Financial Action Task Force blacklist
 |
The Financial Action Task Force blacklist (often abbreviated to FATF blacklist, and officially known as the "Call for action"),[1] is a blacklist maintained by the Financial Action Task Force.[2][3]
The blacklist has been issued by the FATF since 2000, and lists countries which FATF judges to be non-cooperative in the global fight against money laundering and terrorist financing, calling them "Non-Cooperative Countries or Territories" (NCCTs).[4]
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, adding or deleting entries.[4]
The FATF describes "High-risk jurisdictions subject to a Call for Action" as having "significant strategic deficiencies in their regimes to counter money laundering, terrorist financing, and financing of proliferation. For all countries identified as high-risk, the FATF calls on all members and urges all jurisdictions to apply enhanced due diligence, and in the most serious cases, countries are called upon to apply counter-measures to protect the international financial system from the ongoing money laundering, terrorist financing, and proliferation financing risks emanating from the country".[5] As of November 2022, only three countries were on the FATF blacklist: North Korea, Iran, and Myanmar.[6]
The FATF has been characterized as effective in shifting laws and regulations to combat illicit financial flows. FATF incentivizes stricter regulations through its public noncomplier list, which leads financial institutions to shift resources and services away from the countries on the blacklist. This in turn motivates domestic economic and political actors in the listed countries to pressure their governments to introduce regulations that are compliant with the FATF.[7]
History
[edit]The FATF was established by the G7 summit that was held in Paris in July 1989. Founding stakeholders include the G-7 Heads of State or Government, President of the European Commission and eight other countries.[8]
The term "non-cooperative" was criticized by some analysts as misleading, as a number of countries on the list simply lacked the infrastructure or resources to cope with relatively sophisticated financial criminals who tried to operate there.[citation needed] 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 and anti-terrorist financing regimes.[4]
Primary works
[edit]One of the main objectives of the FATF is to establish norms and standards of "legal, regulatory and operational measures" to fight against money laundering, terrorist financing and other related threats to the security and integrity of the international financial system. However, FATF "has no investigative authority." FATF works with nation-states to bring legislative changes and regulatory reforms in the aforementioned sectors.[4] In addition, the FATF also provides policy recommendations that meet international standards to countries for combating money laundering and the financing of terrorism and proliferation of weapons of mass destruction. FATF has been providing policy recommendations since 1990 and their recommendations have revised four times since then. FATF also monitors the situations of its members in establishing adequate measures and institutions to fight against money laundering and terrorist financing. FATF also makes sure that it is aware of national-level vulnerabilities of its member states "with the aim of protecting the international financial system from misuse."[9]
FATF member nations
[edit]Full members
[edit]
According to its official website, there are 39 members of FATF (earlier 40 members, Russia's membership was suspended in Feb 2023) and two Regional Organisations (European Union and Gulf Cooperation Council), representing most financial centers around the world.[10] The list consisted of the following countries:[11]
Argentina
Australia
Austria
Belgium
Brazil
Canada
China
Denmark
EU
Finland
France
Germany
Greece
Gulf Cooperation Council
Hong Kong
Iceland
India
Indonesia
Ireland
Israel
Italy
Japan
South Korea
Luxembourg
Malaysia
Mexico
Netherlands
New Zealand
Norway
Portugal
Russia
Saudi Arabia
Singapore
South Africa
Spain
Sweden
Switzerland
Turkey
United Kingdom
United States
Observer nations
[edit]There are currently no FATF observer nations, but many financial institutions participate at that level.[12]
FATF Blacklisting reports
[edit]The Blacklist is a term used by the media, which is officially called as "Call for action" nations by the FATF.
