Combating Black Money: Money Laundering and Terrorism Finance, International Cooperation and the G8 Role

In the aftermath of September 11th, growing attention has been paid to the role of Non-Cooperative Countries and Territories (NCCT) in money laundering and terrorist financing. Policymakers concentrate their attention on the possibility that NCCT jurisdictions might facilitate the task of terrorists as well as criminal organizations (black money). Since 1989 the G7/G8 countries expressed the general commitment to define a strategy to combat black money (Table 1); on October 2001 the G7 Finance Ministers explicitly stressed the urgency to develop a process to identify jurisdictions that facilitate black money and to make recommendations for actions to achieve cooperation from such countries. Two interacting principles commonly feature in the debate on the relationship between money laundering and NCCTs: a) money laundering is facilitated by lax financial regulation; b) countries adopting lax financial regulation do not cooperate in the international effort aimed at combating money laundering. These two principles characterized the mandate of the Financial Action Task Force (FATF) for the prevention of money laundering. On the one hand, to address the