Secrecy Jurisdictions

In 1990 the Financial Action Task Force issued 40 Recommendations intended to provide a complete set of counter-measures against money laundering covering the criminal justice system and law enforcement, the financial system and its regulation, and international co-operation. These have been regularly updated, most recently in 2003. Though not a binding international convention, many countries in the world have made a political commitment to combat money laundering by implementing the 40 Recommendations. Between 2001 and 2004 further recommendations were added to tackle terrorist financing, making 49 in all. See http://www.fatf-gafi.org/document/28/0,3343,en_32250379_32236930_33658140_1_1_1_1,00.html for more details.

Financial Action Task Force: The Financial Action Task Force (FATF) is an inter-governmental body whose purpose is the development and promotion of national and international policies to combat money laundering and terrorist financing. The FATF has published 40 + 9 Recommendations in order to meet this objective.

The term now commonly used for accounting standards.

A collective term to cover a wide range of activities that relate to the management of money and other investments. The companies represented might include banks, loan and mortgage companies, mutual savings and deposit companies, credit card companies, insurance companies, pension companies, stock exchanges and all the brokerage related to them, plus support services such as accountants, lawyers, actuaries and more.^

Ratio of the output of value of the services supplied by the financial services industry in a jurisdiction to the Gross Domestic product of that place.

See accounts.

Financial Intelligence Unit: Financial intelligence units (FIUs) are government agencies responsible for countering money laundering and terrorism financing. See also Egmont Group.

The flag of a country with easy or lax maritime regulations and low fees and taxes, flown by ships registered in such countries, even though they have no substantial connection with the country.

A tax system in which as income increases above an agreed tax free sum the amount of tax paid remains constant in proportion to total income. Also known as proportionate taxation. Compare with progressive taxes.

A flee clause is a provision included in a tax haven / secrecy jurisdiction trust deeds requiring that the management and administration of a trust be changed to a different jurisdiction if a disadvantageous event occurs such as the breakdown of law and order in the place in which the trust is administered of the imposition of taxation on the trust.

Foundations are distinct legal entities, and therefore to some degree equivalent to companies or corporations, except that they are almost invariably set up for charitable purposes or for the administration of the assets of a family or other social grouping.In many states they fulfil a role that charitable trusts play in jurisdictions with Anglo Saxon law.Foundations are subject to considerable variation in legal structure, but are usually characterised by owning property in their own right despite having no persons who claim ownership rights over the assets of the foundations. Foundations are usually managed by a board.In some jurisdictions, such as Austria, foundations are reasonably transparent and must file data on public record. In others, such as Panama and Liechtenstein they are extremely secretive.The appeal of foundations is growing as trustees seek to limit their liability to settlors, beneficiaries and others and as such foundation laws are becoming more commonplace in Anglo Saxon legal systems.

The process by which a person suspected of money laundering may have their assets seized temporarily by the state(s) investigating their affairs to ensure that if the case against them is proven those funds con be either claimed by that state or be returned to those to whom the rightfully belong. See also tracing of assets and seizing of assets.

Financial Sector Assessment Program: The FSAP is a joint IMF and World Bank effort introduced in May 1999 and aims to increase the effectiveness of efforts to promote the soundness of financial systems in member countries. Its work programs seek to identify the strengths and vulnerabilities of a country's financial system; to determine how key sources of risk are being managed; to ascertain the financial sector's developmental and technical assistance needs; and to help prioritize policy responses. The results are published in Reports on Observance of Standards and Codes (ROSCs). The FSAP also forms the basis of Financial System Stability Assessments (FSSAs), in which IMF staff address issues of relevance to IMF surveillance, including risks to macroeconomic stability stemming from the financial sector and the capacity of the sector to absorb macroeconomic shocks.

Financial Stability Forum FSF Financial Stability Board FSB: The Financial Stability Forum (FSF) brings together senior representatives of national financial authorities (e.g. central banks, supervisory authorities and treasury departments), international financial institutions, international regulatory and supervisory groupings, committees of central bank experts and the European Central Bank. The FSF is serviced by a small secretariat housed at the Bank for International Settlements in Basel, Switzerland. The FSF was first convened in April 1999, at the initiative of G7 Finance Ministers and Central Bank Governors, in order to promote international financial stability, improve the functioning of financial markets and reduce the tendency for financial shocks to propagate from country to country, thus destabilizing the world economy. The FSF's mandate is: - to assess vulnerabilities affecting the international financial system; - to identify and oversee action needed to address these; and - to improve co-ordination and information exchange among the various authorities responsible for financial stability.Although the financial crisis which began in 2007 provided clear indication that the FSF had neither achieved its goals nor given warning of an impending crisis, the G20 London Summit in April 2009 re-established the FSF as the Financial Stability Board (FSB), with a broadened mandate to promote financial stability.