Financial Institutions Urged to Enhance Anti-Money Laundering Efforts in High-Risk Jurisdictions

The Financial Crimes Enforcement Network (FinCEN) is reminding U.S. financial institutions of their obligations to adhere to anti-money laundering (AML) regulations, particularly with regards to high-risk jurisdictions identified by the Financial Action Task Force (FATF).

FATF Updates Jurisdiction List

In its latest report, the FATF added Bulgaria to its list of Jurisdictions Under Increased Monitoring and removed Albania, the Cayman Islands, Jordan, and Panama from that list. The FATF’s list of High-Risk Jurisdictions Subject to a Call for Action remains unchanged, with Iran and the Democratic People’s Republic of Korea (DPRK) still subject to countermeasures.

Enhanced Due Diligence Required

FinCEN is urging U.S. financial institutions to apply enhanced due diligence when maintaining correspondent accounts for foreign banks operating under a banking license issued by a country designated as non-cooperative with respect to international AML principles or procedures. Specifically, financial institutions must ensure that their due diligence programs include appropriate, specific, risk-based policies, procedures, and controls designed to detect and report known or suspected money laundering activity.

Key Takeaways

• U.S. financial institutions must enhance their due diligence efforts when dealing with high-risk jurisdictions.
• The FATF’s list of High-Risk Jurisdictions Subject to a Call for Action remains unchanged, with Iran and DPRK still subject to countermeasures.
• Financial institutions must ensure that their due diligence programs include appropriate policies, procedures, and controls designed to detect and report known or suspected money laundering activity.

Additional Resources

For more information on AML regulations and requirements, please refer to FinCEN’s guidance documents and the FATF’s website.