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Friday, 22 June, 2001, 17:11 GMT 18:11 UK
Sanctions threat for money laundering
Money laundry basket
Russia, the Philippines and the Pacific atoll of Nauru have been threatened with sanctions by an international task force that accuses them of failing to clamp down on money laundering.

Threatened with sanctions:
Nauru
Russia
Philippines

Source: FATF
The three nations were told by the Financial Action Task Force, part of the Organisation for Economic Cooperation and Development, that unless they clean up their acts and produce anti-monopoly legislation before September this year, they will take measures to make them.

The 26-nation task force, which was set up by the Group of Seven leading industrialised nations (G7), warned that failure to comply could lead to countermeasures including a financial surveillance clampdown.

The sanctions could also include warning international companies against dealing with the countries, the task force said.

And US and other banks may be required to collect detailed information before doing business with companies or individuals from the three countries.

Blacklist

The three countries were among 11 nations that for a second year running are on a blacklist of 'uncooperative jurisdictions' - places where the task force has identified serious weaknesses that make them attractive money laundering locations.

Money laundering newcomers:
Egypt
Guatemala
Hungary
Indonesia
Burma
Nigeria

Source: FATF
The task force published a revised blacklist on Friday.

Four countries were removed and six countries were added to the list.

The newcomers were Egypt, Guatemala, Hungary, Indonesia, Burma and Nigeria.

Also included were the Cook Islands, Dominica, Israel, Lebanon, the Marshall Islands, Niue, St Kitts and Nevis, and St Vincent and the Grenadines, as well as the the three countries now threatened with sanctions.

Global problem

Global money laundering accounts for huge flows of money.

It could be as much as $1,500bn a year of criminally acquired money that is made to appear legitimate, according to one estimate published by the Financial Action Task Force.

Even its lower estimate was as large as the annual output of the entire Spanish economy.

A year ago the task force published its first list of territories it described as uncooperative.

The four nations that were removed from the list were the Bahamas, the Cayman Islands, Liechtenstein and Panama.

These countries had made progress in the fight against money laundering over the past year, the task force said.

Previous Task Force reports have hinted obliquely at the possibility of withholding World Bank or International Monetary Fund loans.

But such a decision would have to be taken by the boards of those institutions and not by the Task Force.

 WATCH/LISTEN
 ON THIS STORY
The BBC's Andrew Walker in Paris
"Nigeria was particularly criticised for being unwilling or unable to co-operate with the investigation "
See also:

22 Jun 01 | Business
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23 Oct 00 | Business
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20 Jul 00 | Business
08 Jul 00 | Business
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