The FATF Blacklist is the common shorthand description for the Financial Action Task Force list of "Non-Cooperative Countries or Territories" (NCCTs); that is, countries which it perceives to be non-cooperative in the global fight against money laundering and terrorist financing. Although non-appearance on the blacklist is 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 encompasses a large proportion of countries that do not operate as offshore financial centres.

The term non-cooperative is sometimes criticised as misleading, as a number of the countries which have appeared on the list from time to time appear, not because they deliberately propagate a culture which is perceived to assist money laundering, but because they simply lack the infrastructure or resources to cope with relatively sophisticated financial criminals who try to operate there.

The first report

The plenary list was published in June 2000,[320287] and fifteen countries initially appeared on the list as being regarded as uncooperative in the fight against money laundering:

1. Bahamas
2. The 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. Russia
14. Saint Kitts and Nevis
15. Saint Vincent and the Grenadines

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

The second report

In the second report, in 2001 (including a supplemental report in September) a further eight countries were designated as non-cooperative:

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

The FATF produces annual reports, designated countries that go onto and come off the list.[320288] The general trend has been towards countries coming off the list, as there is an obvious incentive for countries to tighten up areas criticised in the FATF reports as not meeting the required international standards. To date, 21 countries have been de-listed, and only 8 countries have been added since the additional list (interestingly, none of which were offshore jurisdictions).

The seventh report

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

1. Myanmar

The eighth report

The following countries were listed as uncooperative tax havens by the OECD in their 2009 report.

1. Myanmar
2. Nauru
3. Nigeria

The current state of the list: 3 European countries

As of August 2007, the OECD has blacklisted Andorra, Liechtenstein and Monaco.

On 22 October 2008 at an OECD meeting in Paris, 17 countries led by France and Germany have decided to draw up a new blacklist of tax havens. The OECD has been asked to investigate around 40 new tax havens in the world where undeclared revenue is hidden and which host many of the non-regulated hedge funds that have come under fire during the 2008 financial crisis.

Germany, France and other countries called on the Organization for Economic Cooperation and Development (OECD) to specifically add Switzerland to a blacklist of countries which encourage tax fraud.

"Counter measures"

Where the FATF feels that a country is not making sufficient to improve its regulation it may recommend "counter measures" against such countries. To date it has only done so against three countries: Myanmar, Nauru and Ukraine. However, counter measures have been withdrawn from all three, and as at July 2006 there are no counter measures in effect against any country.

See also

• Anti-money laundering
• Financial Action Task Force on Money Laundering
• Money laundering
• Offshore Financial Centre

External links

• Current FATF "Non-Cooperative Countries and Territories"
• FATF's NCCT Timeline
• FATF's "Press related to Non-Cooperative Countries and Territories Initiative (NCCT)"
• FATF's "NCCTs FAQ"
• G7 warns dirty money states (BBC Article)
• Financial Action Task Force ("FATF") on Money Laundering World Compliance is a privately-held software company selling tools to combat money laundering

References

1. Jeremy Hetherington-Gore (n.d.), The Cayman Islands - Paradise Regained?.
2. [1]
3. http://news.bbc.co.uk/2/hi/business/7980848.stm