Financial Crime World

FINANCIAL INSTITUTIONS URGED TO BOOST DUE DILIGENCE ON JURISDICTIONS WITH MONEY LAUNDERING CONCERNS

Washington D.C. - Financial Crimes Enforcement Network Issues Guidance to Combat Money Laundering and Terrorist Financing

The Financial Crimes Enforcement Network (FinCEN) has issued guidance to financial institutions in the United States, urging them to take additional measures to combat money laundering and terrorist financing in jurisdictions with significant anti-money laundering/counter-terrorism financing (AML/CFT) deficiencies.

Jurisdictions with AML/CFT Deficiencies Identified

The FinCEN advisory highlights nine countries that have been identified by the Financial Action Task Force (FATF) as having strategic AML/CFT deficiencies:

  • Afghanistan
  • Bosnia and Herzegovina
  • Guyana
  • Iraq
  • Lao PDR
  • Syria
  • Uganda
  • Vanuatu
  • Yemen

These countries are at high risk of being used for illicit activities, such as money laundering and terrorist financing.

Enhanced Due Diligence Obligations

Financial institutions in the United States are reminded of their obligations to conduct enhanced due diligence on correspondent accounts established or maintained for foreign banks whose shares are not publicly traded. This includes:

  • Determining the identity of each owner of the foreign bank
  • The nature and extent of each owner’s ownership interest

Mitigating AML/CFT Risks

Financial institutions should consider the AML/CFT risks associated with these jurisdictions and take steps to mitigate those risks, including:

  • Implementing enhanced policies, procedures, and controls to detect and report suspicious activity related to these countries
  • Enhancing customer due diligence and monitoring of transactions involving these countries

Countries Recently Removed from FATF’s Listing

Two countries, Myanmar (Burma) and Papua New Guinea, have been recently removed from the FATF’s listing of high-risk jurisdictions. Financial institutions should take into account the FATF’s decisions and reasons behind the delisting when assessing risk.

Filing Suspicious Activity Reports

If a financial institution has knowledge, suspicion, or reason to suspect that a transaction involves funds derived from illegal activity or that a customer is engaging in terrorist financing, it must file a suspicious activity report with FinCEN.

Accessing the Full Text of the FinCEN Advisory

The full text of the FinCEN advisory can be found on the agency’s website.