The Financial Action Task Force on Money Laundering published its annual report today, outlining the main achievements of the FATF in 2000-2001, including the progress in work on non-cooperative countries and territories.

The FATF has decided to remove the Bahamas, the Cayman Islands, Liechtenstein and Panama from its list, but will monitor closely future developments in those countries. “We see that this initiative has triggered significant improvements in anti-money laundering systems throughout the world,” says FATF President, José María Roldán. But it has identified serious deficiencies in Egypt, Guatemala, Hungary, Indonesia, Myanmar and Nigeria.

The updated list of non-compliant countries and territories now includes: the Cook Islands, Dominica, Egypt, Guatemala, Hungary, Indonesia, Israel, Lebanon, the Marshall Islands, Myanmar, Nauru, Nigeria, Niue, the Philippines, Russia, St. Kitts and Nevis, and St. Vincent and the Grenadines. The FATF calls on its members to request their financial institutions to give special attention to businesses and transactions with persons, including companies and financial institutions, in these countries or territories.

The FATF has decided to recommend the application of additional countermeasures including the possibility of enhanced surveillance and reporting of financial transactions and other relevant actions as of September 30, against Nauru, the Philippines and Russia, unless their governments enact significant legislation which addresses money laundering
concerns.

Canada is the midst of updating its own anti-money laundering legislation, although the Investment Dealers Association recently came out against the pending new rules. In a report to its members, the IDA says, “The IDA is strongly encouraging its member firms to call on Ottawa to undertake an extensive rewrite of the proposed legislation and for the
subsequent proposal to be subject to a comment period.”

Its main objections to the new legislation are:
> it creates unnecessary duplication in identification procedures;
> it fails to recognize the anti-laundering legislation of foreign jurisdictions, also creating unnecessary duplication;
> it requires firms to determine whether foreign jurisdictions have equivalent anti-laundering regulations, and whether foreign firms are complying with them;
> it requires firms to verify the client1s identity with at least three people authorized to trade the account of a foreign financial institution “this serves no purpose in preventing money laundering”;
> it keeps a restrictive list of exemptions, the IDA would prefer to see all companies on all major global exchanges included in the exemptions;
> a general lack of clarity in legislation’s language.

The IDA says it has requested that its members communicate these concerns to the office of the Minister of Finance.