27 July 2001
To: Chief Executive of all authorized insurance institutions
carrying on long term business
Dear Sir/Madam,
Non-cooperative Countries and Territories
Further to our letter of 28 February 2001, we would like to update you on the progress of work of the Financial Action Task Force ("FATF") (Note 1) in respect of non-cooperative countries and territories ("NCCTs").
In June 2001, the FATF Plenary meeting reviewed the progress made by the 15 jurisdictions it had identified in June 2000 as NCCTs in the fight against money laundering and decided to remove four of these jurisdictions in recognition of their efforts to address deficiencies through the enactment of legal reforms. These jurisdictions are the Bahamas, the Cayman Islands, Liechtenstein, and Panama. Consequently, the application of Recommendation 21 of the Forty Recommendations (Note 2) has been withdrawn.
Following a review of another 13 jurisdictions, FATF identified serious deficiencies in the anti-money laundering regimes of six jurisdictions and added them on the NCCT List. These countries are Egypt, Guatemala, Hungary, Indonesia, Myanmar and Nigeria.
The revised list of the 17 NCCTs is now as follows :
- Cook Islands
- Israel
- Niue
- Dominica
- Lebanon
- Philippines
- Egypt
- Marshall Islands
- Russia
- Guatemala
- Myanmar
- St. Kitts and Nevis
- Hungary
- Nauru
- St. Vincent and the Grenadines
- Indonesia
- Nigeria
The FATF calls on its members to remind their financial institutions to give special attention to businesses and transactions, with persons, including companies and financial institutions, in these NCCTs. This is in line with Recommendation 21 of the Forty Recommendations which states that :
"Financial institutions should give special attention to business relations and transactions with persons, including companies and financial institutions, from countries which do not or insufficiently apply these Recommendations. Whenever these transactions have no apparent economic or visible lawful purpose, their background and purpose should, as far as possible, be examined, the findings established in writing, and be available to help supervisors, auditors and law enforcement agencies."
You are advised to comply with the above Recommendation by giving special attention to business relations and transactions with persons, including companies and financial institutions, from the above NCCTs. This is in addition to the requirements set out in the Guidance Note on Prevention of Money Laundering issued by the Insurance Authority.
In view of the inadequate progress made by Nauru, the Philippines and Russia to address the serious deficiencies in their anti-money laundering regimes, the FATF has also decided to recommend the application of additional countermeasures from 30 September 2001 in respect of these jurisdictions unless their governments enact significant legislation which addresses identified money laundering concerns. Details of the proposed countermeasures are set out in the attached copies of the Executive Summary of the June 2001 NCCTs Report and the related Press Release recently issued by the FATF.
The FATF will review the NCCT list from time to time. Advice of the changes will be provided by similar advisory in due course. Should you have any enquiries in this regard, please contact Mr. William Hsieh at 2867 4529.
Yours sincerely,
(Ros K. T. Lam)
Acting Commissioner of Insurance
(Note 1)
FATF is an inter-governmental body whose purpose is the development and promotion of policies, both at national and international levels, to combat money laundering. FATF currently consists of 29 jurisdictions and two international organizations: Argentina; Australia; Austria; Belgium; Brazil; Canada; Denmark; Finland; France; Germany: Greece; Hong Kong, China; Iceland; Ireland; Italy; Japan; Luxembourg; Mexico; the Kingdom of the Netherlands; New Zealand; Norway; Portugal; Singapore; Spain; Sweden; Switzerland; Turkey; the United Kingdom, the United States; the European Commission; and Gulf Cooperation Council.
(Note 2)
The Forty Recommendations were promulgated by the FATF as standards and international best practices in countering money laundering. All members of the FATF, including Hong Kong, China, are encouraged to adopt these measures to help combat money laundering.
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