Money laundering countries in a spin as they are told to clean up their act

Watch out, money laundering countries of the world. If you don't pass some laws and hire a few financial inspectors, the international community will slap you with opprobrium; you might even end up an NCCT.

NCCT? "Non-co-operative countries and territories" is the label given to financial centres that fail to meet the FATF's definition of probity.

FATF? Financial Action Task Force against money laundering.

Don't let the words "task force" fool you. They're not commandos but an international grouping of 29 member-states, housed at the OECD in Paris.

"We are a policy-making body, not law enforcers," Mr Jose Maria Roldan, the president of the task force stressed.

It issued its annual dishonours list yesterday.

Six new countries joined the money laundering club: Egypt, Guatemala, Hungary, Indonesia, Burma and Nigeria.

Still blacklisted are the Cook Islands, Dominica, Israel, Lebanon, Marshall Islands, Nauru, Niue, Philippines, Russia, St Kitts and Nevis and St Vincent and the Grenadines.

Being on the list is like wearing a bell or a flashing red light.

Task force member-states warn their financial institutions to scrutinise any dealings with you.

Most governments care enough to make an effort. Nigeria was the only country that did not participate in its own evaluation.

"We never received any response to our requests for meetings," Mr Patrick Moulette, the task force executive secretary said.

Three of the 17 non-co-operative countries performed so badly that the task force is threatening "the possibility of enhanced surveillance and reporting of financial transactions" unless their governments enact legislation against money laundering before September 30th.

The three threatened with this dire punishment are Nauru, the Philippines and Russia.

But the task force also has good students.

The Bahamas, the Cayman Islands, Liechtenstein and Panama have been "de-listed" since last year, after working hard to placate the economists in Paris.

Why have the Cayman Islands - forever associated in the Irish mind with the name Ansbacher - been cleared?

In just one year, the Caymans have amended, revised or enacted nine laws on customer identification, record-keeping and the power of the financial supervisory authority to monitor compliance.

Failure to report a suspicious transaction has become a crime in the Caribbean paradise, which has also committed men and money to a financial intelligence unit.

The holders of all accounts in the Caymans must be identified by the end of next year, and all banks licenced there must now maintain a physical presence.

Nor were those other places that pop up in Irish tribunals, the Channel Islands, ever seriously in danger of donning NCCT status.

"The Channel Islands were reviewed for the first time last year," Mr Moulette said.

"We did not find sufficient criteria to list them," he said.

"We did find problems typical of these islands, for example, the system of the `eligible introducer' whereby the banks are not obliged to identify clients who have already been identified by a third party such as a lawyer. But the FATF has no clear rule on this."

The most remarkable thing about the list was the countries not on it.

Not a single wealthy, developed, western country was condemned this year - perhaps because the task force does not consider tax evasion a form of money laundering.

Journalists asked why Switzerland and Luxembourg were not listed.

Switzerland appears to have been the destination for most of the estimated three billion French francs that went missing in France's Elf-Aquitaine scandal, as well as hundreds of millions of dollars in kickbacks on illegal arms sales in "Angolagate".

Luxembourg made headlines a week ago when several of France's most prominent bankers and businessmen were placed under investigation on suspicion of using a Luxembourg company to launder money.