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The FATF Blacklist is the common shorthand description for the Financial Action Task Force list of "Non-Cooperative Countries or Territories" (NCCTs); that is, countries which it perceives to be non-cooperative in the global fight against money laundering and terrorist financing. Although non-appearance on the blacklist is perceived to be a mark of approbation for Offshore Financial Centres (or "tax havens") who are sufficiently well regulated to meet all of the FATF's criteria, in practice the list encompasses a large proportion of countries that do not operate as offshore financial centres.

The FATF produces annual reports, designating countries that go on to and come off the list.[2] The general trend has been towards countries coming off the list, as there is an obvious incentive for countries to tighten up areas criticised in the FATF reports as not meeting the required international standards. As at December 2009 there are no officially listed NCCTs[1]. See http://www.fatf-gafi.org/dataoecd/14/11/39552632.pdf for the most recent full report. 21 countries have been de-listed, and only 8 countries have been added since the additional list (interestingly, none of which were offshore jurisdictions).

The term non-cooperative is sometimes criticised as misleading, as a number of the countries which have appeared on the list from time to time appear, not because they deliberately propagate a culture which is perceived to assist money laundering, but because they simply lack the infrastructure or resources to cope with relatively sophisticated financial criminals who try to operate there.

Contents

The first report

The plenary list was published in June 2000,[3] and fifteen countries initially appeared on the list as being regarded as uncooperative in the fight against money laundering:

  1. Bahamas
  2. The Cayman Islands
  3. Cook Islands
  4. Dominica
  5. Israel
  6. Lebanon
  7. Liechtenstein
  8. Marshall Islands
  9. Nauru
  10. Niue
  11. Panama
  12. Philippines
  13. Russia
  14. Saint Kitts and Nevis
  15. Saint Vincent and the Grenadines

The initial list met much criticism from professionals experienced in the offshore sector. The designation of the Cayman Islands as non-cooperative was thought to be harsh,[2] particularly as the 2000 report itself acknowledged that "the Cayman Islands has been a leader in developing anti-money laundering programmes throughout the Caribbean region. It has served as president of the Caribbean Financial Action Task Force, and it has provided substantial assistance to neighbouring states in the region. It has demonstrated co-operation on criminal law enforcement matters, and uncovered several serious cases of fraud and money laundering otherwise unknown to authorities in FATF member states."

The second report

In the second report, in 2001 (including a supplemental report in September) a further eight countries were designated as non-cooperative:

  1. Egypt
  2. Grenada
  3. Guatemala
  4. Hungary
  5. Indonesia
  6. Burma
  7. Nigeria
  8. Ukraine

The seventh report

The seventh list, published in June 2006,[3] listed only the following country as non-cooperative:

  1. Burma

The eighth report

FATF's Eighth NCCT Review (Annual Review of Non-Cooperative Countries and Territories 2006-2007 dated 12 October 2007) listed no countries as non-cooperative[4]. Myanmar (formerly Burma) was removed on 13 October 2006, Nauru on 13 October 2005 and Nigeria on 23 June 2006[5].

FATF issued a "Statement" on 25 February 2009 noting concerns and encouraging greater compliance by the following countries: Iran, Uzbekistan, Turkmenistan, Pakistan, and São Tomé and Príncipe[6].

"Counter measures"

Where the FATF feels that a country is not making sufficient to improve its regulation it may recommend "counter measures" against such countries. To date it has only done so against three countries: Myanmar, Nauru and Ukraine. However, counter measures have been withdrawn from all three, and as at July 2006 there are no counter measures in effect against any country.

OECD List

Although its main focus is on tax crime, the OECD is also concerned with money laundering. Its work is designed to complement that carried out by the FATF[7]. The OECD maintains a 'blacklist' of countries it considers uncooperative in the drive for transparency of tax affairs and the effective exchange of information, officially called "The List of Uncooperative Tax Havens". As of December 2009, no country is officially listed as a tax haven by the OECD[8].

On 22 October 2008, at an OECD meeting in Paris, 17 countries led by France and Germany decided to draw up a new blacklist of tax havens. The OECD has been asked to investigate around 40 new tax havens in the world where undeclared revenue is hidden and which host many of the non-regulated hedge funds that have come under fire during the 2008 financial crisis. Germany, France and other countries called on the OECD to specifically add Switzerland to a blacklist of countries which encourage tax fraud[9]

See also

External links

References

  1. ^ http://www.fatf-gafi.org/document/4/0,2340,en_32250379_32236992_33916420_1_1_1_1,00.html
  2. ^ Jeremy Hetherington-Gore (n.d.), The Cayman Islands - Paradise Regained?.
  3. ^ [1]
  4. ^ http://www.fatf-gafi.org/dataoecd/14/11/39552632.pdf
  5. ^ http://www.fatf-gafi.org/dataoecd/14/11/39552632.pdf
  6. ^ http://www.fatf-gafi.org/dataoecd/18/28/42242615.pdf
  7. ^ http://www.oecd.org/document/39/0,3343,en_2649_33767_2499879_1_1_1_37427,00.html
  8. ^ http://www.oecd.org/document/57/0,3343,en_2649_33745_30578809_1_1_1_1,00.html
  9. ^ http://www.euronews.net/2008/10/21/calls-from-17-countries-for-new-tax-haven-blacklist/
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