FATF blacklist

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The FATF blacklist was the common shorthand description for the Financial Action Task Force list of "Non-Cooperative Countries or Territories" (NCCTs); i.e., countries which it perceived to be non-cooperative in the global fight against money laundering and terrorist financing. Although non-appearance on the blacklist was 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 included countries that did not operate as offshore financial centres. The FATF updates the blacklist regularly, designating countries to be added or deleted.

The term "non-cooperative" was sometimes criticized as misleading, as a number of the countries which appeared on the list simply lacked the infrastructure or resources to cope with relatively sophisticated financial criminals who try to operate there. Since 2008 the FATF has, at the behest of G20 leaders, installed a more analytical process of identifying jurisdictions deficient in their anti-money laundering (AML) and anti-terrorist financing regimes.

The latest FATF blacklist report[edit]

June 2014[edit]

A total of 6 countries were identified as jurisdictions that have strategic deficiencies that pose a risk to the international financial system.[1]

Jurisdictions subject to a FATF call on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/TF) risks emanating from the jurisdictions.

  1.  Iran
  2.  North Korea

Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies. The FATF calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction.

  1.  Algeria
  2.  Ecuador
  3.  Indonesia
  4.  Myanmar

February 2014[edit]

A total of 11 countries were identified as jurisdictions that have strategic deficiencies that pose a risk to the international financial system.[2]

Jurisdictions subject to a FATF call on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/TF) risks emanating from the jurisdictions.

  1.  Iran
  2.  North Korea

Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies. The FATF calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction.

  1.  Algeria
  2.  Ecuador
  3.  Ethiopia
  4.  Indonesia
  5.  Myanmar
  6.  Pakistan
  7.  Syria
  8.  Turkey
  9.  Yemen

October 2013[edit]

A total of 13 countries were identified as jurisdictions that have strategic deficiencies that pose a risk to the international financial system.[3]

Jurisdictions subject to a FATF call on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/TF) risks emanating from the jurisdictions.

  1.  Iran
  2.  North Korea

Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies. The FATF calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction.

  1.  Algeria
  2.  Ecuador
  3.  Ethiopia
  4.  Indonesia
  5.  Kenya
  6.  Myanmar
  7.  Pakistan
  8.  Syria
  9.  Tanzania
  10.  Turkey
  11.  Yemen

June 2013[edit]

A total of 14 countries were identified as jurisdictions that have strategic deficiencies that pose a risk to the international financial system.[4]

Jurisdictions subject to a FATF call on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/TF) risks emanating from the jurisdictions.

  1.  Iran
  2.  North Korea

Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan developed with the FATF to address the deficiencies. The FATF calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction.

  1.  Ecuador
  2.  Ethiopia
  3.  Indonesia
  4.  Kenya
  5.  Myanmar
  6.  Pakistan
  7.  São Tomé and Príncipe
  8.  Syria
  9.  Tanzania
  10.  Turkey
  11.  Vietnam
  12.  Yemen

February 2012[edit]

A total of 17 countries were labeled as high-risk and non-cooperative jurisdictions by FATF. All listed countries below are defined as such; however, counter-measures are in force only for Iran and the Democratic People's Republic of Korea (DPRK, North Korea).[5]

Counter-measures apply to these countries: high-risk and non-cooperative[edit]

  1.  Iran
  2.  North Korea

Countries not committed to an action plan: high-risk and non-cooperative[edit]

  1.  Bolivia
  2.  Cuba
  3.  Ethiopia
  4.  Ghana
  5.  Indonesia
  6.  Kenya
  7.  Myanmar
  8.  Nigeria
  9.  Pakistan
  10.  São Tomé and Príncipe
  11.  Sri Lanka
  12.  Syria
  13.  Tanzania
  14.  Thailand
  15.  Turkey

The latest countries with on-going FATF process compliance[edit]

February 2012[edit]

A total of 23 countries are committed to the FATF standard, but have not yet implemented it.[6]

Countries committed and addressing AML/CFT deficiencies[edit]

  1.  Algeria
  2.  Angola
  3.  Antigua and Barbuda
  4.  Argentina
  5.  Bangladesh
  6.  Brunei Darussalam
  7.  Cambodia
  8.  Kyrgyzstan
  9.  Mongolia
  10.  Morocco
  11.  Namibia
  12.    Nepal
  13.  Nicaragua
  14.  Sudan
  15.  Tajikistan
  16.  Trinidad and Tobago
  17.  Turkmenistan
  18.  Venezuela
  19.  Zimbabwe

Countries committed, but not making sufficient progress[edit]

  1.  Ecuador
  2.  Philippines
  3.  Vietnam
  4.  Yemen

History of the FATF blacklist (NCCT jurisdictions)[edit]

http://www.fatf-gafi.org/dataoecd

June 2000 report[edit]

The plenary list, consisting of fifteen countries regarded as uncooperative in the fight against money laundering, was published in June 2000, viz:[7]

  1.  Bahamas
  2.  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.  Russian Federation
  14.  Saint Kitts and Nevis
  15.  Saint Vincent and the Grenadines

The initial list met much criticism from professionals experienced in the offshore financial sector. The designation of the Cayman Islands as non-cooperative was thought to be harsh,[8] 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 cooperation on criminal law enforcement matters, and uncovered several serious cases of fraud and money laundering otherwise unknown to authorities in FATF member states."

