The Asian/Pacific region encompasses Afghanistan and Pakistan in the west, stretches across India and Indochina and in the east reaches the shores of the Americas. Although this region has a tradition of international underground banking systems used to launder funds, the region is now in the process of shifting to more sophisticated, Western- oriented corporate structures found in off-shore financial centers to launder funds. One reason for this is that drug trafficking organizations and their fellow travelers are searching for new locations to launder funds where financial supervision and regulations are weak and law enforcement expertise is low. Also, the region is a huge market with the highest growth rates in the world. A number of countries in the region have sophisticated financial systems and have developed facilities for a gold/drug trade, usually based on smuggling. This commerce in gold is reinforced by the well- established underground banking systems in the Hundi and Hawala systems. Another reason is that outside of Japan and South Korea, most wealth in East Asia is in the hands of the overseas Chinese, who have a strong tradition of holding funds in offshore financial centers or moving funds outside of the formal banking system. Further, the region has a large number of small, poor countries and territories for which offshore finance can provide the means of augmenting national revenues. Other reasons for the growth in money laundering in the region include growth in the heroin trade, a number of countries in the stage of transitional economies, the lack of perception that money laundering is a serious problem, and the use of the region for money laundering by groups outside the region. 17 footnotes