FATF blacklist

The FATF blacklist (officially known as the "Call for action"),^[1] is the common shorthand description for the Financial Action Task Force (FATF) list of "Non-Cooperative Countries or Territories" (NCCTs).^[2][3] The FATF 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]

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 21 February 2020, only two countries were on the FATF blacklist: North Korea and Iran

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.^[6]

History

FATF was established by the G7 summit that was held in Paris in 1988. Founding stakeholders include the G-7 Heads of State or Government, President of the European Commission and eight other countries.^[7]

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. 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

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."^[8]

Member nations

Full members

According to its official website, there are 38 members of FATF, representing most financial centers around the world.^[9] The list consisted of the following countries:^[10]

1.  Argentina
2.  Australia
3.  Austria
4.  Belgium
5.  Brazil
6.  Canada
7.  China
8.  Denmark
9.  EU
10.  Finland
11.  France
12.  Germany
13.  Greece
14. Template:Country data Gulf Cooperation Council
15.  Hong Kong
16.  Iceland
17.  India
18.  Ireland
19.  Israel
20.  Italy
21.  Japan
22.  South Korea
23.  Luxembourg
24.  Malaysia
25.  Mexico
26.  Netherlands
27.  New Zealand
28.  Norway
29.  Portugal
30.  Russian Federation
31.  Saudi Arabia
32.  Singapore
33.  South Africa
34.  Spain
35.  Sweden
36.   Switzerland
37.  United Kingdom
38.  United States

Observer nations

There is currently one FATF observer.^[11]

1.  Indonesia^[12]

FATF Blacklisting reports

The Blacklist is a term used by the media, which is officially called as "Call for action" nations by the FATF.

June 2000 report

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]

1.  Bahamas
2.  Cayman Islands
3.  Cook Islands
4.  Israel
5.  Lebanon
6.  United States of America
7.  Marshall Islands
8.  Nauru
9.  Niue
10.  Panama
11.  Philippines
12.  Russian Federation
13.  Saint Kitts and Nevis
14.  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 2002 report

According to June 2002 report from FATF, following countries were listed as NCCTs.^[14]

1.  Dominica
2.  Egypt
3.  Grenada
4.  Guatemala
5.  Indonesia
6.  Marshall Islands
7.  Myanmar
8.  Nauru
9.  Nigeria
10.  Niue
11.  Philippines
12.  St. Vincent and the Grenadines
13.  Ukraine

June 2003 report

According to June 2003 report from FATF, the following countries were listed as NCCTs.^[15]

1.  Cook Islands
2.  Egypt
3.  Guatemala
4.  Indonesia
5.  Myanmar
6.  Nauru
7.  Nigeria
8.  Philippines
9.  Ukraine

July 2004 report

According to July 2005 report form FATF, the following countries were listed as NCCTs.^[16]

1.  Cook Islands
2.  Indonesia
3.  Myanmar
4.  Nauru
5.  Nigeria
6.  Philippines

June 2005 Report

According to June 2005 report from FATF, the following were listed as NCCTs.^[17]

1.  Myanmar
2.  Nauru
3.  Nigeria

June 2006 report

The seventh list, published in June 2006,^[18] 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.^[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

FATF identified Uzbekistan, Iran, Pakistan, Turkmenistan, and São Tomé and Príncipe, and the northern part of Cyprus as high risk and non-cooperative.^[20]

June 2009 statement

FATF issued a "public statement" on 25 February 2009 noting concerns and encouraging greater compliance by the following countries:^[21]

1.  Turkmenistan
2.  Uzbekistan
3.  São Tomé and Príncipe

October 2010 Statement

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]

1.  North Korea

October 2011 Statement

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]

1.  Cuba
2.  Bolivia
3.  Ethiopia
4.  Kenya
5.  Myanmar
6.  Nigeria
7.  Sao Tome and Principe
8.  Sri Lanka
9.  Syria
10.  Turkey

February 2012 statement

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:

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.  Israel
10.  São Tomé and Príncipe
11.  Sri Lanka
12.  Syria
13.  Tanzania
14.  Thailand

June 2013

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.