June 2000 report
[edit]The initial list of fifteen countries regarded as uncooperative in the fight against money laundering, was published in June 2000.[13] The list consisted of the following countries:[13]
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:
June 2002 report
[edit]According to June 2002 report from FATF, following countries were listed as NCCTs.[14]
June 2003 report
[edit]According to June 2003 report from FATF, the following countries were listed as NCCTs.[15]
July 2004 report
[edit]According to the July 2004 report form FATF, the following countries were listed as NCCTs.[16]
June 2005 Report
[edit]According to June 2005 report from FATF, the following were listed as NCCTs.[17]
June 2006 report
[edit]The seventh list, published in June 2006,[18] listed only the following country as non-cooperative:
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.[19] Myanmar (formerly Burma) was removed on 13 October 2006, Nauru on 13 October 2005 and Nigeria on 23 June 2006.[19]
June 2008 report
[edit]FATF's Ninth Review identified the following countries as high risk and non-cooperative.[20]
June 2009 statement
[edit]FATF issued a "public statement" on 25 February 2009 noting concerns and encouraging greater compliance by the following countries:[21]
October 2010 Statement
[edit]The following country has not made sufficient progress in addressing the deficiencies or has not committed to an action plan developed with the FATF to address the deficiencies.[22]
October 2011 Statement
[edit]The following countries 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.[23]
February 2012 statement
[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; counter-measures were in force only for Iran and the Democratic People's Republic of Korea (DPRK, North Korea).[24]
High-risk and non-cooperative countries, to whom counter-measures applied:
High-risk and non-cooperative countries, not committed to an action plan:
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.[25]
Jurisdictions subject to a FATF call on its members and other jurisdictions to apply counter-measures to protect the international financial system from the ongoing and substantial money laundering and terrorist financing (ML/TF) risks emanating from the jurisdictions.
Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan.
October 2013 statement
[edit]A total of 13 countries were identified as jurisdictions that have strategic deficiencies that pose a risk to the international financial system.[26]
Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan.
February 2014
[edit]A total of 11 countries were identified as jurisdictions with strategic deficiencies posing a risk to the international financial system.[27]
Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan.
June 2014 statement
[edit]A total of 6 countries were identified as jurisdictions that have strategic deficiencies that pose a risk to the international financial system.[28]
Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan.
February 2015 statement
[edit]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/FT) risks emanating from the jurisdictions.[29]
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, as described below.
October 2015 statement
[edit]The FATF statement issued on 23 October 2015 identified three high-risk and non-cooperative jurisdictions:[30]
Call to apply counter-measures:
Jurisdictions with strategic deficiencies:
February 2016 statement
[edit]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/FT) risks emanating from the jurisdictions.,[31]
February 2017 Statement
[edit]Regarding with North Korea, the FATF released the following concern:
"The terrorism (AML/CFT) regime and the serious threat this poses to the integrity of the international financial system. The FATF urges the DPRK to immediately and meaningfully address its AML/CFT deficiencies. Further, FATF has serious concerns with the threat posed by DPRK's illicit activities related to the proliferation of weapons of mass destruction (WMDs) and its financing."[32]
Current FATF lists
[edit]
Current FATF blacklist
[edit]
As of 25 October 2024, the following countries were on this list:[33]
Current FATF grey list
[edit]As of 25 October 2024, the following 21 countries/territories were on this list:[33]
FATF review meeting
[edit]The FATF Plenary, the making body, meets three times a year around February, June and October.[37][38]
- In June 2021, the FATF stated that Mauritius and Botswana completed their action plans and will be subject to on-site visits before being removed from the list in October 2021.