June 2001 report[edit]

The second FATF report, published in 2001 and including a supplemental report in September, denoted a further eight countries as non-cooperative:

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

June 2006 report[edit]

The seventh list, published in June 2006,[9] listed only the following country as non-cooperative:

  1.  Burma

June 2007 report[edit]

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.[10] Myanmar (formerly Burma) was removed on 13 October 2006, Nauru on 13 October 2005 and Nigeria on 23 June 2006.[10]

June 2009 report[edit]

FATF issued a "Statement" on 25 February 2009 noting concerns and encouraging greater compliance by the following countries:[11]

  1.  Iran
  2.  Pakistan
  3.  Turkmenistan
  4.  Uzbekistan
  5.  São Tomé and Príncipe

OECD "gray list"[edit]

implementation of the internationally agreed tax standard
  substantially implemented the standard
  committed to the standard, but have not yet substantially implemented it
  have not committed to the standard (none)
  jurisdiction not monitored

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.[12] 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.[13]

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 where undeclared revenue is allegedly hidden and which host many of the non-regulated hedge funds that came under fire during the 2008 financial crisis. Germany, France, and other countries called on the OECD to add Switzerland to a blacklist of countries which encourage tax fraud.[14]

The OECD gray list reports monitor the implementation of the internationally agreed tax standard in select jurisdictions – tax havens or other financial centers of interest. The list of jurisdictions is divided in three parts.[15]

Global forum compliance[edit]

Global forum reviews
  Phase 1&2 completed
  Phase 1 completed
  phase 1 review not finalized
  Phase 1 compliance insufficient
  jurisdiction not member of the forum

The Global Forum on Transparency and Exchange of Information for Tax Purposes reviews and issues reports on compliance of its member tax jurisdictions. The Global Forum's peer review process examines both the legal and regulatory aspects of exchange (Phase 1 reviews) and the exchange of information in practice (Phase 2).

As of November 2011 the phase one or combined (phases 1&2) reviews of 59 jurisdictions have been completed. The final phase two review is expected to be finalized in the first half of 2014.[18]

Of the completed reviews, the following jurisdictions are not ready for phase two: Antigua and Barbuda, Barbados, Botswana, Brunei, Liechtenstein, Panama, Seychelles, Switzerland, Trinidad and Tobago, Uruguay, and Vanuatu.[18][19]

See also[edit]

References[edit]

  1. ^ "FATF Public Statement - 27 June 2014". FATF. June 27, 2014. Retrieved October 6, 2014. 
  2. ^ "FATF Public Statement - 14 February 2014". FATF. February 14, 2014. Retrieved October 6, 2014. 
  3. ^ "FATF Public Statement - 18 October 2013". FATF. October 18, 2013. Retrieved October 6, 2014. 
  4. ^ "FATF Public Statement - 21 June 2013". FATF. June 21, 2013. Retrieved October 6, 2014. 
  5. ^ "FATF Public Statement - 16 February 2012". FATF. February 16, 2012. Retrieved October 6, 2014. 
  6. ^ Documents:- Improving Global AML/CFT Compliance: on-going process - 16 February 2012
  7. ^ FATF Public Statement 22 February 2013: High-risk and non-cooperative jurisdictions
  8. ^ Jeremy Hetherington-Gore (n.d.), The Cayman Islands – Paradise Regained?.
  9. ^ Error:- 404 - Financial Action Task Force (FATF)
  10. ^ a b Error:- 404 - Financial Action Task Force (FATF)
  11. ^ Error:- 404 - Financial Action Task Force (FATF)
  12. ^ Tax and crime - Organisation for Economic Co-operation and Development
  13. ^ Harmful tax practices - Organisation for Economic Co-operation and Development
  14. ^ Calls from 17 countries for new tax haven blacklist | euronews, world news
  15. ^ A PROGRESS REPORT ON THE JURISDICTIONS SURVEYED BY THE OECD GLOBAL FORUM IN IMPLEMENTING THE INTERNATIONALLY AGREED TAX STANDARD
  16. ^ Bangkok Post, 12 March 2010, p. B5
  17. ^ A PROGRESS REPORT ON THE JURISDICTIONS SURVEYED BY THE OECD GLOBAL FORUM IN IMPLEMENTING THE INTERNATIONALLY AGREED TAX STANDARD, as of 2 November 2011
  18. ^ a b Tax Transparency 2011: Report on Progress
  19. ^ France threatens Switzerland on tax evasion

External links[edit]