04.03.2002
     Foreign Ministers meeting in Queensland to discuss the special needs of the 32 tiny states that make up more than half of the Commonwealth confirmed that, with the exception of Nauru, they will have a period of grace before international sanctions are imposed.
     
     Nauru remains beyond the pale after failing to effectively begin moves to tighten controls on 400 banks that have reportedly laundered as much as US$70 billion for Russian organised crime.
     
     Other small states have been allowed more time after Commonwealth intervention and the introduction of new laws that will progressively bring them into line with action demanded by the Organisation for Economic Co-operation and Development.
     
     The OECD had set February 28 as the deadline for the start of a name and shame campaign.
     
     But Commonwealth Deputy Secretary-General Winston Cox said in Coolum that the deadline had been extended for most Pacific and Caribbean states after lobbying by OECD members New Zealand, Britain, Canada and Australia.
     
     There was a very clear statement at the meeting that small states and the OECD - and, indeed, the entire financial community - were firmly agreed on anti-money laundering, he said.
     
     Nobody wanted their financial system to be used to launder the profits of transnational crime or to be used as a means of financing terrorism.
     
     International efforts to crack down on money laundering are being co-ordinated through the OECD-related Financial Action Task Force.
     
     Its blacklist includes seven states that are members of, or associated with, the Commonwealth - Cook Islands, Nauru and Niue in the Pacific, Grenada, St Kitts and Nevis and St Vincent and the Grenadines in the Caribbean, and Nigeria in Africa.
     
     A separate list of 35 countries operating tax havens - officially termed harmful tax practices - names 20 Commonwealth or Commonwealth-related jurisdictions.
     
     This includes Cook Islands, Nauru, Tonga and Vanuatu in the Pacific, the Indian Ocean islands of Maldives and Seychelles, islands in the Caribbean and the English Channel, the Isle of Man off Britain, and Gibraltar.
     
     Tax havens have been targeted because they siphon money and financial flows - including savings and investments - away from other nations and allow companies and the wealthy to escape tax in their home countries.
     
     Foreign Minister Phil Goff said sanctions against tiny Commonwealth nations working to clamp down on money laundering and tighten tax laws were likely to be suspended until mid-2003.
     
     He said small states needed time and help to pass new laws and set up financial intelligence units.
     
     Only one Pacific country - Nauru - was still regarded as not having taken adequate steps towards the goal of preventing money laundering.
     
     In regard to harmful tax initiatives, more work needed to be done in perhaps six Pacific states.