- Ghana was officially delisted from the grey list[when?] following the completion of its action plan and a successful on-site visit by assessors.[citation needed]
- In June 2021, Haiti, Malta, the Philippines and South Sudan have been added to the grey list.[39][40][41]
- In March 2022, the United Arab Emirates was added to the grey list, while Zimbabwe was removed from the list.[42][43]
- In October 2022, Pakistan was removed from the grey list.[44]
- In February 2023, Morocco was removed from the grey list.[45]
- Albania, Cayman Islands, Jordan, Panama, have been removed from the list.[when?][citation needed]
- In October 2024, Lebanon was added to the grey list.[34]
Other similar lists
[edit]OECD "grey list"
[edit]
Although its main focus is on tax crime, OECD is also concerned with money laundering and has complemented the work carried out by the FATF.[46]
The OECD has maintained a 'blacklist' of countries it considers "uncooperative tax havens" in the drive for transparency of tax affairs and the effective exchange of information, officially called "The List of Uncooperative Tax Havens". Since May 2009, no countries were officially listed as uncooperative tax havens in the light of their commitments to implement the OECD standards.[47]
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. It had been asked to investigate around 40 new tax havens where undeclared revenue was hidden and which hosted many of the non-regulated hedge funds that came under fire during the financial crisis of 2007–08. Germany, France, and other countries called on the OECD to add Switzerland to a blacklist of countries which encourage tax fraud.[48] On 2 April 2009, the OECD published a list of countries, divided into three parts depending on whether they implemented an "internationally agreed tax standard", in select jurisdictions – tax havens or other financial centers of interest.[49]
- substantially implemented the standard: Andorra, Anguilla, Antigua and Barbuda, Argentina, Aruba, Australia, Austria, Bahamas, Bahrain, Barbados, Belgium, Belize, Bermuda, Brazil, British Virgin Islands, Brunei, Canada, Cayman Islands,[50] Chile, China, Cook Islands, Costa Rica, Cyprus, Czech Republic, Denmark, Dominica, Estonia, Finland, France, Germany, Gibraltar, Greece, Grenada, Guernsey, Hong Kong, Hungary, Iceland, India, Indonesia, Ireland, Isle of Man, Israel, Italy, Japan, Jersey, South Korea, Liberia, Liechtenstein, Luxembourg, Macao, Malaysia, Malta, Marshall Islands, Mauritius, Mexico, Monaco, Montserrat, Netherlands, Netherlands Antilles, New Zealand, Norway, Pakistan, Panama, Philippines, Poland, Portugal, Qatar, Russia, St. Kitts and Nevis, St. Lucia, St. Vincent and the Grenadines, Samoa, San Marino, Seychelles, Singapore, Slovakia, Slovenia, South Africa, Spain, Sweden, Switzerland, Turkey, Turks and Caicos Islands, United Arab Emirates, United Kingdom, United States, US Virgin Islands, Vanuatu. This is not a complete list, as many countries, including Lebanon, Nigeria and many more are not included in this list.
- committed to the standard, but have not yet substantially implemented it: Nauru, Niue, Guatemala, Uruguay
- have not committed to the standard: none as of October 2009.[51]
Global forum compliance
[edit]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).[citation needed]
Other nations regularly accused of terror financing
[edit]Qatar continues to finance Hamas, a militant group designated as a terrorist organization by the US; allows the Taliban to maintain offices in Qatar, and is the largest state-ally of the Muslim Brotherhood.[52] However, a June 2023 FATF report, claimed that Qatar has shown a government-wide effort to address ML/TF risks and to implement an effective targeted financial sanctions (TFS) regime. The report cited an updated AML/CFT law providing law enforcement with tools and improves inter-agency coordination in Qatar; the establishment of the Qatar Financial Centre (QFC) tasked with supervision with an AML/CFT supervisory team at the QFC Regulatory Authority; and a 2019 law on combating terrorism financing.[53]
Nations such as Bahrain, Egypt, Saudi Arabia, and the UAE have also been accused of doing very little to prevent the flow of funds for terror financing in other nations. Bahrain accepts Muslim Brotherhood-affiliate Minbar as a legitimate political player, and Saudi Arabia collaborates with the Muslim Brotherhood-affiliate al-Islah in Yemen. Saudi Arabia and the UAE have been accused of hypocrisy in the 2017 Qatar diplomatic crisis, as they too face accusations of not doing enough to stop terror financing, and both nations have links to terrorist organisations in the Middle East.[54] In March 2022, the FATF added the UAE to its grey list of jurisdictions subject to increased monitoring, as it claims that the country is non-cooperative in the global fight against money laundering and terror financing.[55][56]
See also
[edit]
- Asia/Pacific Group on Money Laundering
- Hawala
- Informal value transfer system
- Remittance
- Riba
- Offshore financial centre
- Terrorism financing
References
[edit]- ^ FATF nations, Full member nations, Observer nations, Call for action nations (Blacklisted nations), Other monitored jurisdictions (greylisted nations), FATF, accessed 24 October 2019.
