Antecedentes Teóricos

This NCCT initiative encountered varying degrees of resistance from the very beginning.

Blacklisted jurisdictions opposed the idea for obvious reasons, but the most formidable opposition came from the International Monetary Fund (IMF) who felt strongly opposed to the coercive force the blacklisting model brought about. The IMF had on its own in the year 2001 also initiated efforts in the area of AML and it saw the NCCT list as a complete variant to the IMF‘s more cooperative working methods. As such, several IMF board members especially those from developing countries strongly opposed blacklisting because there was a feeling that the FATF was punishing poor states while letting its rich members off the hook. For example, a representative of Antigua, who was also the deputy chair of the Caribbean Financial Action Task Force stated that the FATF was ‗‗the creation of a handful of rich nations, ‘and declared it unacceptable ‗‘that a handful of states, however powerful, should usurp the right to dictate standards to the rest of the world under the threat or imposition of sanctions.‘‘341

The Government of St Kitts and Nevis when blacklisted by the FATF in June 2000 described the initiative as a ‗‗sinister plot‘ which it

would oppose.‘‘342 There were concerns about the legitimacy or otherwise of the blacklisting

339

Isle of Man Financial Supervision Commission Annual Report 2000-2001

340

See Sharman, J.C. (2009), ‗The Bark is the Bite: International Organizations and Blacklisting,‘

Review of International Political Economy, vol. 16, no. 4, pp. 573-596.

341

See Hülsse, R. (2008), ‗Even clubs can't do without legitimacy: Why the anti-money laundering Blacklist was suspended,‘‘ Regulation and Governance, vol. 2, no. 4, pp. 459-479.

342

technique because arguments were advanced that the blacklist violated international norms and the AML regime‘s own principles which holds that participation is voluntary and

recommendations non-binding.343 Similarly, the politicised practice of blacklisting was viewed as contradictory to the technocratic and apolitical character of the FATF as an expert body.344 The NCCT list and in particular the imposition of economic sanctions on non-cooperative countries was regarded as a breach of the sovereignty norm.345 The Cook Islands for instance, categorically stated through its Prime Minister in 2001 that the Island would refuse to cave into multilateral initiatives that ‗‗infringed its sovereign right to develop and implement policies.‘‘346 Likewise, there were reservations on the part of some developing countries as to the real motives behind the blacklisting technique. Such countries viewed the blacklist with suspicion and felt there was a hidden agenda on the part of the FATF. The Caribbean countries in particular, accused the FATF countries of using money laundering as a pretext for fighting tax havens, and more generally for protecting their own financial centres from the competitive pressures from the offshore

countries.347 The seeming lack of transparency with the procedures of the NCCT process was also another issue where aggrieved countries felt the legitimacy of the blacklist was to be called into question. There was also a perception that the FATF applied double standards; only non-FATF

of Money Laundering Control , 4 (3): 211-20 343

Doyle T (2002) ‗Cleaning Up Anti-Money Laundering Strategies: Current FATF Tactics Needlessly Violate International Law,‘ Houston Journal of International Law 24(2): 344

Sharman JC (2004) ‗‘International Organisations, Blacklisting and Tax Haven Regulation,‘‘ (Paper presented at European Consortium of Political Research Joint Sessions), Uppsala, April 13–18.

345

See Hülsse, R. (2008), ‗Even clubs can't do without legitimacy: Why the anti-money laundering Blacklist was suspended,‘ Regulation and Governance, vol. 2, no. 4, pp. 459-479.

