HM Treasury issues statement on money laundering controls in overseas jurisdictions
On 10 November 2009, HM Treasury issued (www.hm-treasury.gov.uk/press_103_09.htm) a statement of advice about risks posed by unsatisfactory money laundering controls in the following jurisdictions: Iran, Pakistan, Uzbekistan, Turkmenistan, Sao Tome and Principe, and Azerbaijan (Statement). The advice has immediate effect.
The Statement follows the Financial Action Task Force’s (FATF) issue, on 16 October 2009, of a further statement drawing attention to deficiencies in several jurisdictions of concern. The UK fully supports the work of the FATF on these matters and HM Treasury agrees with the FATF assessments.
The Statement also draws attention to, and supports, the public statements of MONEYVAL (a FATF style regional body under the auspices of the Council of Europe) in respect of Azerbaijan.
In summary, the Statement calls on all UK financial institutions regulated for money laundering purposes to pay attention to the latest FATF and MONEYVAL statements in relation to these jurisdictions, to take this advice into account in respect of their systems and controls to counter financial crime, and to take appropriate actions to minimise the associated risks.
Specifically in relation to Iran, the Statement requires UK businesses regulated under the Money Laundering Regulations 2007, whether financial institutions or other regulated persons, to treat transactions associated with Iran as situations that, by their nature, can present a higher risk of money laundering or terrorist financing, and which therefore require increased scrutiny, enhanced due diligence, and ongoing monitoring, particularly where correspondent relationships are involved, which have been highlighted as a particular risk. It also requires all persons authorised by the FSA to take this advice into account in respect of their systems and controls to counter financial crime, and take appropriate actions to minimise the associated risks. Further to the call for countermeasures by the FATF, on 12 October 2009, HM Treasury issued a direction under the Counter Terrorism Act to the UK financial sector to cease all business relationships and transactions with two Iranian companies (Iranian Bank Mellat and the Islamic Republic of Iran Shipping Lines)