FATF Takes Cuba Off Its AML/CFT List! Wait, What?

Nov 1, 2014 by

Dear Friends:

Unless you cyber-troll the FATF website, you probably missed this item.

Last Friday, FATF congratulated Cuba for taking such strong actions to police its financial system that Cuba will no longer be monitored for its compliance with anti-money-laundering and anti-terrorist finance rules.

Be patient. Don’t flip to the “Recommended Reading” section just yet. This is about Cuba’s false and unfair listing by the U.S. State Department as a state sponsor of terror.

FATF is actually a thing, not just a bad acronym: The Financial Action Task Force. It was created in 1989 at meeting of the G-7 nations to combat money-laundering and, after September 11, 2001, its mandate expanded to cover terrorist financing.

Countries that fail to embrace and enforce its rules suffer consequences. As the Wall Street Journal reports, it is “difficult for those nations to transact with the banking systems” of countries throughout the world, costing them billions.

If countries out of step with FATF are also subject to U.S. sanctions (e.g. the U.S. State Department’s list of terrorism-sponsoring states), their problems multiply. As a practical matter, they are locked out of the global financing sector, which could deny them “billions of dollars in potential investment,” according to one analysis.

Cuba knows this well.

Cuba was added to the list of State Sponsors of Terrorism in 1982, when the Reagan administration decided to play politics with counter-terrorism, a dangerous game taken up by every White House since. Listen to Dick Clarke, a career civil servant who advised three U.S. presidents on counter-terrorism policy, explain why Cuba stayed on the list in the 1990s; it wasn’t because Cuba supported terrorism, but rather it was for purely domestic political reasons.

Because no administration has been as candid as Mr. Clarke, they have kept Cuba on the list, but shifted their rationales for doing so as circumstances warranted.

At the start, the U.S. government accused Cuba of supporting insurgencies in Africa and Latin America. While Cuba’s activist foreign policy once involved supporting armed insurrection abroad, Cuba has long since ended these practices, as the Congressional Research Service (CRS) explains.

In 2004, the Bush administration called out Cuba for publicly opposing Washington’s “War on Terror,” not for supporting terror but for voicing criticism of U.S. policies. This was a flimsy charge, but it took the State Department a few years to drop it.

As recently as 2011, the State Department has used Cuba’s failure to meet FATF standards to justify its presence on the terror list: “Despite sustained and consistent overtures, Cuba has refused to substantively engage directly with the FATF. It has not committed to FATF standards and it is not a member of a FATF-style regional body.” Then, things changed.

Just a year later, State reported that “Cuba became a member of the Financial Action Task Force of South America against Money Laundering, a FATF-style regional body. With this action, Cuba has committed to adopting and implementing the FATF Recommendations.”

By the time the Department issued its 2013 report, all references to Cuba’s compliance with FATF’s standards had vanished completely.

So, remind us again, why is Cuba still on the terror list?

Even the State Department seemed confused when it released this year’s terror report which said, “there was no indication that the Cuban government provided weapons or paramilitary training to terrorist groups.”

In another sentence, State reported “Cuba has long provided safe haven to members of Basque Fatherland and Liberty (ETA) and the Revolutionary Armed Forces of Colombia (FARC).” But, in the very next line, State said, “Reports continued to indicate that Cuba’s ties to ETA have become more distant.”

We also know that Spain’s government told former President Carter that “ETA members are there at the request of the Spanish government,” and that Colombia, a close U.S. ally, is relying on Cuba as a host and facilitator for its peace talks with the FARC to help end their civil war.

This leaves only one allegation: “The Cuban government continued to harbor fugitives wanted in the United States.”

Here, the report refers to Joanne Chesimard, convicted in the U.S. for her role in the murder of a New Jersey state policeman, and to other so-called “militant groups” active in the U.S. decades ago. But, Cuba’s decision to allow them to live on the island is not an act tantamount to supporting terrorism.

Terrorism is a terrible thing. In 2013, the data show there were over 9,700 terror attacks worldwide that caused more than 17,800 deaths and 32,500 injuries. But not one casualty, not one act of violence was connected to Cuba.

So, if Cuba has zero connections to terrorism, why is it that when a reporter asked Marie Harf, the Spokesperson for State, “How much longer are you going to keep Cuba on the list of state sponsors of terrorism?” she replied by saying, “Well, it’s a good question that I know comes up a lot. The State Department has no current plans to remove Cuba from the State Sponsors of Terrorism list”?

Of course, she could have offered a more candid answer. There’s just one thing holding up Cuba’s removal from the State Department’s State Sponsors of Terrorism list, and it isn’t radical fugitives from the 1970s or 80s who found safe haven in Cuba.

It’s politics – and that’s a FATF, er, a fact.

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