After 11th September 2001 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). However since 1989 the G7/G8 countries expressed the general commitment to define a strategy to combat black money. 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. This chapter takes a different perspective. We develop the assumption that lax financial regulation may be a strategic dependent variable for national lawmakers seeking to maximize the net benefits produced by any public policy choice. Therefore, given the structural features and endowments of their own countries, lawmakers may it find profitable to adopt financial regulations that attract capital of illicit origin (money laundering services) or destination (terrorism finance services), therefore choosing to be a NCCT jurisdiction.
Combating Black Money: International Cooperation and the G8's Role
MASCIANDARO, DONATO
2005
Abstract
After 11th September 2001 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). However since 1989 the G7/G8 countries expressed the general commitment to define a strategy to combat black money. 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. This chapter takes a different perspective. We develop the assumption that lax financial regulation may be a strategic dependent variable for national lawmakers seeking to maximize the net benefits produced by any public policy choice. Therefore, given the structural features and endowments of their own countries, lawmakers may it find profitable to adopt financial regulations that attract capital of illicit origin (money laundering services) or destination (terrorism finance services), therefore choosing to be a NCCT jurisdiction.
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