I've been posting a lot about FinCEN (the US Treasury's Financial Crimes Enforcement Network) following their Guidance on Emerging Payment Systems including virtual currencies (read Bitcoin). Today they put out their latest–this time teaming up with the Financial Action Task Force (FATF) to make sure poor people in select poor countries not following their dictates remain poor (I'm paraphrasing, but not by much).
The Financial Action Task Force (FATF) is the sister organization of the Organization for Economic Cooperation and Development (OECD). The OECD has a campaign to stamp out what it calls "harmful tax competition" and uses the FATF to financially strangle Non Complying Countries and Territories. It helps to understand what is going on in this context to think of of the OECD and FATF as a cartel of mostly rich, white, former colonial powers that take offense when their mostly poorer, darker-skinned former colonies get too uppity. I've written a lot about the FATF over the years here.
Which of the two groups' descriptions fits this list of countries? Afghanistan, Albania, Algeria, Angola, Antigua and Barbuda, Argentina, Bangladesh, Bolivia, Brunei Darussalam, Cambodia, Cuba, Kuwait, Kyrgyzstan, Mongolia, Morocco, Namibia, Nepal, Nicaragua, Philippines, Sri Lanka, Sudan, Thailand, Tajikistan, Zimbabwe. Yup. How about this list? Iran and Democratic People's Republic of Korea (DPRK), Ecuador, Ethiopia, Indonesia, Kenya, Myanmar, Nigeria, Pakistan, São Tomé and Príncipe, Syria, Tanzania, Turkey, Vietnam, and Yemen. Same?
Suppose you're a Bitcoin "money transmitter" and/or "Money Service Business" and think you're complying with all of FinCEN's registration and reporting requirements. Maybe, maybe not. Perhaps you're really just an agent of financial terrorism (in the eyes of the powers that be).
Here is the latest from FinCEN:
FinCEN Issues FATF-Related Advisories on AML/CFT Risks
Today, the Financial Crimes Enforcement Network (FinCEN) issued an advisory (FIN-2013-A004) to inform banks and other financial institutions operating in the United States of the risks of money laundering and financing of terrorism associated with jurisdictions identified by the Financial Action Task Force (FATF) on February 22, 2013 as having deficiencies in their anti-money laundering/counter-terrorist financing (AML/CFT) regimes and that (i) have not made sufficient progress in addressing these deficiencies or (ii) are subject to FATF's call for countermeasures. In addition, FinCEN issued a complementary advisory (FIN-2013-A003) that addresses a separate, but related, FATF document identifying jurisdictions with strategic AML/CFT deficiencies, for which each jurisdiction has provided a high-level political commitment to address.
· FIN-2013-A004 — Guidance to Financial Institutions Based on the Financial Action Task Force Public Statement on Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) Risks (http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-A004.pdf)
· FIN-2013-A003 — Guidance to Financial Institutions Based on the Financial Action Task Force Publication on Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) Risks posed by Afghanistan, Albania, Algeria, Angola, Antigua and Barbuda, Argentina, Bangladesh, Bolivia, Brunei Darussalam, Cambodia, Cuba, Kuwait, Kyrgyzstan, Mongolia, Morocco, Namibia, Nepal, Nicaragua, Philippines, Sri Lanka, Sudan, Thailand, Tajikistan, Zimbabwe, and the substantial AML/CFT improvements in Ghana and Venezuela (http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2013-A003.pdf)
Addendum: Let's keep in mind that non-official transfers are far more important to help the global poor than foreign aid is. As BBC reports, people sending money to family back home are hugely important for the recipient countries, "In 2010 – the most recent year for which meaningful comparisons can be made, according to [Hong Kong-based Ghanaian academic Adams Bodomo] – the African diaspora remitted $51.8bn (£34bn) to the continent." It continues, "Worldwide remittances from people who hail from developing countries totalled $350bn," he said; "far exceeding ODA at $130bn…In the case of Africa, about 75% of remittances are sent informally – we can't track that."
Obviously they're all financing terrorism not helping their struggling families. Just ask FinCEN and the FATF.
And as allAfrica.com reports, the Africans are working hard to comply with FATF dictates, "The first Gulf of Aden Counter-Terrorism Forum…called for countries in the region to tighten controls on the movement of money that can be used to fund terrorism, appealed to the international community to help dry up terrorism financing by refraining from paying ransom to terrorist groups, and called for work to begin on a convention to combat terrorism to be signed by all member states, to strengthen regional co-ordination and build up marine forces and customs units…The Forum also wants to see a joint military mechanism formed to co-ordinate efforts to combat terrorism, piracy, illegal immigration smuggling and human trafficking." In fact, one might say they are quite militant about it.