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FATF Praises 7 Offshore Centres For Anti-Money Laudering Measures But Sanctions Still Threaten

Jason Gorringe, Tax-news.com, Paris

09 October 2000

The Financial Action Task Force (FATF), the OECD agency bent on eradicating money laundering, met in Madrid last week and had good news for some of the 15 financial centres listed on its recent blacklist as having failed to co-operate in the global fight against money laundering. On Thursday the FATF announced that approximately half of the jurisdictions targeted for alleged deficiencies have made "significant progress" in improving banking oversight.


The FATF praised the "very encouraging" measures taken by seven jurisdictions. The FATF announcement means there could be light at the end of the tunnel for the Bahamas, the Cayman Islands, the Cook Islands, Liechtenstein, Panama, St Vincent and the Grenadines and Israel. The door may finally be opening to their removal from the now infamous blacklist. This objective is a priority among those included on the list, notably Panama and the Cayman Islands which both claimed their inclusion was unjust because of existing efforts to improve regulation of their banking systems. The FATF said that five other centres - Russia, Dominica, the Marshall Islands, the Philippines and St Kitts and Nevis - had made 'high-level political commitments or begun processes to change their laws and regulations.'

A progress report on "Non-Cooperative Countries and Territories" issued by the FATF read: 'The FATF today welcomed the significant, rapid progress made by many of the 15 jurisdictions....Since June, seven of the 15 non-cooperative countries or territories (NCCTs) have enacted legislation to address deficiencies identified by the FATF and several others have taken steps or made political commitments to do the same.'


However, the list will not be amended at this stage. The FATF will decide early next year whether the seven should be removed from the list. Failure to comply with FATF demands carries the threat of economic sanctions. Patrick Moulette, FATF executive secretary, said he was pleased by the seven centres' swift reaction. He said: 'The steps taken are very encouraging because in many instances the responses have been very rapid'. FATF president Jose Maria Roldan echoed his words: 'We are generally pleased with the positive steps taken by many jurisdictions named in June as non-cooperative. It remains, however, that premature to remove any from that list.'

The seven jurisdictions named by the FATF are making distinct inroads into shaking off their money laundering tags, demonstrated by the level of legislation which has come about since June this year. The FATF listed the achievements of these jurisdictions:

  • the Bahamas enacted the Money Laundering (Proceeds of Crime) (Amendment) Act 2000, the Evidence (Proceedings in other Jurisdictions) Act 2000 and the Evidence (Proceedings in other Jurisdictions) (Amendment) Act 2000, and has proposed other new or amended bills.
  • the Cayman Islands has issued money laundering regulations and enacted laws amending the Monetary Authority Law and the Proceeds of Criminal Conduct Law. Amendments have also been made to its Banks and Trust Companies Law and the Companies Management Law.
  • the Cook Islands enacted the Money Laundering Prevention Act.
  • Liechtenstein amended its Due Diligence Act and enacted a new law on Mutual Legal Assistance in Criminal Matters.
  • Panama enacted two laws addressing money laundering and has issued Executive Decrees to effect accompanying administrative changes.
  • St Vincent and the Grenadines enacted the International Banks (Amendment) Act 2000 and the Confidential Relationships Preservation (International Finance) (Amendment) Act 2000
  • Israel enacted the Prohibition of Money Laundering Law, 5760-2000


The FATF is due to review further jurisdictions during 2000-2001. The FATF is clear, however, that getting off its list of NCCTs is no mean feat. The FATF stated: 'the FATF Plenary must be satisfied that the jurisdiction has addressed the deficiencies previously identified. The FATF will rely on its collective judgement, and will attach particular importance to reforms in the area of criminal law, financial supervision, customer identification, suspicious activity reporting, and international co-operation. As necessary, legislation and regulations need to be enacted and have come into effect before removal from the list can be considered.'

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