Richest Countries Poor in Anti Money Laundering : Reports
By Hom Nath Gaire
A
landmark report published last week by the Paris-based Organization for
Economic Co-operation and Development (OECD) found that the richest countries
in the world are failing to comply with Anti-Money Laundering and Counter Terrorist
Financing (AML/CTF) Regimes. The OECD
study entitled “Measuring OECD Responses to Illicit Financial Flows from
Developing Countries” was published just one week
after Global Financial Integrity (GFI), a US longtime authority on financial
crime, released its annual
update on illicit financial outflows from the
developing world. The study documented that the developed countries are highly
responsible for steady increase in illicit financial flows from developing countries,
most of which is being absorbed in the developed countries.
For a
long time, the traditional view in the developed countries was that illegal
capital flight, money laundering and terrorist financing were the problems only
for developing countries. Similarly, they used to say that the corrupt
governments and bureaucracy as well as poor business environments in the developing
countries led capital to flee to their markets and promote money laundering. Accordingly,
they were putting high pressure to developing countries like ours to obey all
the Financial Action Task Force’s (FATF) recommendations on AML-CTF. However, "one
of the most damning findings of the study is that 27 of the 34 OECD countries
are either “non compliant” or only “partially compliant” with the FATF recommendations,"
read the report. The report also shows that none of the OECD countries are
“fully compliant” with the standards on transparency of corporate ownership
information—which aims to tackle money laundering by anonymous shell companies.
The
study indicates that most of the developed countries, which have been receiving
the largest chunk of money that vanished from the developing countries, are in
rush to collect the illicit financial flows rather than help to restrain it. While
policymakers in developing countries bear some of the responsibility for this
problem, this is a two-way street. The chief economic advisor for Ministry
of Finance Dr. Chiranjibi Nepal accept the reality that the money drained from
poor countries like Nepal is being received by the developed countries. "The
high income countries have been absorbing the illicit financial flows in the
name of offshore financial system, secrecy jurisdictions and tax haven
lands," said Nepal, suggesting that the developing countries should raise
their voice collectively on FATF and other multilateral platforms.
According
to the Secretary at Office of the Prime Minister and Council of Ministers
Krishna Hari Baskota, although the degree of pressure and anomalies to the
developing countries in the name of ML/TF has been rising internationally, the
OECD countries underscore their voice. "However, Nepal is in a safe zone
now as per the criteria set by FATF," said Baskota adding that this is a
result of continuous efforts of Government of Nepal in policy formulation and
enforcement to contain ML/TF. He further argued that the latest study should
serve as a wake-up call to the world leaders regarding illicit financial flows
and ML/TF.
"Western
nations established an offshore financial system comprised of tax havens,
anonymous shell companies, and various trade-based money laundering techniques,
and they have not done enough to remedy this system to date," said Raymond
Baker President of GFI in a comment on the OECD report. According to Baker, Illicit
financial flows and money laundering are the most damaging economic problem
facing the global poor, and it’s growing at a terrifying pace. The FATF
recommendations on beneficial ownership are only a first step towards
eliminating the use of anonymous ‘phantom firms’ and effectively curtailing ML/TF.
But the shameful reality is that every OECD member fails to comply with even these weak standards on corporate ownership transparency—and most aren’t even
close, according to the report.
Comments
Post a Comment