The Financial Action Task Force on Money Laundering (FATF) updated its list of jurisdictions with strategic AML/CFT deficiencies on February 23, 2018.
In order to protect the international financial system from ML/CFT risks and to promote better compliance of national regimes with international AML/CFT standards, the FATF has identified a list of jurisdictions that have strategic deficiencies in AML/CFT systems. The FATF is working with them to address those deficiencies that pose a threat to the international financial system.
These jurisdictions are listed in two official FATF documents:
1. FATF Public Statement (black list), which includes jurisdictions in respect of which the FATF encourages member-states and other jurisdictions to apply countermeasures to protect the international financial system against the continuing significant money laundering and terrorist financing (ML/CFT) risks arising from these jurisdictions; and
2. Improving Global AML/CFT Compliance: On-going Process
(grey list), which includes jurisdictions with strategic AML/CFT deficiencies, for which action plans have been developed with the FATF.
1. FATF Public Statement
1.1. The Democratic People's Republic of Korea (DPRK)
The FATF confirms its call as of February 25, 2011 and strongly urges all jurisdictions to recommend to their financial institutions paying special attention to business relations and operations with the DPRK, including the DPRK companies, financial institutions and organizations acting on their behalf. In addition to the enhanced impact measures, the FATF again calls upon member-states to apply effective countermeasures, as well as targeted financial sanctions in accordance with the resolutions of the United Nations Security Council in order to protect their financial sectors from the risks of money laundering, terrorism financing and proliferation of weapons of mass destruction (ML/CFT/WMD), coming from the DPRK. Jurisdictions should take the necessary measures to close existing branches, subsidiaries and representative offices of the DPRK banks within their territories and cease correspondent relations with the DPRK banks, if this is stipulated in the relevant resolutions of the UN Security Council.
In June 2016, the FATF approved Iran's devotion to high-level political commitments to address strategic AML/CFT deficiencies and its decision to seek technical assistance for the Action Plan implementation. Considering the fact that Iran provided political commitment and took corresponding steps, in November 2017, the FATF resolved to continue the suspension of countermeasures.
Since November 2017, Iran has established a regime for declaring cash and submitted draft amendments to its AML/CFT laws. However, the Iranian Action Plan has expired and most of the paragraphs in the Plan have remained unfinished. Iran should fully consider its remaining paragraphs in the Action Plan, including by: (1) adequate criminalization of terrorism financing, including by excluding the privilege for certain groups of "trying to stop foreign occupation, colonialism and racism"; (2) identification and freezing of terrorist assets in accordance with the resolutions of the UN Security Council; (3) ensuring adequate and compulsory compliance with the adequate verification regime; (4) ensuring the full independence of the Finance Intelligence Unit and the requirement to report suspicious transactions on transactions conducted; (5) demonstrating how authorities identify and authorize unlicensed money/value transfer service providers; (6) ratification and implementation of the Palermo and FT Conventions, and explaining the possibilities for mutual legal assistance; (7) ensuring that financial institutions verify that bank transfers contain full information about the sender and the beneficiary; (8) establishing a wider range of penalties for violations of the ML offense; and (9) ensuring adequate legislation and procedures to ensure the confiscation of property of appropriate value.
Considering the fact that Iran has draft laws that are currently under the Parliament's consideration, the FATF has resolved to continue the suspension of countermeasures. Depending on Iran's progress in implementing its Action Plan, the FATF will take further steps in June 2018. The FATF expects that Iran will urgently move forward on the path of reform on all the remaining paragraphs in its Action Plan by completing and implementing the necessary AML/CFT reforms, in particular the adoption of the necessary laws.
Iran will remain in the FATF Public Statement until the completion of the full Action Plan. As long as Iran does not implement the measures necessary to address the deficiencies identified in the Action Plan, the FATF will continue to worry about the risk of terrorist financing coming from Iran and the threat it poses to the international financial system. In this regard, the FATF encourages its member-states and all jurisdictions to continue to advise their financial institutions to apply enhanced adequate verification of business relations and transactions with individuals and legal entities from Iran in accordance with FATF Recommendation 19.
2. Improving Global AML/CFT Compliance: On-going Process
The FATF has defined the following jurisdictions that have strategic deficiencies in national AML/CFT systems for which an Action Plan has been developed with the FATF. The situation of each jurisdiction is different, but a written high-level political devotion has been obtained from each country to address the identified deficiencies.
Financial institutions should take adequate measures to verify business relations with transactions with individuals and legal entities from these countries: Ethiopia, Iraq, Serbia, Syria, Sri Lanka, Trinidad and Tobago, Tunisia, Vanuatu, Yemen.
latest update 28.02.2018