Offshore hotspots on money laundering ‘grey’ list
A global intergovernmental watchdog, the Financial Action Task Force (FATF) has opted to retain the Cayman Islands and Panama on its updated “grey” list of jurisdictions under heightened scrutiny, according to an announcement from the group this month.
The FATF Gray List identifies jurisdictions that the unit says are actively working to “address strategic gaps” in their anti-money laundering, terrorist financing and proliferation financing regimes.
Despite the progress made by the two countries in the fight against financial crime, the FATF, based in Paris, France, included the Cayman Islands and Panama, both known for their offshore financial activities, on its list which included a total of 23 nations.
Countries on the list generally have more difficulty accessing international lending opportunities and may also be more restricted in exporting and importing goods to and from other countries.
The FATF said in its update this month that the Cayman Islands should “continue to work on the implementation of its action plan to address its strategic shortcomings” and was advised to continue and improve. impose adequate and effective sanctions against individuals and companies suspected of illicit financial activities.
In February last year, the Cayman Islands was added to the gray list due to a number of recommendations which the FATF said it had not followed.
The previous year it had been added to the European Union’s infamous ‘black’ list of money laundering jurisdictions, although it was later removed.
Similarly, Panama was added to the FATF gray list in June 2019. At the time, Panamanian financial leaders said they would commit to a number of measures to strengthen their fight against money laundering. Money Management (AML) and Counter Terrorism Financing (CFT) regimes.
However, the FATF expressed in its update that it has “serious concerns” that Panama has not yet succeeded in completing a jurisdictionally-established action plan to crack down on money laundering and corruption. other illicit financial activities in January last year.
“The FATF strongly urges Panama to quickly demonstrate meaningful progress in completing its action plan by June 2022, otherwise the FATF will consider next steps,” the task force said.
The next steps would be to ask the FATF to call on countries to apply enhanced due diligence measures when doing business with Panama, particularly in the financial sector.
The full list of countries currently on the gray list includes:
- Burkina Faso
- Cayman Islands
- south sudan
- United Arab Emirates
The March list also added the United Arab Emirates while Zimbabwe was dropped.
The FATF was founded in 1989 as part of an initiative developed by the G7 countries.