranked 151st out of the 180 countries listed in

Transparency International's 2008 Corruption Perceptions Index, which measures perceived public sector corruption. The country was given a score of 2.0 out of 10, with scores below 3.0 indicating 'rampant' corruption.

Lukashenko, in power since 1994, has kept much of the economy in state hands and maintains a system of generous pensions and subsidies that has kept him generally popular.

He has sought improved ties with the West after quarrelling with traditional ally Russia last year over energy prices.

The European Union this month suspended a visa ban on the president as a reward for releasing what Western countries called Belarus's last political prisoners.

The ban still applies to several officials, including Belarus's top election official, after Western monitors said a parliamentary poll fell short of acceptable standards.

(Writing by Ron Popeski; Editing by Andy Bruce)

Source:

http://www.hemscott.com/news/static/tfn/item.do?newsId=68240589939799

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