Finance minister of the seven giant industrialized nations (G7) have threatened to sanction Israel and other 14 countries, including Lebanon, for money laundering, reported The Jerusalem Post newspaper.
The G7 finance ministers met in Palermo, Italy, this weekend and discussed sanctioning the states suspected of being money laundering centers if they refuse to carry out reforms to financial rules and regulations, said the paper.
Possible sanctions the G7 countries could impose include making mandatory disclosure requirements by banks and other financial institutions in the Financial Action Task Force (FATF) countries for any transactions involving institutions in the blacklisted countries.
That would lead to an outright ban on any financial dealings with a delinquent country or territory.
These potential measures will be discussed at a meeting of the FATF from June 20-22, said the paper.
In June last year, the G7, comprising the US, Japan, Germany, France, Britain, Italy, and Canada, made similar tough statements, which helped motivate Israel's efforts to fight money laundering.
Since then, Israel has set up a Jerusalem-based authority to help enforce the Money Laundering Law passed by the Knesset in August 2000, said the Post.
According to the paper, it is unclear whether the G7 will take into account Israel's current political turmoil when evaluating the country's efforts at fighting money laundering.
The other countries and territories on the FATF blacklist are the Bahamas, the Cayman Islands, Panama, Dominica, St. Kitts and Nevis, St. Vincent and the Grenadines, the Cook Islands, the Marshall Islands, Nuie, the Philippines, Russia, Liechtenstein, and Lebanon.
Money laundering is a highly sensitive issue in Lebanon, a country where banking secrecy has existed since 1956 and where total bank deposits of about $36 billion are more than twice the estimated GDP, said the Daily Star newspaper on Monday.
“Talk of dirty money raises fears that major Western nations might cut some financial ties with Lebanon or force the country to remove its banking secrecy laws,” an official told the paper.
Lebanon’s inclusion on the FATF black list prompted the Central Bank, the Banking Control Commission, the Association of Banks in Lebanon, and the finance ministry to hammer out a comprehensive draft law that these bodies say covers all 25 FATF anti-money laundering criteria.
One leading banker familiar with the issue told the daily that only 10 of these criteria were being enforced.
Prime Minister Rafiq Hariri and Central Bank Governor, Riad Salameh, said that the draft would hopefully be passed by Parliament and put into practice before May, according to the paper.
The G7 countries founded the FATF in 1989 in Paris. It draws its members mostly from the Paris-based Organization for Economic Cooperation and Development (OECD) – Albawaba.com
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