346

Johnson, Jackie (2001) ‗Blacklisting: Initial Responses, Reactions and Repercussions,‘ Journal of Money Laundering Control 4 (3): 211-20

347

See Hülsse, R. (2008), ‗Even clubs can't do without legitimacy: Why the anti-money laundering Blacklist was suspended,‘‘Regulation and Governance, vol. 2, no. 4, pp. 459-479.

members ran the risk of being blacklisted despite the fact that a number of FATF members also fell short of a full implementation of the FATF recommendations.348

The International Monetary Fund (IMF) weighed in on the FATF regarding the blacklisting policy, with the FATF finally agreeing to suspend the policy in the year 2002. Blacklisting by the FATF according to the IMF damaged reputations because it reverberated at each level and threatened the free flow of new investment, and generally caused a decline in Government revenue and general economic activity. The importance of reputation to jurisdictions was reflected in an IMF report which stated that ‗‘most likely, the major competitive factor in the current international

environment is a country‘s established reputation.349

The Cook Island for instance initially defied the blacklist because it miscalculated costs of resistance compared to cost of reform. Experience would later reveal this mistake as the country‘s reputation was tarnished due to the initial listing, followed by the knock-on blacklisting by governments and firms, and reputational damage began to translate into material damage.350 St Kitts and Nevis on its part felt it could afford to ride out the OECD and FATF campaigns, rather than suffer the direct and indirect costs reform demanded. However, the emerging glare of the economic damage caused by blacklisting compelled the

Government to comply as it revealed that compliance was indeed the cheaper option.351 In the case of Nigeria, being an economy heavily reliant on International trade and with reputation sacrosanct to the sustainability of the country‘s economy, the blacklist forced it to act pre-emptively to avoid the damage that comes with a tainted reputation. This eventually led to Nigeria being de-listed and

348

Reuter P, Truman E.M (2004) Chasing Dirty Money: Progress on Anti-Money Laundering. Institute for International Economics, Washington, DC.

349

IMF 2002; 18

350

See Sharman, J.C. (2009), ‗The Bark is the Bite: International Organizations and Blacklisting,‘

Review of International Political Economy, vol. 16, no. 4, pp. 573-596. 351

subsequently declared fully compliant and safe to international business dealings. The FATF‘s desire to cooperate more closely with International Financial Institutions (IFIs) paved the way for the IMF to successfully persuade the FATF to abandon the blacklisting method of coercion. The IFIs strongly opposed the NCCT practice and the IMF viewed it as being against the nature of the fund.352 There was thus a clash of philosophies between confrontation and coercion on the one side, and consensus and voluntarism on the other.353 In November 2002, the FATF and the IMF reached an agreement whereby the FATF agreed not to undertake another round of NCCT initiative for at least another 12 months. The International Financial Institutions effectively made the end of the blacklist technique a precondition for their engagement and the FATF obliged. The blacklist was abandoned altogether in the year 2006. A range of other reasons have been advanced as to why the FATF gave the blacklisting stance up. There are arguments that it was an effect of a policy shift in the United States of America.354 Another explanation holds that the suspension was necessitated by administrative reasons because the FATF secretariat given its small size and budget was unable to cope with additional workload that came with the NCCT practice.355 There is also the perception that the blacklist was called off because it had achieved its goal since all the countries on the list had implemented AML Regulations, theoretically at least.This particular argument has however been derided as weak because the suspension of the NCCT list truncated an ongoing and unfinished

352

See Sharman, J.C. (2006), Havens in a Storm: The Struggle for Global Tax Regulation, 1st Edition, Cornell University Press, Ithaca

353

See Hülsse, R. (2008), ‗Even clubs can't do without legitimacy: Why the anti-money laundering Blacklist was suspended,‘ Regulation and Governance, vol. 2, no. 4, pp. 459-479.

354

Wechsler W.F, ‗‘Follow the Money,‘‘ Foreign Affairs (Magazine Published by the Council on Foreign Relations) Volume 80, Number 4 (July/August 2001) 40–57

<https://www.foreignaffairs.com/issues/2001/80/4 > Accessed July 2016 355

See Sharman, J.C. (2006), Havens in a Storm: The Struggle for Global Tax Regulation, 1st Edition, Cornell University Press, Ithaca

process.356 At the time, the FATF had only assessed a total of 47 countries, and the perception is that it was quite certain that some others would potentially have shown up on the blacklist.357

5.3 The Application of the International AML Standards within Nigeria‘s Socio-Political and Legal