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.  São Tomé and Príncipe
7.  Syria
8.  Tanzania
9.  Turkey
10.  Vietnam
11.  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.^[26]

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.  Tanzania
8.  Turkey
9.  Yemen

February 2014

A total of 11 countries were identified as jurisdictions with strategic deficiencies posing a risk to the international financial system.^[27]

1.  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.  Syria
7.  Israel
8.  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.^[28]

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

February 2015 statement

The FATF identified following countries which have made significant progress in improving its AML/CFT regime and noted that these countries have established the legal and regulatory framework to meet its commitments in its action plan regarding the strategic deficiencies that the FATF had identified. The following countries are therefore no longer subject to the FATF's monitoring process under its on-going global AML/CFT compliance process.^[29]

1.  Cambodia
2.  Kuwait
3.  Namibia
4.  Nicaragua
5.  Zimbabwe

October 2015 statement

The FATF statement issued on 23 October 2015 identified three high-risk and non-cooperative jurisdictions:^[30]

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,^[31] but there is still the OECD Myanmar from the list identifying two high-risk and non-cooperative jurisdictions:^[32]

Call to apply counter-measures:

1.  North Korea

February 2017 Statement

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."^[33]

Current FATF lists

Current FATF blacklist

As of 2 March 2021, the following countries are on this list:^[1]

Blacklisted Cl
North Korea
Iran

Current FATF greylist

As of 18 June 2022, the following 20 countries/territories are on this list:^{[1][34][35][36][37]}

Greylisted Cl
Albania
Barbados
Burkina Faso
Cambodia
Cayman Islands
Haiti
Jamaica
Jordan
Mali
Morocco
Myanmar (Burma)
Nicaragua
Pakistan
Panama
Philippines
Senegal
South Sudan
Syria
Turkey
United Arab Emirates
Yemen

FATF review meeting

The FATF Plenary, the making body, meets three times a year around February, June and October.^[38][39] The last review meeting took place between 20 and 25 June 2021 in Paris.^[34]

• 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 following the completion of its action plan and a successful on-site visit by assessors.
• New jurisdictions that have been added to the grey list include Haiti, Malta, the Philippines and South Sudan.^[34][35][36]
• In March 2022, the United Arab Emirates was added to the grey list, while Zimbabwe was removed from the list.^[40][41]

Other similar lists

OECD "grey list"

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.^[42]

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.^[43]

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.^[44] 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.^[45]

• 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,^[46] 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 , 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.^[47]

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).^{[citation needed]}

Other nations regularly accused of terror financing

Muslim nations such as Bahrain, Qatar, Egypt, Saudi Arabia and the UAE have been also been regularly accused of doing very little to prevent the flow of funds for terror financing in other nations. Bahrain accepts Muslim Brotherhood affiliate Minbar as n legitimate political player. Qatar directly interacts with militants by financing the "United States designated terrorist organisation" Hamas and by allowing several "designated terrorist" units of the Taliban to maintain their offices in Qatar. Saudi Arabia also collaborates with the Muslim Brotherhood affiliate al-Islah in Yemen. Saudi Arabia and the UAE are pointed out as 'hypocrites', as they too face accusations of not doing enough to stop terror financing, and both nations have links to terrorist organisations in Western Asia.^[48] In March 2022, the Financial Action Task Force (FATF) listed the UAE on a list of jurisdictions subject to increased monitoring, known as its 'grey' list, as the country has been considered non-cooperative in the global fight against money laundering and terror financing.^[49][50]

See also

• Asia/Pacific Group on Money Laundering
• Hawala
• Informal value transfer system
• Remittance
• Riba
• Offshore financial centre
• Terrorism financing

References

External links

• FATF "Non-Cooperative Countries and Territories"
• Annual Non-Cooperative Countries and Territories Initiative (NCCT) Reports
• FATF's "NCCTs FAQ"
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