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Caribbean Bank Head Says "Real" Money Laundering Elsewhere

Lisa Ugur, Tax-news.com, London

16 November 2000


It may be six months since the Financial Action Task Force (FATF) released its now infamous list of 15 nations deemed to have inadequate defences against money laundering, but for many of the countries named, the list still rankles. Taken together with the OECD's harmful tax initiative which "named and shamed" a whole host of countries for supposedly possessing "unfair" tax regimes, the list has caused smaller jurisdictions in particular to fear for their economic lives.

Addressing a group of bankers in Trinidad last week, the head of the Caribbean Development Bank, Sir Neville Nichols, said that the FATF blacklist incorrectly suggests that most money laundering takes place in the Caribbean. He noted that larger countries have been involved in recent scandals.

Caribbean nations accounted for a third of the 15 countries on the FATF list. The Bahamas, the Cayman Islands, Dominica, St Kitts and Nevis and St Vincent and the Grenadines were all named as "non-cooperative" jurisdictions in the international fight against money laundering.

Sir Neville Nichols said: 'Nothing could be further from the truth. I am not saying that some degree of money laundering does not take place in the Caribbean; it's virtually impossible in this electronic age to prevent it.' He pointed specifically to this year's scandal over the late Nigerian dictator Sani Abacha, who stashed vast sums of suspect money in banks across Europe, including Switzerland.

Although the FATF last month praised seven offshore centres for progress made on anti-money laundering measures - the Bahamas, Caymans and St Vincent and the Grenadines among them - there are no signs of an impending removal from the list. Sanctions still threaten and the Caribbean nations are still perturbed about the long-term effects of the FATF initiative.

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