Financial Crime World

FinCEN Alerts US Financial Institutions to FATF’s Actions against High-Risk Jurisdictions

The Financial Crimes Enforcement Network (FinCEN) has issued a warning to U.S. financial institutions regarding the latest decisions of the Financial Action Task Force (FATF).

FATF’s October 2022 Plenary Meeting

At its plenary meeting in October 2022, the FATF updated its list of jurisdictions with strategic deficiencies in Anti-Money Laundering (AML), Countering the Financing of Terrorism (CFT), and Countering the Financing of Proliferation of Weapons of Mass Destruction (CPF) regimes.

Changes to FATF’s List of Jurisdictions

  • Nicaragua and Pakistan were removed from the list of Jurisdictions under Increased Monitoring (JUIM).
  • The Democratic Republic of Congo, Mozambique, and Tanzania were added to the list.
  • Burma was added to the list of High-Risk Jurisdictions Subject to a Call for Action.

Regulatory Compliance

FinCEN urges U.S. financial institutions to take the following steps:

Jurisdictions under Increased Monitoring (JUIM)

U.S. financial institutions must:

  • Ensure compliance with due diligence obligations for foreign financial institutions.
  • Apply appropriate risk management and mitigation strategies.

Money services businesses (MSBs):

  • Establish adequate and appropriate policies, procedures, and controls.
  • Implement enhanced due diligence when dealing with foreign agents or counterparties.

High-Risk Jurisdictions Subject to a Call for Action

Financial institutions are reminded:

  • Of the extensive restrictions and prohibitions against engaging with Burma and Iran/DPRK.
  • To consult FinCEN and OFAC guidance on financial transactions.

Reporting Suspicious Activity

U.S. financial institutions should:

  • Report any suspicions of illegal activity or money laundering to FinCEN by filing Suspicious Activity Reports.

Questions and Comments

Queries or comments regarding this release should be addressed to the FinCEN Regulatory Support Section at frc@fincen.gov.

Note: The information contained within this article is for general information purposes only. It does not constitute legal or financial advice, nor does it create an attorney-client relationship.