By Kazi Mahmood, IOL Southeast Asia Correspondent

KUALA LUMPUR, October 1 (IslamOnline) - The fight against terror is taking deeper roots in South East Asia with several countries setting up fresh agencies to counter terrorism on all fronts, including financial and economic fronts, news agencies reported on Tuesday.

The Philippines and Indonesia are next in the list of countries attempting to create Anti-Money Laundering task forces, though it is not certain whether they will successfully launch such agencies.

The intricate nature of money transactions in Thailand, Indonesia and the Philippines renders the task of officials to near impossibility to detect whether money deposited or transacted is of terror sources.

Indonesia, a Central Bank official said on Monday, was on a blacklist of countries accused of being safe heavens for dirty money. Laundering is increasingly linked to terrorist organizations such as the Al-Qaedah, sources said.

The U.S. and Britain has urged these two countries to scrutinize bank accounts supposedly linked to terror movements or to Osama Bin Laden, the sources told IslamOnline, however Indonesia is yet to establish such a task force.

The Philippines has already voted anti-Laundering laws but are still in the process of deciphering whether terror money is stashed in its banks. There is a lot of confusion on this issue in Manila since several Arab businessmen have huge deposits in certain banks in the country.

In Thailand the same situation arises though the country has strict guidelines on monetary deposits from abroad. However due to the nature of the banking system in Bangkok, foreigners are allowed to transact in huge amount of funds and deposits from Middle Eastern individuals can amount to several million.

In Paris Financial Action Task Forces (FATF), an International task force against money laundering urged Indonesia to establish a local task force which would allow it to verify accounts suspected of being of terror origins or of having money laundering sources, the Jakarta Post said on Tuesday.

Bank Indonesia deputy director Yunus Husein said to the Post that Indonesia was still not cooperating with the world's anti-money laundering drive.

Yunus indicated though that Indonesia, which is desperately trying to restore foreign investor confidence, had made significant progress in the anti-money laundering drive.

It had successfully passed an anti-money laundering law, welcomed by the international community, though it came under fire for rejecting accusations from the U.S. media that it was “harboring” terror money.

Last August Bank Indonesia swiftly embarked on tighter banking supervision and found 40 financial transactions at seven banks, which were allegedly connected with money laundering.

Husein said the steps were not enough to restore foreign confidence and remove Indonesia from the blacklist.

In Malaysia, the country’s Central Bank the Bank Negara ordered all the local banks and international banks in the country to check their records to detect any illegal transactions linked to terror organizations or money laundering.

Malaysia’s offshore center, Labuan, has also been scrutinized in the process, an official in Kuala Lumpur said. The official, working for a foreign bank in the city said no terror accounts were found in Malaysia.

Malaysian Prime Minister Mohamad Mahathir earlier this year said the Malaysian banking system was “terror” free and there was no money laundering in Malaysia, much to the displeasure of US and British officials who expected to find “terror” links in the country.

Earlier this year, U.S. officials sent a list of suspected companies and account numbers to the Malaysian government for a thorough check and this too did not give the result they expected, the official said.

In Jakarta, Husein said the establishment of the anti-money laundering agency, to be called the Financial Transaction and Report Analysis Center (PPATK), would be a focal point before Indonesia could be removed from the blacklist.

The agency would be of high importance as it would be in charge of analyzing and investigating reported suspicious transactions, as well as individuals and financial institutions which failed to report suspicious financial transactions.