Members of the G7 club of industrialised nations have threatened tough action against countries which permit money laundering on their territory.

After meeting in Japan, G7 finance ministers warned that states which fail to join international efforts to combat such transactions could face sanctions.

One of the countries they are targeting is Russia, which was named in a recent report as one of 15 major havens for illegal funds.

The move is being seen as an attempt by the G7 to give the issue higher priority on the international agenda.

Reluctance

France in particular has been pushing for more concerted international action.

The G7 - which also includes the United States, Japan, Canada, Germany, Britain and Italy - has in the past been seen as reluctant to threaten direct measures.

Host: Japan's finance minister Kiichi Miyazawa

In a joint statement after their talks, the ministers agreed to focus on the record of the 15 countries named in the report, produced by the Organisation for Economic Co-operation and Development (OECD).

The finance ministers said scrutiny would be stepped up.

If the countries fail to cooperate, they could face additional measures, including cuts in support from international financial institutions, such as the World Bank and the International Monetary Fund.

Bold approach

But this 'naming and shaming' approach could prove controversial, especially in relation to Russia.

Moscow is a member of the so-called Group of Eight - the G7 group plus Russia.

The Russian finance minister, Aleksey Kudrin, attended some of the meetings in Japan, as a prelude to the summit meeting of all G8 countries, to be held later this month.

But it is not just Russia that is seen as a haven for crime bosses seeking havens for their funds.

Countries such as Israel and the Philippines were also labelled by the OECD's Financial Action Task Force on money laundering as countries without strict enough controls.

The list of 15 also included several Caribbean islands - such as the Bahamas and the Caymans.

The G7 finance ministers said the globalization of the world economy had made it easier for money launderers to support the activities of drug traffickers, terrorists and corrupt officials.