The Financial Action Task Force (“FATF”), the global standard-setting body for anti-money laundering and combating the financing of terrorism (“AML/CFT”), published the following documents on 21 June 2019:
(1) Public Statement in respect of Democratic People’s Republic of Korea (“DPRK”) and Iran
The FATF remains concerned by the DPRK’s failure to address the significant deficiencies in its AML/CFT regime and the serious threat they pose to the integrity of the international financial system. Further, the FATF has serious concerns with the threat posed by the DPRK’s illicit activities related to the proliferation of weapons of mass destruction (“WMDs”) and its financing.
The FATF reaffirms its 25 February 2011 call on its members and urges all jurisdictions, which we hereby do, to advise you to give special attention to business relationships and transactions with the DPRK, including DPRK companies, Financial Institutions (FIs) and those acting on their behalves. Please refer to the Public Statement for more details.
While acknowledging the progress that Iran made including the passage of the Anti-Money Laundering Act, the FATF expresses its disappointment that the Action Plan of Iran remains outstanding and expects Iran to fully address the outstanding items including, among others, (i) adequately criminalising terrorist financing; (ii) identifying and freezing terrorist assets; (iii) ensuring an adequate and enforceable customer due diligence regime; and (iv) ensuring that FIs verify that wire transfers contain complete originator and beneficiary information.
The FATF continues to call on its members and urges all jurisdictions, which we hereby do, to advise you to apply enhanced due diligence measures, including obtaining information on the reasons for intended transactions, business relationships and transactions with natural and legal persons from Iran; conducting enhanced monitoring of business relationships, by increasing the number and timing of controls applied, and selecting patterns of transactions that need further examination. Please refer to the Public Statement for more details.
As part of its ongoing review of compliance with the AML/CFT standards, FATF identified 12 jurisdictions (The Bahamas, Botswana, Cambodia, Ethiopia, Ghana, Pakistan, Panama, Sri Lanka, Syria, Trinidad and Tobago, Tunisia and Yemen) with strategic AML/CFT deficiencies.
The FATF encourages members to consider the information presented in the 21 June 2019 issue of “Improving Global AML/CFT Compliance: On-going Process” which sets out the high-level political commitment provided by each of the jurisdictions in question to address the identified deficiencies, including to (i) ensure the timely access to adequate, accurate and current basic and beneficial ownership information; (ii) ensure the implementation without delay of targeted financial sanctions measures related to terrorist financing and proliferation financing; (iii) establish procedures to identify and freeze terrorist assets; and (iv) improve customer due diligence and suspicious transaction reporting requirements, etc.