FATF Urges Greater Action Against Money Laundering and Terrorist Financing: Risks Posed by DPRK and Iran
Paris, 23 February 2018
At its recent meeting, the Financial Action Task Force (FATF) reaffirmed its concerns over the Democratic People’s Republic of Korea (DPRK) and Iran’s failure to address significant deficiencies in their anti-money laundering and combatting the financing of terrorism (AML/CFT) regimes. The following are the specific concerns raised by FATF toward each country:
Democratic People’s Republic of Korea (DPRK)
The FATF has called on jurisdictions to apply protective measures against the ongoing and substantial ML/FT threats emanating from the DPRK.
Illicit Activities
FATF expressed serious concerns regarding the DPRK’s illicit activities, including those related to the proliferation of weapons of mass destruction (WMDs). The following steps are necessary to mitigate these risks:
- Closing DPRK branches, subsidiaries, and representative offices, as well as terminating correspondent relationships with DPRK banks
- Increasing international scrutiny and implementing targeted financial sanctions
Iran
In June 2016, Iran displayed political commitment to address its strategic AML/CFT deficiencies by seeking technical assistance in implementing the Action Plan.
Expired Action Plan
The FATF suspended counter-measures after Iran’s political commitment and subsequent steps, such as establishing a cash declaration regime and drafting AML and CFT law amendments. However, the action plan has recently expired, and several items remained incomplete:
Outstanding Action Items
Iran is expected to urgently address the following outstanding action items:
- Adequately criminalize terrorist financing
- Enforce customer due diligence procedures
- Improve financial regulations
- Ratify and implement international conventions
- Clarify its ability to provide mutual legal assistance
- Implement more stringent penalties for ML offenses
Recommendation for Jurisdictions
The FATF calls on its members and all jurisdictions to maintain heightened due diligence when dealing with Iranian natural and legal persons, as required by FATF Recommendation 19. The FATF urges vigilance to prevent potential financial risks emanating from these countries.