The Financial Action Task Force blacklist (often abbreviated to FATF blacklist, and officially known as the "Call for action"),[1] is a blacklist maintained by the Financial Action Task Force.[2] [3]
The 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.
The 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 November 2022, only three countries were on the FATF blacklist: North Korea, Iran, and Myanmar.[6]
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.[7]
The FATF was established by the G7 summit that was held in Paris in July 1989. Founding stakeholders include the G-7 Heads of State or Government, President of the European Commission and eight other countries.[8]
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]
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."[9]
According to its official website, there are 39 members of FATF (earlier 40 members, Russia being removed from the list in Feb 2023) and two Regional Organisations (European Union and Gulf Cooperation Council), representing most financial centers around the world.[10] The list consisted of the following countries:[11]
Argentina
Australia
Austria
Belgium
Brazil
Canada
China
Denmark
France
Germany
Greece
Iceland
India
Indonesia
Ireland
Israel
Italy
Japan
Malaysia
Mexico
Netherlands
New Zealand
Norway
Portugal
Saudi Arabia
Singapore
South Africa
Spain
Sweden
Switzerland
Turkey
United Kingdom
United StatesThere is currently one FATF observer.[12]
The Blacklist is a term used by the media, which is officially called as "Call for action" nations by the FATF.
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:
Bahamas
Cayman Islands
Cook Islands Israel
Lebanon
Marshall Islands
Nauru
Niue
Panama
Philippines
Russian Federation
Saint Kitts and Nevis
Saint Vincent and the GrenadinesThe second FATF report, published in 2001 and including a supplemental report in September, denoted a further eight countries as non-cooperative:
According to June 2002 report from FATF, following countries were listed as NCCTs.[14]
According to June 2003 report from FATF, the following countries were listed as NCCTs.[15]
According to the July 2004 report form FATF, the following countries were listed as NCCTs.[16]
According to June 2005 report from FATF, the following were listed as NCCTs.[17]
The seventh list, published in June 2006,[18] listed only the following country as non-cooperative:
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]
FATF's Ninth Review identified the following countries as high risk and non-cooperative.[20]
FATF issued a "public statement" on 25 February 2009 noting concerns and encouraging greater compliance by the following countries:[21]
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]
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]
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:
High-risk and non-cooperative countries, not committed to an action plan:
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.
Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan.
A total of 13 countries were identified as jurisdictions that have strategic deficiencies that pose a risk to the international financial system.[26]
Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan.
A total of 11 countries were identified as jurisdictions with strategic deficiencies posing a risk to the international financial system.[27]
Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan.
A total of 6 countries were identified as jurisdictions that have strategic deficiencies that pose a risk to the international financial system.[28]
Jurisdictions with strategic AML/CFT deficiencies that have not made sufficient progress in addressing the deficiencies or have not committed to an action plan.
Jurisdictions subject to a FATF call on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/FT) risks emanating from the jurisdictions.[29]
Jurisdictions with strategic AML/CFT deficiencies that 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. The FATF calls on its members to consider the risks arising from the deficiencies associated with each jurisdiction, as described below.
The FATF statement issued on 23 October 2015 identified three high-risk and non-cooperative jurisdictions:[30]
Call to apply counter-measures:
Jurisdictions with strategic deficiencies:
Jurisdictions subject to a FATF call on its members and other jurisdictions to apply counter-measures to protect the international financial system from the on-going and substantial money laundering and terrorist financing (ML/FT) risks emanating from the jurisdictions.,[31]
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."[32]
As of 28 June 2024, the following countries were on this list:[33]
As of 28 June 2024, the following 21 countries/territories were on this list:[33]
Bulgaria
Burkina Faso
Cameroon
Croatia
Kenya
Mali
Monaco[34]
Mozambique
Namibia
Nigeria Philippines
Senegal South Africa
YemenThe FATF Plenary, the making body, meets three times a year around February, June and October.[36] [37] The last review meeting took place between 20 and 25 June 2021 in Paris.[38]
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.[45]
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.[46]
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.[47] 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.[48]
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).
See also: Terrorism financing.
Qatar continues to finance Hamas, a militant group designated as a terrorist organization by the US; allows the Taliban to maintain offices in Qatar, and is the largest state-ally of the Muslim Brotherhood.[51] However, a June 2023 FATF report, claimed that Qatar has shown a government-wide effort to address ML/TF risks and to implement an effective targeted financial sanctions (TFS) regime. The report cited an updated AML/CFT law providing law enforcement with tools and improves inter-agency coordination in Qatar; the establishment of the Qatar Financial Centre (QFC) tasked with supervision with an AML/CFT supervisory team at the QFC Regulatory Authority; and a 2019 law on combating terrorism financing.[52]
Nations such as Bahrain, Egypt, Saudi Arabia, and the UAE have also been accused of doing very little to prevent the flow of funds for terror financing in other nations. Bahrain accepts Muslim Brotherhood-affiliate Minbar as a legitimate political player, and Saudi Arabia collaborates with the Muslim Brotherhood-affiliate al-Islah in Yemen. Saudi Arabia and the UAE have been accused of hypocrisy in the 2017 Qatar diplomatic crisis, as they too face accusations of not doing enough to stop terror financing, and both nations have links to terrorist organisations in the Middle East.[53] In March 2022, the FATF added the UAE to its grey list of jurisdictions subject to increased monitoring, as it claims that the country is non-cooperative in the global fight against money laundering and terror financing.[54] [55]
Finland
Hong Kong
Luxembourg
Egypt
Grenada
Guatemala
Hungary
Myanmar
Ukraine
Dominica
Uzbekistan
Pakistan
Turkmenistan
Cuba
Ethiopia
Sao Tome and Principe
Sri Lanka
Ghana
Thailand
Ecuador
Algeria
Haiti