The intergovernmental group set out which jurisdictions have progressed in the fight against dirty money and which ones remain under scrutiny and need to raise their game.

Mauritius and Botswana are no longer on a “grey list” of jurisdictions subject to increased monitoring over their anti-money laundering, counter-terrorist financing and other illicit money flow issues, while the Cayman Islands and Malta remain on the list.

The Financial Action Task Force (FATF), an intergovernmental group fighting dirty money, late last week held its sixth plenary meeting since the onset of the pandemic – doing so via video links – to examine how well or not countries have fared in cleaning up financial systems and proving that they are tackling laundered money and other threats. 

In recent months a number of countries have been told they are subject to increased monitoring, a process which means that a country promises to rapidly spot problems and sort them out within an agreed timeframe, such as two years. The FATF said it has been flexible in imposing deadlines because of the disruption caused by COVID-19. 

The following countries had their progress since June 2021 reviewed by the FATF: Albania, Barbados, Botswana, Cambodia, the Cayman Islands, Jamaica, Malta, Mauritius, Morocco, Myanmar, Nicaragua, Pakistan, Panama, the Philippines, Senegal, Uganda, and Zimbabwe. These countries have “strategic deficiencies,” the FATF said.

Burkina Faso, Haiti, and South Sudan were given the opportunity and chose to defer reporting. 

Controversy over jurisdictions being used as places to hide money took another twist earlier in October when the Washington DC-based International Consortium of Investigate Journalists published a large data file “leaked” from a mass of centres around the world. Again, that story ignited debate on how to balance protecting legitimate financial privacy against foiling illicit money flows.

In the case of the Cayman Islands, the British Overseas Territory and registration hub for many hedge funds, and other entities, the FATF said: “In February 2021, the Cayman Islands made a high-level political commitment to work with the FATF and CFATF to strengthen the effectiveness of its AML/CFT regime.”

“The Cayman Islands should continue to work on implementing its action plan to address its strategic deficiencies, including by: (1) imposing adequate and effective sanctions in cases where relevant parties (including legal persons) do not file accurate, adequate and up-to-date beneficial ownership information in line with those requirements; and (2) demonstrating that they are prosecuting all types of money laundering cases in line with the jurisdiction’s risk profile and that such prosecutions are resulting in the application of dissuasive, effective, and proportionate sanctions,” it said.

Turning to Malta, a European member state roiled by domestic political controversies over governance, the FATF said: “In June 2021, Malta made a high-level political commitment to work with the FATF and MONEYVAL to strengthen the effectiveness of its AML/CFT regime.”

“Malta should continue to work on implementing its action plan to address its strategic deficiencies,” it said, listing out a range of tasks.

As for Panama, the Central American jurisdiction long known as an offshore financial centre, the group said: “In June 2019, Panama made a high-level political commitment to work with the FATF and GAFILAT to strengthen the effectiveness of its AML/CFT regime. Panama has taken steps towards improving its AML/CFT regime, including by applying risk-based supervision of the DNFBP sector and increasing parallel investigations into the predicate crime and money laundering offence.”

“However, Panama should take urgent action to fully address remaining measures in its action plan as all timelines have already expired. Panama should therefore continue to work on implementing its action plan to address its strategic deficiencies,” it said, listing a range of actions the jurisdiction must take.