Not so non-co-operative now

The name and shame tactics adopted by the Financial Action Task Force in its bid to force 15 non-co-operative countries and territories (NCCTs) to tighten up their anti-money laundering regimes appear to be working. That was the message of the progress report which FATF released on 5 October. Since it issued its blacklist in June, seven of the jurisdictions named have passed new laws to placate the organisation. However, none is to be removed from the list. Such a move would be “premature” said FATF President, José Maria Roldán. The organisation will monitor their progress over the coming months through review groups and face-to-face meetings. It says that it wants to see evidence of “comprehensive and effective anti-money laundering systems.” Any decision to remove an NCCT from the list will only be taken in the FATF Plenary once it has rectified all shortcomings that were identified in the June 2000 report. The organisation is seeking reforms in criminal law, financial supervision, customer identification, suspicious transaction reporting and international co-operation. It will expect to see tangible proof that regulatory controls have been tightened including suspicious activity reports, details of money laundering investigations and reviews of financial institutions’ procedures. It reiterates its warning that non-compliance would lead FATF members to contemplate the counter-measures identified in its February report. These include a requirement that financial institutions in FATF member states satisfy know your customer obligations when dealing with customers with accounts in NCCTs; insistence on specific reporting of transactions conducted with parties with accounts in financial institutions based in recalcitrant jurisdictions; and finally the option to “restrict, target or even prohibit” such dealings.