15 Nov 2012

The Financial Action Task Force (FATF) released two important documents following its plenary meeting in October 2012 indicating jurisdictions with strategic deficiencies in their AML/CFT regimes.

1. FATF Public statement – 19 October 2012 – http://www.fatf-gafi.org/topics/high-riskandnon-cooperativejurisdictions/documents/fatfpublicstatement-19october2012.html

2. Improving Global AML/CFT compliance: ongoing process – 19 October 2012- http://www.fatf-gafi.org/topics/high-riskandnon-cooperativejurisdictions/documents/improvingglobalamlcftcomplianceon-goingprocess-19october2012.html

Certain jurisdictions have shown their commitment to seriously address the identified deficiencies. Others have made less progress, such as the jurisdictions listed by the FATF in the ‘public statement’. Some of these jurisdictions show serious deficiencies (Iran, Democratic People’s Republic of Korea (DPRK)). De Nederlandsche Bank (DNB) and the Ministry of Finance point out that counter-measures are needed when maintaining business relations with residents of these jurisdictions, or carrying out transactions to or from these jurisdictions.

The public statement furthermore lists jurisdictions that have not made sufficient progress or have not committed to an action plan developed with the FATF to address the deficiencies (Bolivia, Cuba, Ecuador, Ethiopia, Indonesia, Kenya, Myanmar, Nigeria, Pakistan, Sao Tomé en Principe, Sri Lanka, Syria, Tanzania, Thailand, Turkey*, Vietnam and Yemen). De Nederlandsche Bank (DNB) and the Ministry of Finance point out that maintaining business relations with residents of these jurisdictions, or carrying out transactions to or from these jurisdictions, poses a higher risk of money laundering or the financing of terrorism. Ghana has largely addressed the identified shortcomings and has therefore been removed to the ‘improving global AML/CFT compliance’ list. * Turkey has shown insufficient progress since June 2011. FATF has decided to suspend Turkey’s membership on 22 February 2013, unless the identified deficiencies are addressed before that date.

The document ‘improving global AML/CFT compliance’ contains a list of jurisdictions with significant deficiencies in their AML/CFT system but which are committed to addressing these deficiencies (Afghanistan, Albania, Algeria, Angola, Antigua and Barbuda, Argentina, Bangladesh, Brunei, Cambodia, Ghana, Kuwait, Kirgizia, Mongolia, Morocco, Namibia, Nepal, Nicaragua*, The Philippines, Soudan, Tadzhikistan, Venezuela and Zimbabwe*). *According to FATF, Nicaragua and Zimbabwe have shown insufficient progress in implementing their action plan. Trinidad & Tobago has shown significant progress and is therefore no longer subject to the FATF’s monitoring process under its on-going global AML/CFT compliance process.
Financial institutions are expected to consider the specific circumstances when deciding on the necessary AML/CFT measures. Additional guidance on this can be found in the Q&A ‘Warning-lists FATF’. http://www.toezicht.dnb.nl/en/3/51-223306.jsp
In the next Plenary meeting (February 2013) the FATF shall review the documents if it has cause to do so.