To: Financial Institutions
From: Director of the ONDCP
Dated: 24 April 2020
on Jurisdictions identified with AML/CFT Deficiencies
TAKE NOTICE, this ADVISORY is issued pursuant to Regulation 6(1a) of the Money Laundering (Prevention) Regulations 2007, and sets out actions to be implemented and countermeasures to be taken relating to foreign jurisdictions with AML/CFT weaknesses that do not or insufficiently apply AML/CFT international standards.
FINANCIAL INSTITUTIONS are required to PAY ATTENTION to the following:
A. The “FATF Public Statement” dated 21 February 2020 relating to:
I. High Risk Jurisdictions subject to a FATF Call for Action.
High-risk jurisdictions have significant strategic deficiencies in their regimes to counter money laundering, terrorist financing, and financing of proliferation relating to WMD. The FATF in relation to such jurisdictions urges all countries to apply enhanced due diligence, and in the most serious cases, countries are called upon to apply counter-measures.
Purpose: the requirement for enhanced due diligence and call for countermeasures is to protect the international financial system from the ongoing money laundering, terrorist financing, and proliferation financing (ML/TF/PF) risks emanating from the high risk jurisdictions.
Jurisdictions in this category as identified by the FATF are the following:
- DEMOCRATIC PEOPLE’S REPUBLIC OF KOREA (DPRK)
DPRK has failed to address the significant deficiencies in its AML /CFT regime and the serious threats they pose to the integrity of international financial system.
DPRK has been urged by the FATF to immediately and meaningfully address its AML/CFT deficiencies.
DPRK has raised serious FATF concerns regarding the threat posed with respect to its illicit activities related to proliferation of weapons of mass destruction (WMD) and its financing.
Enhanced due diligence: Finanical institutions are required to give special attention to business relations and transactions with the DPRK. This includes DPRK companies, financial institutions and those acting on their behalf.
Financial institutions should also be alert to the possibility of transactions relating to vessels and shipping that may involve DPRK, which are a major means of circumventing sanctions. Financial institutions should be alert to transactions relating to purchasing, insuring, providing crewing services to such vessels or in relation to vessels carrying products from or to the DPRK. It should be ascertained if any vessel, including Antigua and Barbudan registered vessels, are or may be concerned with such transactions.
Enhanced due diligence in relation to DPRK entities should include application of stringent client identification procedures; application of stringent benefiical owner identification before business relationship is established; enhanced systematic reporting of financial transactions; limiting business relations or financial transactions with DPRK entities; no reliance on third parties located or based in DPRK concerned with conducting elements of the CDD process;
Financial institutions should have a clear understanding of the purpose of any transactions involving such entities and be satisfied to a very high degree after enhanced scrutiny of their legitimacy.
Countermeasures: FATF has fully lifted the suspension of countermeasures against Iran.
Given Iran’s failure to enact the Palermo and Terrorist Financing Conventions in line with FATF standards, the FATF has fully lifted the suspension of counter measures and urges all countries to apply effective counter measures.
Iran will remain on the FATF list of High Risk Jurisdictions subject to a call for action until the full Action Plan has been completed.
Until Iran implements the measures required to address its AML/CFT deficiencies, the FATF will remain concerned with the terrorist financing risk emanating from Iran and the threat this poses to the international financial system.
Enhanced due diligence: Financial institutions are required to continue to apply enhanced due diligence with respect to business relationships and transactions with natural and legal persons from Iran, including (1) obtaining information on the reasons for intended transactions, and (2) conducting enhanced monitoring of business relationships, by increasing the number and timing of controls applied, and selecting patterns of transactions that need further examination.
II. Changes to the list
Supervisory Authority guidance regarding jurisdictions listed in section A above — It is an offence in Antigua and Barbuda to engage in financial transactions related to the proliferation of WMD. Where a financial institution is unable to satisfy itself that a transaction is not related to proliferation of WMD then the transaction should not be carried out. Financial institutions should review the Appendix to the MLFT Guidelines titled “Indicators of Possible Proliferation Financing”, issued by the Supervisory Authority on 12 December 2017.
- The FATF Statement on Jurisditions under Increased Monitoring dated 21 February 2020:
Purpose: To identify to financial institutions jurisdictions with strategic AML/CFT deficiencies which have commited to resolve swiftly the identified strategic deficiencies within agreed timeframes and are subject to increased monitoring.
The FATF and FSRBs continue to work with the jurisdictions noted below and to report on the progress made in addressing the identified strategic deficiencies.
The FATF does not call for enhanced due diligence to be applied to these jurisdictions, but encourages its members to take into account the information presented in their risk analysis contained in the FATF Statement of 21 February 2020.
- Jurisdictions with AML/CFT strategic deficiencies (see details of risk analysis in the FATF Statement in the Annex) –
- The Bahamas
- Jurisdictions no longer subject to monitoring by the FATF
Jurisdictions no longer subject to the FATF’s on-going global AML/CFT compliance process:
- Trinidad and Tobago
Lt. Col. Edward Croft
Click here for the official advisory.
Amended by section 7(6) of the Money Laundering (Prevention) (Amendment) Regulations 2009
 AML/CFT: anti-money laundering/counter terrorist financing
Reg. “6(1a) (1) [A financial institution] must pay special attention to business relationships and transactions with persons from or in countries which [the financial institution] knows or has reason to believe insufficiently apply international standards against money laundering or the financing of terrorism.
(2) If the Supervisory Authority notifies [a financial institution] that a country has weaknesses in its AML/CFT systems, then [the financial institution] must pay special attention to business relationships and transactions from or in that country.
(1b) Where transactions have no apparent economic or visible lawful purpose, [the financial institution] should examine as far as possible the background and purpose of such transactions, and written findings should be kept as a financial transaction document.
(1c) [A financial institution] should adhere to any countermeasures that the Supervisory Authority or the regulator advises should be implemented.”
See copy of the Public Statement in the Annex.
Section 12B of the Prevention of Terrorism Act 2005 [amended by section 10 of the Prevention of Terrorism Act 2017] makes it an offence to be involved in or to financce the development of weapons of mass destruction.
 WMD: weapons of mass destruction
 See copy of statement on jurisdictions under increased monitoring in the Annex.
 FATF-style regional bodies