Financial Crime World

FinCEN Announces FATF’s Updated List of High-Risk Jurisdictions for Money Laundering, Terrorist Financing, and Weapons of Mass Destruction Proliferation

The Financial Crimes Enforcement Network (FinCEN) recently announced that the Financial Action Task Force (FATF) has 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. Here’s a breakdown of the updated list:

FATF’s Classification of Jurisdictions

FATF identified the following categories of jurisdictions:

  1. Jurisdictions under increased monitoring: These countries have strategic deficiencies in their AML/CFT/CPF regimes but are actively working to address the issues.
  2. Jurisdictions under a call for action: These countries are considered high-risk due to their continued non-compliance with FATF’s standards.

Jurisdictions under Increased Monitoring

FATF added the following countries to its list of jurisdictions under increased monitoring:

  • Cameroon
  • Croatia
  • Vietnam

FATF’s statement advises other jurisdictions to apply enhanced due diligence proportional to their risk levels when dealing with these countries.

Jurisdictions under Call for Action

FATF kept the following countries on its list of jurisdictions under a call for action:

  • Democratic People’s Republic of Korea (North Korea)
  • Iran

Compliance Obligations for Financial Institutions

Financial institutions must strictly comply with extensive U.S. restrictions and prohibitions against any correspondent account relationships with North Korean or Iranian financial institutions. These restrictions are already enforced by existing sanctions and FinCEN regulations.

Money Service Businesses’ Compliance Obligations

Money service businesses dealing with foreign relationships are reminded to adhere to FinCEN’s guidance on compliance obligations and take adequate measures against money laundering and terrorism financing risks.

The Importance of FATF’s Call for Action

FATF’s call for action against high-risk jurisdictions serves as a warning to the international financial system about potential risks emanating from these countries. It underscores the importance of continued vigilance and robust AML/CFT/CPF frameworks to safeguard against financial crimes.