FATF blacklist

The FATF blacklist or OECD blacklist was the common shorthand description for the Financial Action Task Force list of "Non-Cooperative Countries or Territories" (NCCTs) issued since 2000, which it perceived to be non-cooperative in the global fight against money laundering and terrorist financing.

History

The FATF blacklist or OECD blacklist has been issued by the Financial Action Task Force since 2000 and lists countries which it judges to be non-cooperative in the global fight against money laundering and terrorist financing, calling them "Non-Cooperative Countries or Territories" (NCCTs). 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.

The term "non-cooperative" was sometimes criticized 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. 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.

June 2000 report

The initial list of fifteen countries regarded as uncooperative in the fight against money laundering, was published in June 2000.[1] The list met criticism from professionals experienced in the offshore financial 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 cooperation on criminal law enforcement matters, and uncovered several serious cases of fraud and money laundering otherwise unknown to authorities in FATF member states." The list consisted of the following countries:[1]

  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

June 2001 report

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.  Myanmar
  7.  Nigeria
  8.  Ukraine

June 2006 report

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

  1.  Myanmar

June 2007 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.[4]

June 2008 report

FATF identified Uzbekistan, Iran, Pakistan, Turkmenistan and São Tomé and Principe, and the northern part of Cyprus as high risk and non-cooperative.[5]

June 2009 statement

FATF issued a "Public statement" on 25 February 2009 noting concerns and encouraging greater compliance by the following countries:[6]

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

February 2012 statement

A total of 23 countries were committed to, but had not yet implemented the FATF standard.[7]

Countries committed and addressing AML/CFT deficiencies

  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

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

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).[8]

High-risk and non-cooperative countries, to whom counter-measures applied:

  1.  Iran
  2.  North Korea

High-risk and non-cooperative countries, not committed to an action plan:

  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

June 2013

A total of 14 countries were identified as jurisdictions that have strategic deficiencies that pose a risk to the international financial system.[9]

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.

  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.

  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

October 2013 statement

A total of 13 countries were identified as jurisdictions that have strategic deficiencies that pose a risk to the international financial system.[10]

  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.

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

February 2014

A total of 11 countries were identified as jurisdictions with strategic deficiencies posing a risk to the international financial system.[11]

  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.

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

June 2014 statement

A total of 6 countries were identified as jurisdictions that have strategic deficiencies that pose a risk to the international financial system.[12]

  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.

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

October 2015 statement

The FATF statement issued on 23 October 2015 identified three high-risk and non-cooperative jurisdictions:[13]

Call to apply counter-measures:

  1.  Iran
  2.  North Korea

Jurisdictions with strategic deficiencies:

  1.  Myanmar

February 2016 statement

The FATF statement from 19 February 2016 dropped Panama from its gray list,[14] but there is still the OECD Myanmar from the list identifying two high-risk and non-cooperative jurisdictions:[15]

Call to apply counter-measures:

  1.  Iran
  2.  North Korea

OECD "gray list"

implementation of the internationally agreed tax standard as of 2011
  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 and has complemented the work carried out by the FATF.[16]

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.[17]

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.[18] 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.[19]

Global forum compliance

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).

See also

References

  1. 1 2 FATF Public Statement 22 February 2013: High-risk and non-cooperative jurisdictions
  2. ↑ Jeremy Hetherington-Gore (n.d.), The Cayman Islands – Paradise Regained? lowtaxnet.
  3. ↑ Error:- 404 - Financial Action Task Force (FATF) Archived 15 July 2006 at the Wayback Machine.
  4. 1 2 Error:- 404 - Financial Action Task Force (FATF)
  5. ↑ FATF Statement - 20 June 2008 Financial Action Task Force (FATF)
  6. ↑ FATF Statement concerning Iran, Uzbekistan, Turkmenistan, Pakistan and São Tomé and Príncipe - 26 June 2009 Financial Action Task Force (FATF)]
  7. ↑ Documents:- Improving Global AML/CFT Compliance: on-going process - 16 February 2012
  8. ↑ "FATF Public Statement - 16 February 2012". FATF. 16 February 2012. Retrieved 6 October 2014.
  9. ↑ "FATF Public Statement - 21 June 2013". FATF. 21 June 2013. Retrieved 6 October 2014.
  10. ↑ "FATF Public Statement - 18 October 2013". FATF. 18 October 2013. Retrieved 6 October 2014.
  11. ↑ "FATF Public Statement - 14 February 2014". FATF. 14 February 2014. Retrieved 6 October 2014.
  12. ↑ "FATF Public Statement - 27 June 2014". FATF. 27 June 2014. Retrieved 6 October 2014.
  13. ↑ "FATF Public Statement - 23 October 2015". Financial Action Task Force (FATF). Retrieved 20 November 2015.
  14. ↑ "Panama out of FATF gray list , but there is still the OECD". Panamá América S.A. 19 February 2016. Retrieved 8 May 2016.
  15. ↑ "FATF Public Statement - 19 February 2016". Financial Action Task Force (FATF). Retrieved 7 May 2016.
  16. ↑ Tax and crime - Organisation for Economic Co-operation and Development
  17. ↑ List of Unco-operative Tax Havens Organisation for Economic Co-operation and Development] n.d., retrieved 7 May 2016
  18. ↑ Calls from 17 countries for new tax haven blacklist euronews, world news, 21 October 2008
  19. ↑ "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. Retrieved 22 March 2011.
  20. ↑ Bangkok Post, 12 March 2010, p. B5
  21. ↑ A PROGRESS REPORT ON THE JURISDICTIONS SURVEYED BY THE OECD GLOBAL FORUM IN IMPLEMENTING THE INTERNATIONALLY AGREED TAX STANDARD, as of 2 November 2011
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