- ^ "About FATF". FATF. Archived from the original on 27 April 2018. Retrieved 1 May 2018.
- ^ Chohan, Usman W. (14 March 2019). "The FATF in the Global Financial Architecture: Challenges and Implications". International, Transnational & Comparative Law Journal. UNSW Business School; Critical Blockchain Research Initiative (CBRI); Centre for Aerospace & Security Studies (CASS). doi:10.2139/ssrn.3362167. S2CID 197804604. SSRN 3362167.
- ^ a b c d "FATF Works". FATF. Archived from the original on 7 May 2018. Retrieved 1 May 2018.
- ^ "Countries - Financial Action Task Force (FATF)". www.fatf-gafi.org.
- ^ "Countries - Financial Action Task Force (FATF)". www.fatf-gafi.org. Retrieved 13 November 2022.
- ^ Morse, Julia C. (2021). The Bankers' Blacklist: Unofficial Market Enforcement and the Global Fight against Illicit Financing. Cornell University Press. ISBN 978-1-5017-6151-5. JSTOR 10.7591/j.ctv1hw3x0d.
- ^ "History of FATF". FATF. Archived from the original on 19 June 2016. Retrieved 1 May 2018.
- ^ "Policy Recommendations". Retrieved 1 May 2018.
- ^ "FATF Members and Observers". FATF. Archived from the original on 5 July 2019. Retrieved 22 October 2024.
- ^ "FATF Members and Observers". Archived from the original on 5 July 2019. Retrieved 22 October 2024.
- ^ "FATF Observers". FATF. Archived from the original on 19 September 2015. Retrieved 22 October 2024.
- ^ a b "June 2000 Report" (PDF). FATF. Retrieved 5 Oct 2022.
- ^ "June 2002 Report" (PDF). FATF. Retrieved 2 May 2018.
- ^ "June 2003 report" (PDF). FATF. Retrieved 2 May 2018.
- ^ "July 2004 Report" (PDF). FATF. Retrieved 2 May 2018.
- ^ "June 2005 Report" (PDF). FATF. Retrieved 2 May 2018.
- ^ Error:- 404 - Financial Action Task Force (FATF) Archived 15 July 2006 at the Wayback Machine
- ^ a b "Annual Review of Non-Cooperative Countries and Territories 2006-2007: Eighth NCCT Review" (PDF). Financial Action Task Force (FATF). Archived from the original (PDF) on 31 October 2008.
- ^ FATF Statement - 20 June 2008 Financial Action Task Force (FATF)
- ^ FATF Statement concerning Iran, Uzbekistan, Turkmenistan, Pakistan* and India and Príncipe - 26 June 2009 Financial Action Task Force (FATF) Archived 7 October 2009 at the Wayback Machine
- ^ "FATF Public Statement 2010". FATF. Retrieved 2 May 2018.
- ^ "FATA Public Statement 2011". FATF. Archived from the original on 3 May 2018. Retrieved 2 May 2018.
- ^ "FATF Public Statement - 16 February 2012". FATF. 16 February 2012. Archived from the original on 6 October 2014. Retrieved 6 October 2014.
- ^ "FATF Public Statement - 21 June 2013". FATF. 21 June 2013. Archived from the original on 14 August 2013. Retrieved 6 October 2014.
- ^ "FATF Public Statement - 18 October 2013". FATF. 18 October 2013. Retrieved 6 October 2014.
- ^ "FATF Public Statement - 14 February 2014". FATF. 14 February 2014. Retrieved 6 October 2014.
