The Paris-based Financial Action Task Force plans to issue a report today on money-laundering vulnerabilities and terrorist financing.
The FATF has been meeting since Tuesday, discussing developments in non-cooperative countries and territories.
The Bahamas was amongst many countries shamed into making reforms by blacklists introduced in 2000 by the FAFT and the Organisation for Economic Cooperation and Development.
One list names countries accused of not doing enough against money laundering while the another cites “harmful tax practices” said to bilk wealthier nations of billions of dollars through tax evasion.
The Bahamas was last month advised by the Financial Services Consultative Forum that more pressures are to come, and has this month to respond to the harmful tax haven initiative of the FATF/OECD.
“The pressure from the OECD is still very much alive and well. There is no question that they continue to press issues,” forum chairman attorney Brian Moree told a press conference in January.
He had also said that the forum would attempt to deliver its report, specifically on the Harmful Tax Practice Initiative by the OECD, in time for the February deadline.
In The Bahamas and across the region, laws guaranteeing banking secrecy have been replaced by pledges to cooperate in foreign investigations. More thorough identity checks are required, and cash deposits often are no longer accepted.
But critics say that confidentiality laws still can shield assets from lawsuits, and many countries have never had money-laundering prosecutions.
According to the Associated Press, reforms in Nevis could account for much of a 50-per-cent drop in new offshore businesses last year; hundreds of offshore banks have closed or had licenses revoked across the region.
Nevis is among islands still attractive to criminals, said David Marchant, the Miami-based publisher of the newsletter OffshoreAlert. He cites last year’s collapse of The Genesis Fund Ltd., which promised investors returns of up to 45 per cent and folded owing some US$50 million.
Caribbean leaders complain countries such as Switzerland and the United States aren’t held to the same standards, hence The Bahamas calling for a level playing field.
Efforts to control the industry have been strengthened since the Sept. 11 attacks, with laws including the USA Patriot Act, which prohibits U.S. banks from doing business with banks that have no physical presence.
At the end of the FATF Plenary meeting, the new report on international money laundering methods would be presented.
The report outlines current trends and emerging threats such as: terrorist financing schemes; money laundering vulnerabilities in the securities sector; and links between the diamond, gold and precious metals trade and money laundering and terrorist financing.
The FATF is an independent international body whose Secretariat is housed at the OECD. The twenty-nine member countries and governments of the FATF are: Argentina; Australia; Austria; Belgium; Brazil; Canada; Denmark; Finland; France; Germany; Greece; Hong Kong, China; Iceland; Ireland; Italy; Japan; Luxembourg; Mexico; the Kingdom of the Netherlands; New Zealand; Norway; Portugal; Singapore; Spain; Sweden; Switzerland; Turkey; United Kingdom and the United States.
Two international organisations are also members of the FATF: the European Commission and the Gulf Cooperation Council. South Africa and Russia are observer countries.
By Lindsay Thompson, The Nassau Guardian
