“Name and Shame� Can Work for Money Laundering

OECD Observer
October 19, 2000

A June decision to name 15 territories as failing to cooperate with international efforts to combat money laundering, and a warning that they faced possible counter-measures if they did not improve, may already be showing results.

Seven of the 15 jurisdictions deemed to have ¨serious systemic problems¨ in their anti-money laundering regime have since enacted legislation aimed at addressing problems identified by the Financial Action Task Force on money laundering (FATF). Five more are either already working on legislation or have pledged to do so. The FATF welcomed this "significant, rapid progress" but said it would be ¨premature¨ to take anyone off the non-cooperative list immediately. Legislation will have to come into effect and the FATF will ensure that it is being implemented before removal from the list can be considered. Any decision to remove jurisdictions from the list would have to be made by a plenary session of the FATF.

The seven jurisdictions that have already enacted legislation are: the Bahamas, the Cayman Islands, the Cook Islands, Israel, Liechtenstein, Panama and St. Vincent & the Grenadines. Dominica, the Marshall Islands, the Philippines, Russia and St. Kitts & Nevis have made a high-level political commitment or have begun processes to change laws and regulations. The other three jurisdictions named as non-cooperative in the June report were Lebanon, Nauru and Niue.

In reporting on progress to date on October 5, the FATF urged these jurisdictions which had not yet made any response to revise their laws and create an anti-money laundering regime that complies with international standards. And it reiterated the June warning that if they failed to do so, ¨FATF members would consider the adoption of counter-measures.¨ These were outlined in February by the FATF and included measures such as obligatory reporting of transactions with financial institutions in non-cooperative territories or even banning transactions with such territories.

The FATF is continuing to monitor weaknesses in the global fight against money laundering and will be reviewing other jurisdictions in the coming year.

*The 31-member FATF is an independent international body whose secretariat is housed at the OECD.

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