Statement
Mr. Chair,
I have the honour to deliver this statement on behalf of the Alliance of Small Island States.
AOSIS strongly supports efforts to strengthen global coordination on policy and norm-setting for the exchange of information and data. For SIDS, transparency is a practical necessity to protect limited fiscal space, safeguard financial integrity, and ensure that globalization works fairly for all.
But we must also speak honestly about the unintended consequences of how global financial and transparency standards are currently designed and implemented. For many SIDS, these frameworks – while well-intended – have contributed not to inclusion, but to exclusion from the international financial system.
Over the past decade, the cumulative effects of FATF standards, AML/CFT requirements, and blacklisting by certain jurisdictions has resulted in widespread de-risking. For many SIDS, the consequences have been severe and immediate. FATF-related risk perceptions have led to the withdrawal of correspondent banking relationships and payment channels restricted, even in cases where jurisdictions are assessed as largely compliant.
According to the World Bank, over 75 percent of Caribbean banks experience a loss of correspondent banking relationships. Since 2011, the Pacific has seen a 60 per cent drop in CBRs – double the world average.
This is not a technical inconvenience. Such structural bias against small markets rather than evidence-based risk, directly undermines our trade, remittances, humanitarian transfers and disaster response.
We also see similar gaps and asymmetries persist in access to beneficial ownership information, financial account data, and exchange of information. Many SIDS lack real-time access to the very data they are required to collect and transmit. Financial account data often flows outward, but not back.
And so, a paradox emerges.
SIDS are required to meet the highest of global standards but are simultaneously denied full access to the financial system for failing to meet standards designed without their realities in mind.
As such, our economies are “frozen out” on the margins of the international financial system, undermining development and trust in multilateralism.
Therefore, AOSIS calls for a recalibration of global coordination on data exchange and norm- setting, where fairness and accessibility are explicit objectives. We welcome that the FATF has acknowledged that one-size-fits-all implementation can strain jurisdictions and lead to unintended consequences and exclusion.
But how do we operationalize this recognition?
To participate fully in global data-sharing arrangements, SIDS require targeted and sustained support and capacity-building, investments in digital infrastructure; and technical assistance tailored to small administrations with limited human and financial resources. Data standards must be interoperable, proportionate, and responsive to the realities of SIDS, rather than imposing one- size-fits-all obligations.
There must also be guaranteed pathways for dialogue, technical support and greater transparency and clarity in rules and decision-making processes.
In closing, AOSIS believes that transparency should be a bridge into the international financial system, not a barrier that locks countries out.
As global discussions advance, we urge partners to ensure that no small island developing state is left financially isolated by the very standards meant to promote integrity and cooperation.
I thank you.
