AUCKLAND The world richest nations have put Nauru, a tiny Pacific republic with 400 off-shore banks, on a special watch list and are threatening it, the Philippines and Russia with tough new money laundering sanctions by the end of September.

The deadline will hit just a week after Nauru, one of the worlds most secretive nations with just 10,000 people, hosts the 16-Nation Pacific Forum Summit and becomes the regions chair for the following year.

One of the sanctions will require global warnings that doing business with the three countries runs the risk of money laundering, which is a criminal offence in much of the rest of the world, AFP reported.

Nauru, a 21 square kilometers (8 square miles) nation just south of the equator, has been accused of being a key player in laundering $70 billion in Russian Mafia money. Its banks are all registered to one mail box in the village of Aiwo.

Three other Pacific tax havens on warning -- the Cooks, Marshalls and Niue -- seem to have escaped immediate sanctions but remain on a 17-nation list of noncooperative countries or territories (NCCT).

The list was compiled by the 29-nation Financial Action Task Force (FATF) headquartered in the Paris offices of the Organization of Economic Cooperation and Development (OECD) who at the weekend released the FATF report.

FATF had 15 NCCTs but has now removed the Bahamas, Cayman Islands, Liechtenstein and Panama and added Egypt, Guatemala, Hungary, Indonesia, Myanmar and Nigeria.

The OECD itself has set a July 31 deadline on seven Pacific nations, among 35 states, to impose tight new tax haven controls. This initiative is in trouble as the United States Treasury Secretary Paul O'Neill warned against interference in a state's internal affairs.

FATF said Nauru lacked a basic set of regulations against money laundering.

"It has licensed approximately 400 off-shore banks, which are prohibited from taking deposits from the public but are poorly supervised," FATF says.

"The excessive secrecy provisions guard against the disclosure of the relevant information on those off-shore banks and international companies."

FATF said in a statement they were recommending additional countermeasures against Nauru, the Philippines and Russia.

These measures include "the possibility of enhanced surveillance and reporting of financial transactions and other relevant actions" as of September 30. This will happen "unless their governments enact significant legislation which addresses identified money laundering concerns."

FATF countries will act by imposing "stringent requirements" that will identify individuals and companies using facilities in Nauru, the Philippines and Russia. It calls for enhanced reporting mechanisms "on the basis that financial transactions with such countries are more likely to be suspicious".