Although few details have emerged about this highly sensitive operation, which is thought to have involved foreign intelligence agencies, it is known that large amounts of cash continued to be raised through the scam until it was closed down in the Philippines in 1991.

Now the same group is being targeted again. The Abu Sayyaf is included in the list of 27 organisations and groups associated with Osama bin Laden - prime suspect in the terrorist attacks on the United States - that was released by US President George W. Bush on Tuesday. Calling it a 'strike on the financial foundation' of terrorists, Mr Bush issued an executive order freezing their alleged assets.

The action, which was the first public strike by Washington in its newly declared war on terrorism, has been felt around the world. In Hong Kong and other major centres, financial institutions and banks have been scrambling to check accounts and paperwork to find out whether any of the individuals or organisations have been doing business with them, according to security consultants and private investigators.

They said the high priority being given to terrorists' sources of funding provided an opportunity for a focused and renewed effort to tackle the scourge of money laundering which in the past had not been taken seriously enough.

The Hong Kong Monetary Authority has relayed details of the alleged terror groups from the US to institutions but initial indications from officials have been that there were no accounts associated with any of the listed names. Secretary for Security Regina Ip Lau Suk-yee said: 'There is no evidence to suggest any funds or accounts related to bin Laden are in Hong Kong.'

However, one of the Saudi dissident's former financial managers has revealed bin Laden and his al-Qaeda group maintained a bank account in the SAR. While the witness, Jamal Ahmed Al-Fadl, did not tell the New York court in February - during a trial of suspects over the bombings of US embassies in Tanzania and Kenya in 1998 - the name of bin Laden's Hong Kong bankers, he is believed to have provided details to FBI investigators. These details referred to bin Laden's activities while Al-Fadl managed al-Qaeda's payroll in the mid-1990s. Al-Fadl was expelled from the network after having been discovered stealing cash in 1996.

SAR officials have remained silent about any investigations they might have conducted into the existence of any account related to bin Laden, who Al-Fadl also alleged had accounts in Malaysia, Britain, Dubai and Sudan.

Although the Abu Sayyaf money-laundering incident shows the role Hong Kong can play in money-laundering operations for terrorists, analysts said there was little other evidence - apart from its role as an international finance centre - to suggest the SAR was a major centre for terrorist business operations. A search of Companies Registry records by the South China Morning Post showed no evidence of the listed organisations or individuals acting as directors of businesses in Hong Kong.

The US actions against terror's financiers require American banks to freeze the assets of the listed groups and individuals holding accounts with them. It also prohibits US citizens and businesses from dealing with them. They also have an international dimension: Washington is asking foreign institutions and governments to freeze or block access to funds, and threatening to punish those doing business in the US if they do not take action.

The US Government's attempts to focus international attention on the list of 27 individuals and groups was a 'much smarter way forward' than previous efforts which had been much broader and relied on international conventions and long lists of banned people and organisations, said PricewaterhouseCoopers Investigations managing director Steve Vickers.

Financial institutions in the SAR had started checking their records for any links using the initial list, he said. 'It's a starting point. It does allow financial institutions which are compliant, and most are, to make a start,' said Mr Vickers, who previously headed the police Criminal Intelligence Bureau. Institutions with highly developed information systems and experts would even seek to widen searches beyond those named on the list, he said.

The effectiveness of the US tactics against terrorist business operations depended on a unified response from the financial community internationally, said Phillip Layton, director of security and investigations firm Armor Group and a former Commercial Crime Bureau officer. 'It is going to be a hard thing to do. If just one bank fails to comply and is prepared to continue doing business [with the alleged terror groups] then it will be difficult.'

The alleged terrorists and groups named on the list were unlikely to have accounts in their own names, said John Baxter, executive director of Quest Research and a former detective in the Commercial Crime Bureau. As well as running the listed names through computer systems to search accounts, banks should be able to detect any suspicious transactions through 'know your client' programmes, he said.

Suspicious transactions are reported to the joint financial intelligence unit operated by the police and customs forces. Financial institutions check names from a variety of sources and one of the most important is the lists of hundreds of groups and individuals released by the US Treasury Department's Office of Foreign Assets Control.

Experts in money-laundering detection said SAR laws seemed to have been drawn up to deal with the proceeds of drug trafficking and organised crime. The Security Bureau said Hong Kong laws did not specifically address terrorism, but terrorist-type activities were covered by the Organised and Serious Crimes Ordinance which allowed authorities to confiscate money associated with terrorism. Funds could also be seized under the Mutual Legal Assistance in Criminal Matters Ordinance.

The Hong Kong Monetary Authority said it is 'studying the legal and operational implications' of the list released by Mr Bush 'and expect to be able to offer further information on it soon'.

Most of the 80 prosecutions relating to money laundering in the past five years arose from the proceeds of narcotics crimes, said Neil Maloney, a director of commercial inquiries at Hill and Associates who formerly worked with the Independent Commission Against Corruption (ICAC). Terrorists professed to be pursuing religious or political goals but they were also motivated by money, he said. Housing, feeding and training operatives in Pakistan and Afghanistan would cost bin Laden's network millions of dollars. Links were believed to exist between his al-Qaeda network and the trafficking of opium from Afghanistan which involved laundering money, said Mr Maloney.

Evidence is already emerging that criminals might find it more difficult to wash their dirty money in future. Mr Maloney said an international money-laundering conference he attended in Britain in the days following the terrorist attack showed a renewed resolve among participants to crack down on the problem.

While money laundering relating to terrorism in Hong Kong might not have been a problem in the past, Mr Maloney said his own experience showed local syndicates would be willing to deal with the likes of al-Qaeda.

An ICAC 'sting' operation two years ago involved laundering US$500,000 (about HK$3.9 million) through a laundering group operating from within Macau casinos. The group would take the cash from the undercover agents and issue a casino cheque for the same amount - less a commission - to the agents, so that it would be seen as representing legitimate winnings from gambling.

Undercover operatives told syndicate members the suitcase of money came from the proceeds of organised crime in Russia, the vice trade and weapons dealing, said Mr Maloney. 'They were not concerned about where the money came from. I don't think that if the money came from Osama bin Laden they would care.'

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'If one bank is prepared to do business [with terror groups] it will be difficult'