From Azerbaijan to Canada, Pakistan to Panama, U.S. names more than 80 ‘major laundering’ regions in latest INCSR report
Few corners of the real, virtual and criminal worlds are safe from the withering gaze of the U.S. State Department in its just-released 2019 International Narcotics Control Strategy Report (INCSR), an annual mammoth tome covering more than 500 pages grading country-wide counter-financial crime efforts and tracking where drugs are produced, sold and where illicit financial flows are gushing.
The report is broken down into two parts, one focusing on money laundering and AML compliance and the other, narcotics production, trafficking and related financial networks.
Both highlight the increasing diversity of criminals more aggressively using virtual worlds to sell drugs and move funds and the stubborn global bastion, and investigative stumbling block, of a broad range of illicit actors hiding behind anonymous ownership structures in opacity-opposed offshore secrecy havens.
Historically, however, the most controversial part of the report, and required reading for global financial institutions, is the yearly naming and shaming of countries on the “major money laundering jurisdictions” list, this time around covering some 80 countries.
While that seems a weighty and extensive list – and indeed it is – a major departure this year is that rather than new names getting added to the ranking, replete with the attendant vitriol, blustering and sputtering of said regions, the State Department actually dropped nearly a dozen jurisdictions in the latest go around.
In the 2019 list, the U.S. dropped Egypt, Cambodia, Guinea Bissau, the Kyrgyz Republic, Lebanon, Portugal, South Africa, Switzerland, Turkmenistan and Uruguay – a detail that should be woven in and weighed by compliance professionals in their regional fincrime and compliance capacity risk rankings.
But, not surprisingly, many large and powerful countries have remained on the list, much to their chagrin.
As such, the list is a hotly-debated, nigh rancorous ranking in financial crime circles as it paints with a very broad brush, mentioning Afghanistan and Iran in the same breath as Canada, the Netherlands, the United States and United Kingdom – one group considered roiling and rogue regimes and another often touted as global AML leaders.
In the latest INCSR, the status of financial crime compliance programs around the world continue to take up quite a bit of ink.
The terms “anti-money laundering,” “AML” and “compliance” appear nearly 800 times, a slight drop from 2018, where these terms appeared more than 840 times.
In tandem, and similar to the Paris-based Financial Action Task Force (FATF), which sets global AML standards, the latest INCSR gave more attention to the effectiveness of country financial crime investigations and AML laws, including detailing if the country crushed any large, complex international cases or levied any significant, dissuasive fines for FI compliance failures, (via the U.S. State Department).