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hard power thr ough related sanctioning mechanisms. As such, the higher reputa-
tional and financial costs of the FATF blac klist in many ways superseded its com-
parable legitimacy problems, and ultimately made it more effective than the OECD
blacklist.
According to Mahon and McBride (2009), the OECD lacks coercive instruments
and its effectiveness as an institution of global governance rests on its abili ty to
promote polic y transfer and conformity with OECD norms thro ugh peer review
and other reputation-based compliance strategies. However, a few of the OECD’s
instr um ents can be said to be ‘hard law’ such as the Codes of Liberalisation of
Capita l Movements which obliges member states to remove barriers to the move-
ment of capital. Yet there is no form al sanctioning mechanism for breaches of
OECD standards and sometimes no mechanism for determining whe ther a state
has breached them at all (em ail Angel Gurría, August 2017 ). Clifton and Díaz-
Fuentes (2011) argue that policy m akers and sc holars alike have acclaimed its pi-
oneering as well as successful implementation of these ‘soft governance’ tools (Pa-
gani 2002 ), and for its epistemic influences on polic y makers (Carroll and Kellow
2011). The OECD’s power rests on its reputation for technical expertise, its trans-
governmental structure and linkages to member and non-member states. However,
a growing recognition of the role IOs play in knowledge dissemination has been
accompanied by an appreciation of the limits of ‘soft law’ and how this might
p roduce policy transfer failures (Woodward 2006). In fact, FATCA was directly
linked to market access because of the OECD ’s difficulties in gaining state com-
pliance through soft approaches (Eccleston and Gray 2014; Hakelberg 2015).
Paper three also revisits the extraterritoriality of US le gisla tion and how it force d
Nauru to comply with the OECD’s and FATF’s initia tives. I highlight how the
FATF ‘piggybacked’ on US law enforcement authorities’ capacity to re-embed
interna tional finance by extending the boundaries of their jurisdict ion extra territo -
rially to infringe on other states’ sovereignty. Although the FATF also makes soft soft
