The country is small:
It’s less than 10 000 sq km in area, has fewer than 1 million people, and GDP less than about US$50 billion. It might have a coast. It’s a liberal democracy, or at least mostly a liberal democracy. It’s been independent for almost 100 years, attempts a strong neutrality, and is thus generally non-aligned.
I suppose the country’s currency is hard, or reasonably hard, enough that it can be freely exchanged.
In this country you can bring a gym bag with US$1 million (say 10 000 $100 bills) in or out of the country. There are banks there which you can deposit the money, and while they might be required to report this to the government, the government won’t tell the governments or other international organizations about it.
What would be the consequences for such in international relations?
Thank you.
Edit (probably over 20 minutes after posting):
However, I should have added, that this generally occurred between 1998 and 2004.
In the real world you could look at Nauru, which was a very low tax money laundering haven in the specified time frame. Though its a very small country with an interesting history.
The reaction of other states probably depends on how big of a problem that state is in the grand scheme of things. When the money laundering is too severe at some point international alliaces will impose sanctions, cutting of money tracks. For that to not destroy the countries economy, they would need powerful external friends. Probably some kind of world powers, that hold a protecting hand over them for geopolictical strategy.
Also: In such a place there would be people from all over the world, even the big world powers, doing shady bussiness. For the secret agencies of big countries such a money laundering haven can be a good opportunity to pipe money to some cronies. Think of the CIA financing groups of terrorists/militias to disturb a too socialist country, or even bringing its government to fall and be replaced by one doing the US favors (Osama bin Laden comes to mind).