- ^ "FATF Public Statement - 27 June 2014". FATF. 27 June 2014. Archived from the original on 6 October 2014. Retrieved 6 October 2014.
- ^ "FATF Public Statement - 27 February 2015".
- ^ "FATF Public Statement - 23 October 2015". Financial Action Task Force (FATF). Retrieved 20 November 2015.
- ^ "FATF Public Statement – 19 February 2016". Financial Action Task Force (FATF). Retrieved 31 March 2023.
- ^ "TATF Public Statement 2017". FATF. Retrieved 2 May 2018.
- ^ a b ""Black and grey" lists". FATF. Retrieved 27 January 2024.
- ^ a b Watchdog FATF places Lebanon on financial crime watchlist, Timour Azhari and Makini Brice for Reuters, posted and retrieved 25 Oct 2024.
- ^ a b Mengqi Sun (2024), Monaco, Venezuela Placed on Global Money-Laundering Watch List, Wall Street Journal, 28 June.>
- ^ "FATF adds Vietnam on grey list over weapons-proliferation risks". Firstpost. 24 June 2023. Retrieved 25 June 2023.
- ^ Pakistan fails to meet terror finance watchdog's action points, Qrius, 17 June 2019.
- ^ Clear warning: FATF statement Archived 24 October 2019 at the Wayback Machine, Business recorder, 22 October 2019.
- ^ "Outcomes FATF Plenary, 20-25 June 2021". FATF. 25 June 2021. Retrieved 27 June 2021.
- ^ "FATF Plenary, June 2021". FATF. 21 June 2021. Archived from the original on 25 June 2021. Retrieved 27 June 2021.
- ^ "FATF Plenary Packs Powerful Punch". Regulation Asia. 25 June 2021. Retrieved 27 June 2021.
- ^ U.A.E. Placed on Global Watch List for Money Laundering, Terrorism Financing, The Wall Street Journal, 4 March 2022.
- ^ FATF retains Pakistan on grey list, adds UAE, Tribune India, 6 March 2022.
- ^ "Pakistan is out of FATF grey list after four years — here's what it took". cnbctv18.com. 21 October 2022.
- ^ "FATF suspends Russia's membership over Ukraine war". 24 February 2023.
- ^ "Tax and crime - Organisation for Economic Co-operation and Development". Archived from the original on 8 September 2012.
- ^ List of Unco-operative Tax Havens Organisation for Economic Co-operation and Development] n.d., retrieved 7 May 2016
- ^ Calls from 17 countries for new tax haven blacklist Archived 8 May 2010 at the Wayback Machine euronews, world news, 21 October 2008
- ^ "A Progress Report on The Jurisdictions Surveyed by The OECD Global Forum in Implementing The Internationally Agreed Tax Standard" (PDF). OECD. 2 April 2009. p. 10.
- ^ Bangkok Post, 12 March 2010, p. B5
- ^ "A Progress Report on The Jurisdictions Surveyed by The OECD Global Forum in Implementing The Internationally Agreed Tax Standard" (PDF). 20 October 2009. Archived from the original (PDF) on 14 October 2009. Retrieved 5 November 2018.
- ^ Ibish, Hussein (20 October 2023). "The Reckoning That Is Coming for Qatar". The Atlantic. Retrieved 27 October 2023.
- ^ Crowell & Moring LLP - Michael J. Gunnison (13 June 2023). "FATF Releases 2023 Mutual Evaluation Report on Qatar". Lexology. Retrieved 17 June 2023.
- ^ Qatar's Links to Terrorism: The War of Narratives, Fair Observer, 21 October 2019.
- ^ Barrington, Lisa (4 March 2022). "Financial crime watchdog adds UAE to 'grey' money laundering watch list". Reuters. Retrieved 15 March 2022.
- ^ England, Andrew (4 March 2022). "Financial crimes watchdog puts UAE on 'grey list'". Financial Times. Archived from the original on 11 December 2022. Retrieved 15 March 2022.